London calling

In his lilac silk tie, coordinated pink shirt and prominent cufflinks, George Barlow is something of a dapper dresser. In fact, he seems to be a stickler for convention and propriety all round. He mentions having lost the kind of engraved silver pen associated with long service, and declines to stand on a raised ornamental flower-bed to pose for an unconventional portrait.

In the courtyard of the London Development Agency's Thames-side headquarters at St Katherine's Dock, he would have preferred a shot with Tower Bridge and the Greater London Authority's brand new City Hall visible in the background. Perhaps the composition struck him as ideal for demonstrating his traditional style and loyalty to the man who appointed him – Ken Livingstone.

The LDA, chaired by Barlow, a former Peabody Trust chief executive, is responsible for smoothing investors' paths to London and stimulating economic activity in the capital. But compared with England's eight other regional development agencies, the London body has always had its star eclipsed by the astrological phenomenon that is Ken Livingstone's mayoralty.

But that was before July's comprehensive spending review and a statement from deputy prime minister John Prescott that emphasised the need to hand power to the regions. "RDAs have shot up the agenda," says Barlow. "Both the spending review and the deputy prime minister underlined that the government sees them as hugely important. RDAs are major players, backed up by regional assemblies – RDAs also welcome proposals to establish regional housing bodies.

"For the first time economic development strategy can now be both influenced and informed by regional housing strategy – so investment in housing will be very much tied into an overarching economic strategy."

If housing policy has so far illustrated the LDA's lack of firepower, it now provides an opportunity for it to step out of the GLA's shadow. And while the LDA's current remit does not allow it to broker deals with housebuilders, employers or housing associations, its role could soon enlarge to match the issue's importance. An adequate supply of affordable housing is crucial to London's economy – although Barlow says additional investment in housing will be meaningless without proper provision for transport, education and health.

The draft London plan talks of housing an extra 600,000 employees over the next 15 years. From the LDA's point of view, the fear is that London's economy could seize up from recruitment problems, or that consumers' disposable income will be soaked up in housing costs. But Barlow stresses that London's housing problems aren't simply a London issue: "The success of London as a good place to live and work and as a great international business centre determines the future wealth of the country as a whole.

"On housing, we want to work with others to try to lift the pressures on lower-paid people working in all sectors.

We need to consider what role we can and should play, bearing in mind we're not a housing authority," Barlow says. The LDA board will deliberate on the issue over the summer, coming to a conclusion in early autumn.

In advance of a decision, Barlow stresses he can only speak in a personal capacity.

But, even choosing his words carefully, he is confident enough to describe "a partnership between housing providers and business representatives in London, backed by the LDA, to see if we could bring forward specific proposals. Some quite new and innovative things could come out of sitting down together".

Given its limited resources, bringing diverse groups together in this way is its great strength. "The funds available to the LDA are comparatively modest, so bringing people to work together is a key role. Our staff have the development experience and skills to achieve that.

The success of London as a good place to live and work and as a great international business centre determines the future wealth of the country as a whole

"The LDA is in a very strong position to work with private developers and local authorities to help realise the mayoral vision for housing supply," Barlow says.

His vision of collaborative working involves bringing the GLA, London boroughs, central government and property developers into "the voluntary equivalent of urban development corporations" to prepare and masterplan sites. Ken Livingstone has already appointed it to lay the groundwork for the development of the Thames Gateway, east of London.

As LDA chair though, Barlow views the delivery of new housing through an appropriately wide-angle lens. "The housing targets for London over the next 15 years will not be achieved unless there is a concerted investment in new transport infrastructure," he says, speaking slowly, with pauses to plan the end of his sentences before he sets off. "Without Crossrail [two proposed cross-London rail routes due to be running by 2013] and new river crossings, the Thames Gateway won't be able to make the contribution that's needed. We're not just talking about building homes, but building new townships."

A chartered surveyor by profession, Barlow spent 12 years as chief executive of the Metropolitan Housing Trust before joining the Peabody Trust for another 12-year stretch. He's keen to stress his continuing links with social housing in general and his former employer in particular. He refers to an LDA-funded demonstration project with the Peabody Trust, where a prefabricated housing "pod" was exhibited at the Daily Mail Ideal Home Show, and mentions the LDA's support of a Centrepoint/Peabody Trust youth homelessness project.

Barlow concedes that the LDA's direct role in promoting housing development is limited. Although it has inherited a clutch of ex-industrial sites in the Thames Gateway area and south-east London from English Partnerships, and "considerable powers" in terms of site assembly and compulsory purchase, economic regeneration has to be the primary driver of any scheme.

The LDA's prospective role as an honest broker between public sector authorities, developers and housebuilders could be crucial to delivering the mayor's 35/50% affordable housing targets on London sites. Here, Barlow has little patience with housebuilders who find it easier to complain than offer any constructive alternatives.

"The point of the draft London plan is that it says 'come back to us and tell us your proposals'. It's both an enormous challenge and a great opportunity."

And as evidence that it should be possible for housebuilders to adapt to life on the increasingly blurred private/public sector boundary, he offers an experience drawn from his 24 years as a housing association chief executive.

"To give an analogy, in the late 1970s, housing associations were told by the government that they could no longer expect 100% housing association grant, and would have to find 25% capital finance.

That 25% later rose to 50%, but housing associations were able to develop enough expertise to make it possible.