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As his Thames Gateway dreams fade in the South, doubts are surfacing over his plans to revive those areas of the North and Midlands where nobody at present wants to live. The transformation of a million blighted homes in nine "pathfinder" areas might generate a few snappy headlines – "Sex in Coronation Street" is ours (pages 48-50) – but the logic of Prescott's proposals is less easy to fathom. The problem is simply the scale of the task. In the East Lancashire pathfinder, one in four homes is unfit for habitation. Three-bedroom houses change hands for £5000. You can flog them down the pub. And bad housing means, as we know from Oldham, bad health, bad schools and bad politics.

Nobody could accuse Prescott of ducking the challenge of revivifying these benighted communities. He also must have recognised that doing so was the political counterbalance to his department's economic spending on the "growth areas" in the South, such as Ashford (see news). And he has two things in his favour. First, the pathfinders are headed by some of the best brains in the regeneration business, such as Hulme veteran David Taylor and former Housing Corporation boss Max Steinberg. And second, four pathfinders are located in flourishing cities – Birmingham, Newcastle, Liverpool and Manchester. As Davis Langdon & Everest points out, the last is "one of the biggest housing regeneration projects in Britain for 30 years" with a potential £1.3bn budget (pages 66-68). So far, so good (not least for our industry).

The prospects elsewhere are less rosy. Liverpool's status as 2008 European City of Culture will attract jobs and investment, but what's going to do the same for an out-of-work former cotton-weaving town such as Blackburn? Even jobs in the 21st-century's satanic mills – call centres – are being exported to India. Does East Lancashire really offer "tremendous potential for economic development", as its briefing paper suggests? Can even operators like Taylor exploit Prescott's millions to prise dozens more out of the business community? If not, what will the people who live in all those tarted-up houses do for a living?

Business people invited to assist the pathfinders are muttering that Prescott isn't providing enough cash and direction. Indeed, the government's only significant intervention so far has been to try to direct new housing to the pathfinders by using the planning system to choke off approvals in areas of high demand. This smacks of Nicholas Ridley's old toothpaste policy – but instead of squeezing the South so new homes spurt out in the North, Prescott is doing it within the North. The region has enough economic disadvantages without Whitehall adding more.

In truth, the problems of the North cannot be resolved by dirigiste planning and the pathfinders.

On their own, they have no more chance of success than the other schemes of the past 20 years, from garden cities to millennium villages. They even risk alienating the people they are intended to assist. In Rochdale, locals weren't too chuffed with proposals for funky architect-designed terraces – they wanted traditional semis. To really tackle long-term decline, Prescott needs to start with something like the post-war Barlow Commission, followed by an all-embracing, regional plan. Instead, he's given us a few missionaries and a great many pious hopes.