The government's commitment to urban regeneration has come under scrutiny after last week's Budget.
The concerns have been sparked by Chancellor Gordon Brown's decision to rule out the Barker review's proposal to introduce a tax credit to encourage the redevelopment of long-term derelict sites. He also failed to take the opportunity to cut VAT rates for refurbishment projects.
The Budget report says that the Treasury has rejected the derelict land tax credit, partly because it would give landowners a perverse incentive to keep sites unused. The credit is designed to tackle the long-term derelict brownfield sites, which make up a large chunk of England's 64,000 ha of brownfield land.
The report says: "It is unclear how this would be done in a cost effective way and without encouraging dereliction or subsidising development that would have taken place anyway."
Allan Wilén, Construction Products Association economics director, expressed disappointment that the government had not taken up his organisation's alternative proposal to give land owners and developers a tax incentive to redevelop derelict sites.
The Budget statement also included details of a cross-government review of regeneration efforts, which could lead to a cull of regeneration institutions. It is likely to examine the performance of the nine housing market renewal pathfinders, six of which received a two-year extension of their funding lifeline last week.
The pathfinders, which have come under attack from a coalition of heritage campaigners and local residents, were awarded £482m worth of funding. All but one of the pathfinders - Bridging NewcastleGateshead - received an increased allocation.
Professor Brendan Nevin, housing director of the consultancy Ecotec, said that last week's allocation meant that the ODPM was not on track to spend the £725m promised. "I suspect that there's an amount of money being held back," he said.