Almost 85,000 planned homes have been scrapped by councils across England in the wake of the Government's decision to axe regional housebuilding targets, according to a campaign group.

An independent report, commissioned by the National Housing Federation, found many town halls have substantially reduced plans for new homes following the decision by ministers to advise them to ignore the previous government's regional housebuilding targets and the subsequent abolition of the targets altogether.

Communities Secretary Eric Pickles wrote to local authorities in May outlining the Government's commitment to abolishing regional strategies. This followed a letter sent to local authorities last year by Caroline Spelman, who was then shadow Communities Secretary, announcing the Conservative party’s intention to abolish regional targets following the election.

On 6 July, Mr Pickles formally revoked the regional targets with immediate effect saying: "They were a terrible, expensive, time-consuming way to impose house building."

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The research commissioned by the Federation – carried out by Tetlow King Planning – found Mr Pickles's letter in May had a 'very significant impact' on reducing local authority housebuilding targets. The Federation believes the Government’s decision to allow councils to ignore the regional targets has resulted directly or indirectly in plans to build 84,150homes being dropped.

Only 123,000 homes were built in 2009/10 – the lowest figure since 1923. But the scrapping of the housing targets could see that total fall below the 100,000 mark for the first time in almost a century. This would prove disastrous for the record 4.5 million people in England currently stuck on housing waiting lists.

Tetlow King said: "In the immediate aftermath of [Mr Pickles’s letter of 27 May] a number of authorities announced that they would be reducing their housing targets or suspending work on core [housing] strategies. A number also delayed the determination of large strategic housing developments."

They added: "Some authorities had already been planning for lower targets before Eric Pickles’s letter was released...Some had been influenced by Caroline Spelman’s letter, sent in August 2009, advising local authorities of a potential Conservative Government’s intention to abolish regional housing targets and not to progress controversial housing targets."

Federation Chief Executive David Orr said: "With more than 4.5m people on waiting lists, and 2.5m people in overcrowded conditions, this is no time to downgrade the need for new homes.

"It is frankly disappointing that so many local authorities have decided to revise down the number of homes planned for their areas following the scrapping of the regional housebuilding targets.

"Local authorities need to recognise that just because regional targets have gone, housing need has not.

"To prevent a slump in the number of desperately needed new homes, the Government should replace the regional planning system with transitional arrangements as a matter of urgency."

(CD/BMcC)