Taskforce will work up proposals that may include post-war-style development bodies

The Treasury is looking at establishing a new breed of development corporation with the power and money to force the pace of housing provision.

黑洞社区 has learned that, as part of a wider review of housing growth being carried out in the run-up to the Comprehensive Spending Review, the Treasury is exploring how settlements can be financed.

Yvette Cooper, the housing minister, who is a close ally of Gordon Brown, is understood to be keen on the post-war new town development corporations. She has set up a taskforce, which held its first meeting last week, to develop proposals for sustainable new towns.

The post-war Attlee government loaned the corporations money to pay for land purchases and infrastructure. This was then recouped from land sales to developers. The corporations were wound up as part of the public spending curbs in the eighties.

The Treasury is now looking at whether it would be possible to provide upfront funding that will not count on the government鈥檚 balance sheet.

Charles Clarke, the former home secretary, called for councils to be given the freedom to borrow for housebuilding.

He said: 鈥淚f the private sector is not building enough family housing the local authority should take the lead in ensuring that it is built, including building it itself if necessary. I think that now may well be the time to relax public spending borrowing requirement restrictions on local authorities.

鈥淚t should now be possible to find mechanisms to permit at least some local authorities to borrow on the market.鈥�

John Walker, the former chief executive of the Commission for the New Towns, welcomed the renewed interest in new town corporations.

He said: 鈥淭he past few years puts into perspective how successful the new town corporations were.鈥�