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* Government to counter delays in housing projects
* Local authorities face fines if slow on planning
* Launch of new productivity plan follows UK budget (Adds details from plan, reaction from economist, investor)
By William Schomberg
LONDON, July 9 (Reuters) - Britain's government said onFriday it would remove obstacles to building new houses as ittries to tackle a chronic shortage of homes and put its economyon a sounder footing.
At the centre of a new programme to boost Britain's poorproductivity record are powers for the government to step in anddraw up housing plans if local authorities fail to do so.
Town halls that drag their feet on planning decisions may befined, the government said as it moved to reduce the delays forhousing projects that are often caused by local objections.
The plan follows the first government budget since PrimeMinister David Cameron's Conservative Party won nationalelections in May.
Britain's economy has grown strongly over the past two yearsand the number of people in work has hit a record high. Butgrowth in output per worker lags behind that in many otheradvanced countries, posing a threat to the recovery.
"In stark terms, it now takes a worker in the UK five daysto produce what his or her counterparts in Germany can deliverin four," business minister Sajid Javid said.
The new plan brings together existing proposals in areasincluding transport, trade and the devolution of power to citiesand regions. It also focuses on training which critics say lagsfar behind other European countries.
Javid said it was unacceptable that Britain was one of fewadvanced countries where the skills of 16- to 24-year-olds wereno better than those of 55- to 64-year-olds. Finance ministerGeorge Osborne said that in the last 25 years, France had builtmore than 2,500 miles (4,000 km) of motorway while Britain hadbuilt just 300.
But the housing rule changes are the programme'scentrepiece. British house prices have surged in the last twoyears to record highs, pushed up in part by government measuresto make it easier for people to get mortgages.
The government hopes that a nimbler land and housing marketwill make it easier for people to own homes close to their workand give firms more freedom of location.
BROWNFIELD PUSH
Planning permission will be granted automatically forhousing developments on suitable brownfield sites, land formerlyused for industrial or commercial purposes.
"That has really been an ongoing problem for many years inthe UK for the housebuilding side but also for new business,"said John Van Reenen, director of the Centre for EconomicPerformance at the London School of Economics.
The plan was also welcomed by some investors.
"We all know that the UK needs to build masses more homesbut for years all we've had is policies to help ever increasingnumbers of people to buy too few properties," Andrew Allen, headof global property strategy at Aberdeen Asset Management.
"There's plenty of money from investors waiting in the wingsto invest and indeed fund the much-needed residential schemes."
John Hawksworth, chief economist at PwC, said the governmentshould rethink its reluctance to borrow to fund investment andtake advantage of rock-bottom borrowing costs to radicallyimprove housing and transport infrastructure.
"The government could be bolder in this area," he said.
The government said it had hired former Bank of Englanddeputy governor Charles Bean to lead a review of Britishstatistics so productivity can be measured more accurately. (Writing by William Schomberg; Additional reporting by AndyBruce; Editing by Ruth Pitchford)
