Downturn may halt Boris's 50,000 homes

Boris Johnson has admitted that the recession could defeat his plans to build 50,000 affordable homes by 2011 - one of his key election promises.

In his first admission that he may not be able to fulfil his election pledge, the Mayor said these were very "dark" times for London financially.

Mr Johnson was speaking at a meeting of the London Chamber of Commerce and Industry last night where business leaders quizzed him over his record on small businesses.

He was also asked whether he would consider abolishing the whole of the congestion charge and how he planned to help London recover from the recession.

When he came into power last May, Mr Johnson scrapped the existing policy of insisting developers include 50 per cent affordable housing to gain planning permission and introduced a figure of 50,000 by agreeing individual targets with each borough.

So far a provisional agreement has been reached with 14 London boroughs to deliver more than 16,750 homes. The remaining 19 boroughs have identified a further 20,500 affordable homes. But there are still 12,750 which have not been agreed with Brent and Newham proving sticking points.

When he was asked if he could deliver his target, Mr Johnson said: "It is going to be difficult but that doesn't mean we shouldn't try and we will try very hard. I'm determined to keep going and I see no reason to junk the target." He said it was important to continue to invest in infrastructure and for the Government to not cut funding for Tube upgrades.

He said: "We've got to have confidence and look at the ways this city can come out of this situation. It is my deep belief that not only will London come through but if we give Londoners the skills they will show they can adapt and grow and ensure by their efforts and ingenuity that London emerges from the downturn as the greatest city on earth."

His comments came as it emerged town halls are facing a £6billion fall in contributions from developers who are halting work and renegotiating plans.

Income from deals that see councils giving planning permission in return for contributions will fall by about two thirds, consultants EC Harris said. Developers are renegotiating reductions of up to 50 per cent on existing planning consents. MPs on the Commons communities and local government committee are expected to warn today that the Government is unlikely to meet its housing targets.

The figure of three million new homes by 2020 has been made entirely unachievable by the credit crunch, the committee was expected to conclude.

It would require the number of new homes built each year to reach 240,000 by 2016. But the figure for last year was just under 107,000, 47 per cent lower than the 200,697 homes started in 2007. But the committee concluded: "We strongly advocate retention of those targets because they continue to reflect levels of need and demand."

The all-party committee also urged the Government to consider sanctions against lenders who repossess too quickly and to give more protection from unscrupulous landlords.