Town halls have warned that they may not be able to meet the Government’s house-building targets unless they are allowed to put up council tax by 10 per cent.

New research shows that 84 per cent of district councils are unable to afford enough planning officers to ensure Labour’s pledge of 1.5 million new homes within the next five years.

The District Council Network (DCN) called on Rachel Reeves, the Chancellor, to announce millions of pounds of extra funding for planning departments in her Budget later this month. They also urged her to allow them to put up council tax by 10 per cent next year – double the maximum allowed at the moment.

Richard Wright, the DCN’s planning and growth spokesman, said a funding shortage could open the door to sub-optimal developments that did not result in pleasant, safe and environmentally-sound communities that meet future local needs.

“Councils are essential partners for the Government to achieve its national mission of driving growth and new homes – but we need to enhance and retain local expertise to do this successfully,” he said.

“Planning departments have been among the most impacted in recent years as shrinking budgets have forced councils to reduce spending – but if the Government’s house-building revolution is to succeed, we need a step change in the recruitment and retention of planners.

“Properly resourced planners can help ensure the Government’s house-building plans will bring about hundreds of sustainable and well-sited new communities that provide housing which will stand the test of time.

“With degraded planning expertise, we risk building housing in isolated locations which are beset by social problems, and in which no one wants to live. So I urge the Treasury to properly resource planning authorities if it wants the Government to achieve its most fundamental goal of ending the housing crisis.”

The research shows that building control and housing services are other areas of councils’ work that contribute to new homes but are experiencing significant personnel shortages. Some 49 per cent of councils are facing shortages in their building control departments.

In nearly a third of councils, teams trying to prevent homelessness – work that reduces the burden of other parts of the public sector, including the NHS – also experienced shortages.

Staff have been leaving the sector for years, and DCN member councils also face workforce shortages in finance and legal services departments, which are essential to ensuring that services operate affordably and legally.

Jeremy Newmark, the DCN’s finance spokesman, said: “For too many years councils’ funding has either fallen or failed to keep pace with demand for services, and we seek urgent support from the Government in the Budget.

“Local services and national policy goals depend on properly functioning councils – but deepening shortages of finance officers and lawyers have the potential to paralyse councils, or even lead to their collapse. It’s in the Treasury’s interest to act now to ward off far worse problems later.”

The scale of extra spending caused by wage increases is also revealed by the DCN’s research. On average, the 169 member councils had to budget an additional £881,000 each in extra pay for 2024/25 – an increase in 5.2 per cent across the district council sector as a whole. They have budgeted for further rises of 3.3 per cent in 2025/26 and 3.1 per cent in 2026/27.

Four-fifths of the councils that completed the DCN’s survey project a budget shortfall in 2025/26, averaging about seven per cent of revenue budgets. The figure for 2026/27 is even higher, with the shortfall representing 11 per cent of revenue budgets.