A new twist has arrived in the ongoing political ping-pong between Stroud District Council and the Planning Inspectorate in a row which sees a blueprint for 12,500 homes in the south of the county stuck in limbo.

As reported in Punchline-Gloucester.com, SDC has requested that the government's planning inspectors rethink their decision to send the authority's map for the future back to the drawing board.

Back in March, Kathy O'Leary, SDC Chief Executive, issued a letter to the inspectors in which she set out comprehensive reasons for putting the plan on how the district will look in 2040 back on track.

The government's inspectors, she said, had placed the district authority into an inescapable "Catch-22" bind unless they changed their position, which risked damaging the economic prospects for the county's heartland. SDC wants funding for essential motorway junction upgrades, to support the development, to be pinned down in the future, while inspectors from Whitehall say the financials must be assured in advance.

Subsequent to Ms Leary's letter, Prime Minister Sir Keir Starmer was said to be set to make an intervention in the row at the behest of local MPs. In a question raised at a PMQs session by Sir Geoffrey Clifton-Brown, the Prime Minister said: "On the issue he raises, he and my honorable friend the Member for Stroud (Dr Simon Opher) has been working together to try to resolve this issue, as I understand it, and I am happy to ensure that he gets a meeting with the relevant Minister, if that would help in taking it further."

From that, you might expect there to have been some progress, but the latest move from the Planning Inspectorate suggests it won't blink first and that it stands by the verdict that the plan is "flawed".

Inspectors Victoria Lucas and Yvonne Wright, appointed to review the plan, say they stand by the belief that its withdrawal from examination is the most appropriate way forward.

The letter to Ebley Mill said: "To be clear, at no point have we requested or suggested that the necessary funding [for Junctions 12 and 14 of the M5] be immediately available for SDC to spend, or even be definitively confirmed, in advance of the adoption of the plan. Essentially, this issue is, and always has been, about whether there is a reasonable prospect of funding being identified and available to ensure that the necessary infrastructure will be in the right place at the right time to facilitate the delivery of the relevant housing sites."

But they said the identification of funding sources was crucial when considering when the improvements will be needed.

"As we have previously stated, both [J12 and 14] schemes will be required in the early plan period to deliver the housing sites reliant on these infrastructure improvements... In summary, the site allocations reliant on these M5 junction improvement schemes require these junctions to be delivered within the first five years of the plan period."

The scheme would cost between £240m and £330m, the letter said.

"Despite this, no external sources of funding have been identified in relation to either scheme other than the stated intention to approach the central Government in order to lobby for some funding... Clearly considering whether there is a reasonable prospect of this funding being identified within the timescales envisaged is a matter of planning judgement.

"However, due to the lack of significant sources of external funding having been identified at this stage in the examination, we are unable to conclude that there is currently a reasonable prospect that they will be. This is because, as previously stated, applying for significant amounts of external funding takes time."

The Inspectorate's response to Ebley Mill prompted a reaction from the boss of Cheltenham-based McLoughlin Planning, a significant presence in the county's planning issues, in which managing director Nathan McLoughlin said the inspectors were had "channelled their inner Margaret Thatcher (circa 1980) and decided that they were not for turning".

Citing a blog from the leader of SDC which highlighted the heartbreak for families unable to get onto housing lists due to the district's paucity of housing (which now spells a waiting list of 4,000 people), he said that the Inspectorate's ongoing rejection carried lessons that must be learned by the homebuilding industry.

Mr McLoughlin said: "The key reason for the failure of the Plan was its reliance on infrastructure funding for the essential upgrades to J12 and J14, or in Stroud's case, the lack of such funding. The Inspectors' approach to this matter is not simply requiring the money to be in place for the Plan to be found sound. Rather, there has to be evidence to demonstrate a "reasonable prospect" of the monies being available at the right time for the critical infrastructure required. Clearly, a black hole between £230 and £340 million will be problematic."

The impasse sharply focuses on the relationship between allocations and infrastructure, he said, and the need to have "a very clear handle on the infrastructure costs for projects and when they will be required in the Plan period. The larger the allocation, the greater the infrastructure requirements, especially when motorway junctions are involved."

He added: "The Local Plan Review went, to use gambling parlance, "all in" on a handfull of large strategic sites, rather than a more dispersed strategy, where the impact on highway infrastructure would be less. Indeed, Stroud's neighbours in South Gloucestershire are well aware of this and members and officers have made it clear that its emerging Local Plan (which will go to Examination this year) has learnt from the mistakes Stroud has made and propose something more 'deliverable' with a greater focus on smaller allocations which don't necessarily trigger massive infrastructure costs."

Looking ahead, he said Stroud does not have a five-year housing land supply and is "nowhere near being in a position to solve the problem from a Plan-making standpoint. It further underlines a huge opportunity for all involved with housing sites to look seriously at sites that can come forward and be delivered within five years.

"In looking at sites to come forward, I cannot continue to stress enough that it's a question of doing the basics right, ensuring the site is in a sensible location, deliverable, and devoid of genuine constraints. Remember, a lack of a five-year supply does not give succour to those sites that are fundamentally flawed."

Ultimately, he warned any failure of a plan was serious: "We work in a plan-led system where Councils decide where growth can go. The Stroud case (and it's not unique) shows that those decisions are not always the right decisions. But at the heart of any Local Plan is providing homes for people to live in."

● In a statement on the letter, SDC said: "The council is currently reviewing the contents of the response and will provide further updates in due course."