Now that the Conservative party is ambling to victory at the next election victory, it has much more freedom to develop housing policy. Jon Neale looks at what it’s likely to be

Barring a miracle, a Tory government will become a reality next summer and – if recent reports are to be believed – much of our present planning and housing policy will be consigned to the dustbin.

Centralised targets on delivery numbers and density will be abolished, councils will be given virtually free rein to decide how much housing goes where, and in return will be allowed to keep the first six years of new residents’ council tax rather than handing it over to the Treasury.

This will definitely stimulate development in cities such as Manchester, where growth is seen as desirable, but it is debatable whether it will do so in the South and East, where opposition to development – and the need for new homes – is most intense.

Take a borough such as Surrey Heath, earmarked for 187 homes a year at present. If it opts to proceed with this plan under the new system, the extra tax will add just £280,500 to the authority’s yearly budget of £38.6m – an annual rate of £1,500 per home.

This would add up to £1.7m by the sixth year, if the council continued building at this rate, but is this sufficient to swing local views in affluent areas in favour of development?

To add, say, 10% to the council’s budget by that sixth year – which might produce a more noticeable change – Surrey Heath would have to make provisions for more than twice the number of homes planned. Will the residents of Chobham agree to this scale of development for slight rewards?

If anything, councils could begin to cram as many units as possible into brownfield sites to maximise taxes while keeping voter resistance to a minimum.

One thing is clear: the source of these ideas is the trilogy of pamphlets on the planning system published by the influential centre-right thinktank Policy Exchange two years ago. Alongside freeing up the green belt and allowing cities to expand, it called for communities to be allowed to keep more of the benefits of physical growth.

Neo-liberal economic theory crossed with home counties’ nimbyism has produced a policy acceptable to both wings of the tory party

The publications were strategic as well as ideological. The Conservative party had lost three elections appealing to the Shires. Policy Exchange suggested focusing instead on young voters in places such as Essex and Kent who have been priced out of home ownership in towns. The idea is to argue that Labour’s planning restrictions were the reason why family-sized properties cost more than 10 times their salaries.

But now that the Labour party has handed the Tories the next election on a plate, the need for radical policies has vanished. Instead, the Tories have adopted enough of the agenda to keep two wings of its support happy.

Neo-liberal economic theory crossed with Home Counties’ nimbyism has produced a policy vaguely acceptable to both. The policy edges towards dismantling the planning system, while keeping the government’s power to halt development intact.

This tension in the party is nothing new. When in the nineties Tory MP John Gummer tore apart Nicholas Ridley’s laissez-faire approach to development and initiated the brownfield-first agenda, it was very popular with Tory voters.

But Alfred Sherman, one of Margaret Thatcher’s closest advisers, attacked this betrayal of her legacy, and ridiculed the idea that cramming people into cities and keeping farmland undeveloped is desirable.

Undeniably, this policy is a step in the right direction. There is a need for more localism in politics and finance, alongside greater incentives for development.

Balancing local autonomy with the need for more homes remains one of the greatest domestic challenges. The final paper in the Conservative Party's series will be published later this summer. It will be interesting to see how it tackles this hot potato.