Ministers are undermining confidence among housebuilders by their muddled announcements on housing and planning policy claims Nick Raynsford

Does the coalition government have a strategic plan, other than deficit reduction? To date most of its highly publicised decisions smack of ad hoc initiatives, with little sense of cohesion. Indeed the main motive for many of its policy announcements appears to be to boost the profile of individual ministers.

This is particularly true of CLG where the secretary of state, Eric Pickles, and the housing minister, Grant Shapps, have been vying to attract attention with a series of high profile announcements. The irony is that the impact of what they have done to date is having the very opposite effect to that which they say they want to achieve. Their record on housing is very revealing.

They started by taking the axe to regional planning and infill development (so-called ‘garden grabbing’). Both changes of policy had the immediate effect of undermining the confidence of housebuilders who had just begun to see recovery from the most serious downturn to hit their industry for more than 50 years.

Before the election, worried housebuilders had been reassured by Tory spokesmen that there would be transitional arrangements to safeguard the market from the widely predicted negative impact of the abolition of regional planning statements. But with no transitional measures in place and no published details of the supposed ‘incentive’ scheme to encourage councils to grant planning consent for housing, it is hardly surprising that the Government is now facing a legal challenge from the housebuilders.

For the traditionally cautious Home Builders Federation to be backing an application for judicial review of the planning changes, so soon in the life of a new Government, speaks volumes about how troubled housebuilders are about the negative impact of the coalition’s policies.

The ‘housing bonus’ incentive scheme provides another illustration of confusion. It has been announced more times that almost any coalition policy other than the Big Society, but no one is any the wiser as to how it will operate. Grant Shapps promised the details would be made public before the summer Parliamentary recess, but nothing appeared. Now we have Eric Pickles making further extravagant claims but without explaining how it will interface with revenue support grant, how many local authorities will lose as a result of the topslice, and how a scheme whose impact will be almost impossible to forecast accurately can act as an incentive.

They can’t claim they weren’t warned. Readers of The MJ can refer back to the issue of 17 December 2009, where I posed a series of questions about the scheme and warned that in the absence of clear answers, we would conclude that the ‘proposals are no more than warm words devised by public relations advisers to cover a black hole in Conservative Party policy.’

If destabilising the housebuilding industry and throwing the planning system into chaos was not enough, Shapps and Pickles have compounded the problem by cutting investment in affordable and social housing. Over the past two years the Homes and Communities Agency has played a crucial role in keeping housebuilding alive through investment in local authority and housing association homes and support for developers through the Kickstart scheme.

This was crucial in helping to prompt a recovery in housebuilding in the first half of this year. Kicking this investment support away, when the private sector is still not strong enough to sustain recovery is frankly irresponsible opening the door to the risk of double-dip recession.

But this isn’t the end of the story. The confidence of lenders who have poured tens of billions into housing association development was also put at risk by Shapps’ precipitate announcement that he was abolishing the social housing regulator, the Tenant Services Authority – another headline-grabbing announcement which had to be put on hold when the Treasury became aware of the potential damage.

And any hope that private rented housing might expand to fill the gap has been dealt a body blow by the swingeing cuts in housing benefit being threatened by DWP and the Treasury, about which CLG ministers have remained conspicuously silent.

To add insult to injury David Cameron waded into the already murky waters in early August with a suggestion, which apparently Grant Shapps had been eager to make, that the Government might take security of tenure away from social housing lettings. At a stroke this caused alarm and concern to millions of existing and potential council and housing association tenants, in direct contravention of election pledges given less than six months before to respect tenants’ rights.

All in all it is a lamentable story of inept and maladroit interventions which have undermined confidence in every sector of housing. The greatest irony of all is that it comes from a government that claims that it wants to promote housebuilding.

Nick Raynsford is a former local government minister