The government will announce an overhaul of planning rules this week to build more affordable homes as it tackles the economic and social legacy of 14 years of Conservative rule.
Deputy Prime Minister Angela Rayner will unveil a new National Planning Policy Framework to MPs on Tuesday before they leave for the summer break in a move that will strengthen requirements to build a much higher number of affordable homes in areas of need, starting this autumn.
Writing for Observer before the announcement, Rayner says government ministers have found a “frankly scandalous legacy” since they came in “under every stone we build”.
She says with so many people struggling to find a home or a roof over their head that “priority No. 1” is to “deliver social and affordable homes at scale”.
“We don’t have enough houses,” she writes. “In the death of the defeated Conservative government, they got out of control and made their housing failure worse. In the first three months of this year, work started on 41% fewer houses compared to the same period in 2023.”
Rayner’s move follows an announcement by the chancellor, Rachel Reeves, on Monday of the results of a Treasury audit into Labour’s spending legacy.
Preparing the public for tough choices ahead – on spending and taxation – Reeves is expected to reveal a higher-than-expected “black hole” of around £20bn between spending and receipts.
A government spokesman said the audit showed “the previous government made significant funding commitments for this financial year without knowing where the money would come from”.
The spokesman said: “The assessment will show that Britain is broken and broken – revealing the mess that populist politics has made for the economy and public services.”
Keir Starmer and his ministers will continue to blame the last government for a range of decisions they are preparing to make in the coming months that will prove controversial and unpopular, including some likely tax rises in the autumn budget, as well as severe restraint on expenditure.
Last week, Starmer suffered his first rebellion from Labor over his refusal to scrap the two-person benefit cap, which saw him suspend the whip for six months from seven of his MPs .
On Saturday, the Financial Times Reeves was reported to be delaying several unfunded road building and hospital schemes. There is speculation she could pull the plug on a proposed £1.7bn road tunnel under Stonehenge, as well as the 14-mile Lower Thames Crossing, a road and tunnel under the river estimated to cost £9bn.
But ministers are also ready to outline what they argue is an urgent need to start repairing public services and start generating economic activity.
Unlike the Tory-Liberal Democrat coalition, which has embarked on a period of across-the-board austerity across the state, Reeves is expected to agree to an above-inflation pay deal for millions of public service workers, including teachers and NHS staff. Wage bodies representing the groups have proposed increases understood to be around 5%, which ministers have indicated could be met in full to prevent more damaging and costly strikes.
Increasing house building by removing barriers in the planning system is seen as a way to generate economic growth and address a growing supply and affordability crisis.
Sources close to Rayner, who was brought up in a council house in Stockport, said she was laser-focused on providing more social housing. There are 4m families in the social rented sector, but almost 1.3m families on social housing waiting lists.
During the 13 years of Labor government between 1997 and 2010, almost 363,000 new social rented homes were delivered compared to just over 171,000 in the 13 years of Conservative rule between 2010 and 2023 – of which 45% (over 77,000) were delivered. i. the first two years, meaning they were probably the result of the affordable homes program implemented by the previous Labor government.
Jeremy Hunt, the shadow chancellor, said Labour’s claims that the public finances were suddenly in such a dire state were completely false.
“Since we founded the OBR [Office for Budget Responsibility] in 2010, the books were wide open and show a healthy and growing economy – not the fiction now sought by Labor, widely rejected by independent commentators.
“Their aim is clear: after promising not to raise taxes 50 times before the election, they now need an excuse, but trying to scam the British people so soon after after they are elected.”
Rayner makes it clear she will take on Tory opponents of more housing.
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“This Labor government is not afraid to make tough decisions in the interest of the country to grow power in all parts of the country. We were elected on a mandate to build the homes Britain needs and to make the tough choices to dismantle the planning system and make it happen. When it comes to building houses, the question will no longer be ‘if’, but ‘how’.
“Not only is it my No. 1 priority. But it is also a crucial step on the path to 1.5m homes, which kickstarts the sector out of this slump. That’s why we will take action to inject confidence and certainty into the social housing system, so that councils and private providers can get back to building.
“Local leaders who know their areas best will be key to helping us achieve these bold ambitions.
We will therefore work with local government to plan new housing in the best possible locations, with the supporting infrastructure, public services and green spaces that residents need.
“We will also prioritize redevelopment and make sure that a green belt established in the mid-20th century works properly for the 21st century.”