George Osborne will face accusations that he has abandoned the Conservative manifesto commitment to localism as he unveils sweeping plans to force councils to accept development of brownfield land and allow homeowners in London to add up to two more storeys.

The chancellor will say his reforms are designed to address the fact that Britain has been “incapable of building enough homes”, while maintaining protections for the green belt.

The proposals to relax the planning system even further were immediately welcomed by developers. However, the government is preparing for a battle with some local communities fighting unwanted development, as experts pointed out that the plans amounted to a much greater centralisation of the planning system.

As he launches the policy initiative on Friday, the chancellor will say he wants London residents to be freed to add up to two extra storeys on their properties without needing local council planning approval. There will also be brownfield zones where planning permission for new buildings is automatic.

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The fresh assault on Britain’s planning laws will be the centrepiece of what Treasury officials describe as the “second half” of an audacious budget that Osborne claims has allowed the Conservatives to occupy the new centre ground of British politics, and created a new settlement between state and individual.

The 90-page blueprint, called Fixing the Foundations: Creating a More Prosperous Nation, is due to be unveiled in Birmingham on Friday by Osborne and the business secretary, Sajid Javid.

Speaking on BBC Radio 4’s Today programme on Thursday, Javid was confronted with the Conservative manifesto promise to keep planning rules under local control, and he insisted the changes did not amount to a retreat from that pledge.

“Local people will still have control over planning … The point of this is that we built more homes, and local people are still involved rightly in those decisions, but this speeds it up,” he said.

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However, Tony Travers, director of the political research group LSE London, pointed out that the changes seemed to be “closer to nationalising some planning decisions than we’ve seen in the past, which is an interesting shift away from localism”.

The industry was highly supportive of Osborne’s plans but raised concerns that cuts to planning departments could still prove a barrier to higher housebuilding.

Melanie Leech, chief executive of the British Property Federation, said Osborne’s changes “really hit the nail on the head for a number of planning issues”.

She added: “In order for these changes to make a difference, however, we strongly urge government to begin a dialogue with both the public and private sectors on how to address the severe shortage of funds which is afflicting local planning departments.”

Jeremy Blackburn, head of policy at the Royal Institute for Chartered Surveyors, said it would be a “forward step in guaranteeing property-led growth”, as the measures were key parts of getting building and development moving.

Under the plans, Osborne will say overcrowded London needs to expand upwards and that anyone should be free to build up to the level of their neighbour’s property.

At present there are limited rights to build extra storeys at the back of buildings. The government has already relaxed planning laws on house extensions and the right to convert shops into houses, but this latest move on so-called “permitted development rights” takes the drive to increase housing density to another level.

The chancellor will say: “Britain has been incapable of building enough homes. The reforms we made to the planning system in the last parliament have started to improve the situation: planning permissions and housing starts are at a seven-year high.”

During the election campaign, David Cameron rejected arbitrary national housebuilding targets, but claimed action taken during the past five years meant the UK was on course to deliver 200,000 new homes a year by 2017.

Osborne is expected to say: “We need to go further and I am not prepared to stand by when people who want to get on the housing ladder can’t do so. We’ll keep on protecting the green belt, but these latest planning reforms are a vital part of a comprehensive plan to confront the challenge of our lifetime and raise productivity and living standards.”

The main changes to planning law will include:

A new “zonal” system, as employed in many other countries, which will give automatic planning permission on all suitable brownfield sites, removing unnecessary delays to redevelopment.



Power for the government to intervene and have local plans drafted setting out how housing needs will be met when local authorities fail to produce them, and penalties for those that make 50% or fewer planning decisions on time.



Stronger compulsory purchase powers to bring forward more brownfield land and devolution of planning powers, including powers over land, to the mayors of London and Manchester.



The right for major infrastructure projects that include elements of housing development to be fast-tracked through the Nationally Significant Infrastructure regime – meaning the project does not need to go through full democratic consultation.



Proposals to end the need for planning permission for upwards extensions for a limited number of storeys up to the height of the adjoining building in the capital.

A package to support small and medium-sized housebuilders, including new sanctions for local authorities not processing smaller planning applications on time, with earlier fee refunds.

Local authorities say planning delays are caused by the lack of resources in planning departments, but the government is likely to provide a blueprint for how these planning requests should be handled.



Osborne fought a number of bruising encounters with conservationists in the last parliament, and seems to be determined to do so again on the basis that the supply of land at the right price has been the single biggest factor holding back housebuilding.

During the election, Cameron specifically promised that 200,000 homes would be made available to first-time buyers in England by 2020. The coalition government had already announced plans for 100,000 cut-price homes for people aged under 40.

Osborne will point out that if the British government could match the productivity of the US, the GDP of the UK would rise by 31% – the equivalent of £21,000 a year for every household in the UK. Narrowing the gap even a little, so that trend growth is raised by just 0.1%, would mean the UK economy would be £35bn larger in 2030 –

approximately £1,100 extra for every household.

The new plan will reflect the first output from the new commercial secretary to the Treasury, Lord O’Neill, who was appointed by Osborne to help with the devolution agenda following his report on the importance of cities outside London to boosting UK productivity.

Chris Leslie, the shadow chancellor, pointed out that the UK economy had undergone, in the words of the Office for National Statistics, a period of “unprecedented” stagnation under Osborne.