THE Government has been accused of neglecting the needs of 13 million people who live and work in the countryside - with the Yorkshire Dales held up as a worrying example of the crisis.

The Country Land and Business Association launched its Housing the Rural Economy report to more than 120 MPs, peers and representatives from countryside and housing organisations on Wednesday.

It says the Government's withdrawal of local authority special housing grant will mean an even greater shortage of affordable housing for rural dwellers and workers.

Dorothy Fairburn, the association's Yorkshire regional director, said the financial hole left would more than cancel out the increase in the Housing Corporation's approved development programme.

The proposed withdrawal of the exception site policy, which allows affordable housing to be built at locations not normally granted planning permission, would restrict smaller housing developments.

Almost a third of homes in the upper dales were second homes or holiday cottages, and 75pc of property sales were to people from outside the area.

"To find the workers it needs, the creamery at Hawes has to bus them in from distant towns because they can not afford to live nearby," she said, echoing the findings of a report last week into the feasibility of a shared equity house buying scheme for the area.

"Farmers are prevented from converting redundant farm buildings into homes, often forcing away the very people on whom a thriving rural economy depends."

Local authorities struggled to meet affordable rural housing targets and large developments on the edges of towns took precedence over small schemes which allowed villages to grow naturally.

"Now the Government is proposing to do away with key planning guidelines and that will only worsen the rural housing crisis, increasing the gap between demand and supply and threatening the economic base of our villages," said Miss Fairburn.

The CLA report, published on Monday, proposes a series of solutions to open up more land and opportunities for countryside housing.

It makes 17 recommendations including:

* a requirement for planning authorities to meet local housing need close to its origins through natural growth of villages;

l more weight to be given to using redundant farm buildings for housing and a change in the definition of brownfield sites to include former agricultural land;

l retention of the exception site policy;

l guidelines on housing provision in settlements of fewer than 3,000 people in greenbelts, national parks and areas of outstanding beauty to mirror the rest of the countryside;

l cash from scrapping council tax discount on second homes to be used by local authorities for affordable rural housing;

l proposals to allow houses to be built for locally-based workers in rural businesses.

Mark Hudson, CLA president, said people would continue to be driven away from rural areas if they could not afford property prices. Local jobs, services and facilities would be put at risk.

"Our recommendations are not a charter for concreting the countryside," he said. "Rather, they are practical proposals to Government, local councils and planners, housing associations and landowners to sustain rural communities and help them to thrive.