The group charged with setting up a growth area in northern England is to tell the government that housing must become central to the region's economic regeneration.
Leaked documents show that the steering group launched on the recommendation of the deputy prime minister's growth plan for the area, the Northern Way, will also push for places where people want to live, not just decent homes, to be created.

The documents, part of the group's interim report, recommend examining planning guidance to encourage the building of more homes so that a lack of good-quality housing does not hamper economic progress.

It says there is "clear evidence that a failure to increase the scale of change will undermine the wider economic regeneration agenda".

The report will ease the concerns of many in the sector who feared the Northern Way would not take housing into account (HT 26 March, page 12), though fears remain that the strategy is being rushed through.

John Moralee, chief executive of Northern Housing Consortium, said: "Our members were afraid housing's role within the Northern Way had not been fully recognised. But it looks like they've realised housing is a key driver in economic as well as regeneration terms."

The report warns against devoting too much funding for housing to the meeting of the decent homes target.

It says: "Strategies for investment/project appraisal in the extant public sector stock should be refocused to take account of the delivery of balanced communities and sustainable markets." It adds that investment in public sector housing stock may need to be "redesigned" to ensure environmental improvements can be done.

Bill Payne, chief executive of Yorkshire Community Housing Group, said: "It's finally a helpful counter to the South-east-focused view of the world we normally get to see. Let's hope the resources match up."

A spokesman for regional development agency One North East, which is overseeing the publication of the strategy, stressed work on the document was in progress. But he added: "[It] explores the key challenges and makes initial suggestions as to how these issues could be tackled. These are not firm proposals."

The steering board has to complete its report by the end of June so it can be considered ahead of the comprehensive spending review.

In the meantime, it has asked the Centre for Urban and Regional Studies to do a review of the regional housing strategies of each of the three northern regions. This is to be produced at exceptionally short notice – final reports are to be submitted at the end of this month.