Small-scale developers will no longer have to compensate communities for the extra pressure their new homes will place on schools and leisure facilities, under new rules announced by central government.

As a result there will be fewer play parks, games areas and outdoor gyms built in places like Sidmouth and Ottery St Mary.

Until recently, anyone wanting to build an estate of new homes had to make a ‘section 106’ contribution.

The level of this was on a sliding scale, pegged to the number of homes, and has recently funded projects including outdoor gyms and a skate park in the two towns.

But the new law, which came in earlier this month, means that East Devon District Council (EDDC) can no longer collect from developments of less then 10 homes in Sidmouth and six units in ‘rural’ settlements like Ottery.

This could lead to developers side-stepping their responsibilities by applying to build lots of smaller developments instead of one big one. Some estates could end up having no facilities for recreation whatsoever.

Councillor Helen Parr, chairman of EDDC’s planning committee, said: “We expect this change to result in a significant loss of funding for infrastructure in our communities while developments that place extra demands on infrastructure will continue to be built.

“Unfortunately there is very little we can do about this change since the strong objections that we voiced during the consultation on this matter have not been heeded.”

The Government says the changes will reduce the financial burden on small-scale developments and encourage builders to get building.

The new guidance will affect every planning authority across the country.

A spokesman for EDDC said: “The district council’s planning teams are now checking all live applications that fit the profile of the new guidance and, where appropriate, will be removing the requirement for contributions towards open space facilities.

“The council does not propose to re-consult on these changes since it has no power to oppose them.”