'Failure' on cheap homes targets

High prices have left many unable to buy

Most local authorities doubt they will meet needs for affordable housing by 2007 - even with a £3.3bn cash injection - a report has warned.

This is despite it being a priority issue for local authorities and government, the National Audit Office and the Audit Commission said.

Only two percent of local authorities thought they would reach the amount of rented social housing required by 2007.

The report said improvements were needed throughout the chain.

Rocketing house prices, particularly in the south of England, have made it increasingly difficult for people to find a home they can afford.

As a result key workers, such as nurses and teachers, were being priced out of the market, while many found themselves living in unreasonable accommodation.

Planning applications

From 2004-5 the Housing Corporation - the government agency which oversees housing associations in England - delivered nearly 29,000 new affordable homes, against a target of 27,000.

Despite this, just four percent of local authorities thought they would meet the need for intermediate housing by 2007.

While progress is being made, building more affordable homes remains a huge challenge James Strachan, Audit Commission chairman

The report also called for public sector bodies which owned large amounts of land to help by disposing of it for affordable housing, rather than selling it to the highest bidder.

Local authorities needed to work with housing associations and developers to give a clear, consistent message to local communities about the need for affordable housing, it said.

They also needed to improve cooperation between their planning and housing departments, and speed up the planning process with a single point of contact for applications.

Auditor General Sir John Bourn said there were several areas where central and regional bodies could provide "better leadership, guidance, clarity and co-ordination".

We need to improve the provision of affordable housing and it's a pity that the government is still so far behind in meeting that need Michael Gove, shadow housing minister

"More houses could be built more quickly and a streamlining of the delivery chain would help the department meet its commitments under the wider efficiency programme," he said.

Audit Commission chairman James Strachan added: "While progress is being made, building more affordable homes remains a huge challenge."

Housing Minister Yvette Cooper said the government agreed they needed to speed up the planning process "and promote stronger roles for local authorities in delivering affordable homes".

But shadow housing minister Michael Gove said the Deputy Prime Minister John Prescott had set ambitious targets without giving local authorities with the tools they needed.

"We need to improve the provision of affordable housing and it's a pity that the government is still so far behind in meeting that need," he said.