The government is due to announce a sweeping overhaul of town planning rules this week to encourage the building of more affordable homes as it confronts the economic and social legacy of 14 years of Conservative rule.
Deputy First Minister Angela Rayner is due to present a new national planning policy framework to MPs on Tuesday before the summer recess, which will tighten requirements to build far more affordable homes in areas that need them, from this autumn.
writing Observer Speaking before the announcement, Mr Rayner said that since taking office ministers had uncovered a “frankly scandalous legacy” lurking “beneath every stone we lift”.
With many people struggling to find housing or somewhere to live, she says “delivering social care and affordable housing at scale” is her “number one priority”.
“There is not enough housing,” she writes. “An exhausted Conservative government has given up power in its death throes, exacerbating housing failure: 41% fewer homes were started in the first three months of this year than the same period in 2023.”
Mr Rayner’s move follows the publication on Monday by Finance Minister Rachel Reeves of the findings of a Treasury audit into Labour’s spending succession.
Mr Reeves is expected to reveal a larger-than-expected “black hole” of around £20 billion between spending and income, as he prepares the public for the difficult choices ahead about spending and taxation.
A government spokesman said the audit revealed that “the previous administration committed significant amounts of funding to the current financial year without knowing the source of the funds”.
The spokesman added: “The assessment makes clear that the UK is bankrupt and falling apart and that populist politics is wreaking havoc on our economy and public services.”
Chancellor Keir Starmer and his cabinet are likely to continue to blame the previous government for many of the controversial and unpopular decisions they face in the coming months, including tax rises and tough spending cuts expected in the autumn Budget.
Last week Starmer faced his first Labour rebellion over his refusal to lift the second child limit on welfare payments, resulting in him being suspended as leader of the party’s seven-member House of Commons for six months.
On Saturday, Financial Times Reeves is reported to be planning to postpone several underfunded road and hospital construction projects, and there is speculation he may cancel plans for a £1.7 billion road tunnel under Stonehenge and the Lower Thames Crossing, a 14-mile road and tunnel under the river that is expected to cost £9 billion.
But ministers insist there is an urgent need to repair public services and start generating economic activity, and they are ready to get to work on that.
Unlike the Conservative-Liberal Democrat coalition government, which has instituted sweeping austerity measures across the state, Mr Reeves is expected to agree above-inflation pay for millions of civil servants, including teachers and NHS staff. Pay groups representing the groups have recommended pay increases thought to be around 5 percent, and ministers have suggested the increases could be met in full to prevent more damaging and costly strike action.
Unblocking the planning system and building more houses is seen as a way to generate economic growth and address the deepening supply and house affordability crisis.
Sources close to Ms Rayner, who grew up on a council estate in Stockport, say she is committed to building more council housing, with nearly 1.3 million on the waiting list for council housing compared to 4 million renters.
During the 13 years of Labour government from 1997 to 2010, around 363,000 new social rented homes were delivered, compared with just over 171,000 under the 13 years of Conservative government from 2010 to 2023. Of these, 45% (more than 77,000) were delivered in the first two years, meaning they are likely the result of the affordable housing programme implemented by the previous Labour government.
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Shadow Chancellor Jeremy Hunt said Labour’s claim that the public finances were suddenly in such a dire state was completely false.
“Since establishing OBR [Office for Budget Responsibility] In 2010 the books were opened wide and what was shown was a healthy and growing economy, not the fiction now peddled by Labour and widely rejected by independent commentators.
“Their motives are clear – having promised 50 times before the election that they would not increase taxes, they now need an excuse, but trying to deceive the British people so soon after the election is a high-risk strategy doomed to failure.”
Mr Rayner made it clear he would take on the Conservatives who oppose building more homes.
“This Labour government will not be afraid to take tough decisions to drive growth across the country in the national interest. We were elected with a mandate to make the tough choices to build the homes Britain needs and break down the bottlenecks in the planning system to get it done. When it comes to building houses, we will no longer be asking ‘if’ but ‘how’.
“Delivering social and affordable housing at scale is not only my number one priority to ensure everyone has a safe place to live, it is a vital step towards building 1.5 million homes and helping lead the housing sector out of this recession. That’s why we will act to inject confidence and certainty into the social housing system, and get local authorities and private providers building again.”
“Local leaders know their communities best and will be key to helping us realise this bold ambition.
That’s why we will work with local authorities to plan new homes in the best possible locations, with the supporting infrastructure, public services and green spaces that residents need.
“We will also make brownfield development a top priority and ensure that the green belt established in the mid-20th century remains relevant in the 21st century.”
