A sweeping overhaul of planning rules to trigger the building of many more affordable homes will be announced by the government this week as it confronts the economic and social legacy of 14 years of Conservative rule.

Deputy prime minister Angela Rayner will unveil a new National Planning Policy Framework to MPs on Tuesday before they depart for the summer recess in a move that will strengthen requirements for far higher numbers of affordable homes to be built in areas of need, starting this autumn.

Writing for the Observer before the announcement, Rayner says that since entering government ministers have found a “frankly scandalous legacy” lurking “under each stone we lift”.

She says that with so many people struggling to find a home or roof over their head “delivering social and affordable houses at scale” is her “No 1 priority”.

“We simply do not have enough homes,” she writes. “In the death throes of the clapped-out Conservative government, they gave up on governing and compounded their housing failure. In the first three months of this year, work started on 41% fewer homes compared to the same period in 2023.”

Rayner’s move will follow an announcement on Monday by the chancellor, Rachel Reeves, of the results of a Treasury audit of Labour’s spending inheritance.

Preparing the public for hard choices ahead – on spending and taxation – Reeves is expected to reveal a higher than expected “black hole” of about £20bn between expenditure and receipts.

A government spokesperson said the audit had shown “the previous government made significant funding commitments for this financial year without knowing where the money would come from”.

The spokesperson added: “The assessment will show that Britain is broke and broken – revealing the mess that populist politics has made of the economy and public services.”

Keir Starmer and his ministers will continue to blame the last government for a range of decisions they are preparing to make during the coming months that will prove controversial and unpopular, including some likely tax rises in an autumn budget, as well as tight spending restraint.

Last week, Starmer suffered his first Labour rebellion over his refusal to end the two-child limit on benefits, which led to him suspending the whip for six months from seven of his MPs.

On Saturday, the Financial Times reported that Reeves was set to delay a number of unfunded road and hospital building schemes. There is speculation that she could pull the plug on a proposed £1.7bn road tunnel under Stonehenge, as well as the 14-mile Lower Thames Crossing, a road and tunnel under the river that is projected to cost £9bn.

But ministers are also ready to set out on what they insist is an urgent need to begin repairing public services and start generating economic activity.

Unlike the Tory-Liberal Democrat coalition, which embarked on a period of blanket austerity across the state, Reeves is expected to agree to an above-inflation pay settlement for millions of public service workers, including teachers and NHS staff. Pay bodies representing the groups have recommended increases understood to be about 5%, which ministers are indicating could be met in full to prevent more damaging and costly strikes.

Increasing housebuilding by ending blockages in the planning system is seen as a way to begin generating economic growth and addressing a growing crisis of supply and affordability.

Sources close to Rayner, who was brought up in a council home in Stockport, said she was laser-focused on delivering more social housing. There are 4m households in the social rented sector, but nearly 1.3m households on social housing waiting lists.

During Labour’s 13 years of ­government between 1997 and 2010, there were nearly 363,000 new social rent homes delivered compared with just over 171,000 in the 13 years of Conservative rule between 2010 and 2023 – and of these 45% (more than 77,000) were delivered in the first two years, meaning they were likely to have been the results of the affordable homes programme put in place by the preceding Labour government.

Jeremy Hunt, the shadow chancellor, said Labour’s claims that they had suddenly found the public finances in such a terrible state were entirely bogus.

“Since we established the OBR [Office for Budget Responsibility] in 2010, the books have been wide open and what they show is a healthy, growing economy – not the fiction Labour is now peddling, which is widely rejected by independent commentators.

“Their motive is clear: having promised not to raise taxes 50 times before the election, they now need a pretext, but trying to scam the British people so soon after being elected is a high-risk strategy doomed to fail.”

Rayner makes clear she will take on Tory opponents of more housing.

“This Labour government isn’t afraid of making hard decisions in the national interest to power growth in every part of the country. We were elected on a mandate to build the homes that Britain needs and take the tough choices to unblock the planning system and make it a reality. When it comes to housebuilding, we will no longer be asking ‘if’, but ‘how’.

“Delivering social and affordable houses at scale is not only my No 1 priority to ensure everyone has a secure roof over their head. But it is also a crucial step on the path to 1.5m homes, kickstarting the sector out of this slump. That’s why we will take action to inject confidence and certainty into the social housing system, so that councils and private providers can get back to building.

“Local leaders who know their areas best will be key to helping us deliver on these bold ambitions.

We will therefore work with local government to plan new housing in the best possible places, with the supporting infrastructure, public services and green spaces residents need.

“We will also make brownfield development our first priority and make sure that a green belt established in the middle of the 20th century works properly for the 21st.”