Wringing more housing and jobs out of the Town Planning system

 

The Current System

The Government are intent on speeding up the planning system to get more houses built and investment by businesses. The current system is simple enough in theory. In practice it isn't. Every Local Authority in England with town planning powers should have a Local Plan that sets out land use and related policies on transport, utilities, drainage environment etc. This is based on an extensive process of research, analysis and consultation. In practice not all areas have a Plan and in others it is out of date by the time it is completed and agreed.  In general, things in the real world move faster than the planning process.

The policies themselves are often either opaque or overly specific so a lot of detail needs to be negotiated at the scheme application stage. This can be very time consuming and it doesn't help that the planners usually don't trust developers, with good reason.  After all that, the final decision is still subject to serendipitous politics. 

Individual applications for planning permission are checked to ensure they accord with the Plan or if not, there is a very good reason. Decisions are made by elected local councillors and on major schemes are informed by further consultation with concerned agencies and the public. Note that consultation does not imply that local people play a part in making the actual decisions. You get the opportunity to shout but no guarantee that your views will count. If the application is refused, there is a long-winded and expensive process of appeal which can (but rarely does) end up on a Minister's desk.

Overall, the system pleases almost nobody. In trying to get the widest possible acceptance of a proposal, it is neither efficient, effective or democratic, partly because these three objectives conflict and difficult issues are as often dodged as dealt with.

What is proposed seems to be a decision to turn away from participative local democracy towards effectiveness in order to achieve central government priorities. There has been no serious debate about alternative ways of achieving this. My view, which I will expand on later, is that a better result would be obtained by public ownership of land intended for significant development. This is often considered radical in the UK but is used without trauma elsewhere.

In what follows I summarise the proposed changes, briefly consider the advantages and disadvantages and then give a personal view of the balance and the alternative. This argument is based on my experience of virtually every part of this process, but isn't a rigorous analysis simply because that would be boring to read and I have already written too many ‘consultancy’ reports in my time.

The proposed changes

More consultation at plan stage

The Government's view (probably correct) is that the local government system in England is a mess and that delays are inevitable given the complexity of the system and local councils putting local and sometimes even personal priorities above wider regional and national ones. 

Key actors are:

• The officers who manage the appraisal process and advise the Councillors. They are often knowledgeable but lack discretion and flexibility. The job is often bureaucratic and frustrating.

• Councillors who are often technically ill-equipped to deal with complexities, have their own hobby horses and sometimes want to ignore their own Local Plan and make ad hoc decisions reflecting political or other interests.

• Service providers (education, health etc) who if they have thought about the impact of a new scheme at all often cannot distinguish between ‘must haves’ and ‘like to haves’.

• Utilities who have their own investment plans that do not match those of the planning authority or developer.

• The public, who have to be given the opportunity to have their say because we are a democracy, aren't we? In practice, the public often turns out to be a few vocal individuals with a personal agenda.

Again, no clear pattern. It’s a mess.

The Government’s Various Proposals

On District Councils

The Government believes that surgery is needed to improve the bodged organisation of local government. This time around that means scrapping some district councils to create larger bodies, more of which will be led by elected mayors.

On scheme approvals

The acceptability of schemes should be determined as far as possible by the plan-making process rather than by detailed analyses of the scheme application. So to a greater extent, if the plan says your land is allocated as a nuclear dump, a nuclear dump is what you will get. There will be limited chance to row back once the planning application is submitted for the dump.

Targets

Local Authorities used to have targets for housebuilding. The Tories abolished these in a genuflection to their nimby voters. The government wants to restore them.

Staffing

The Government is continuing the clamp on Local Government spending that covers, among many things, the employment of planning officers. It is hard to know what effect the other changes might have on the need for planning staff to rev up the approvals process. What is clear is that there are far fewer planners than there used to be, that this has contributed to delays and that the government's remedy for this is homepathic, they budgeted for an extra few hundred jobs to replace the thousands cut.

Who has a stake in all this?

Locals

For people next to a proposed scheme this is straightforward enough. The main issue is that people hallucinate ‘rights’ that they do not actually have, in planning law at least. It is more difficult where those claiming to be affected are further afield, but larger schemes often have an impact beyond their immediate environs, for instance by decreasing the overall amount of open space. In both cases, concern about any negative impact on their house prices is common, the questionable implication being that these should be a legitimate concern of the system. Others include access to amenities, sound pollution, light, and the substitution of landscaped open space for natural greenery.

Developers

Developers often seem to think that the planning system should underpin their ability to earn at least a normal level of profit from a scheme. This comes across strongly in planning appeals. But what is a normal profit if not a reward for taking the risk of not making a profit? And very often developers struggle to make a profit because they overpay to buy land in a competitive market. The benefit thus goes to the over-compensated landowner while the burden lies with local councils in the form of lower than planned levels of social housing or infrastructure.

Others

Bats? Newts? Owls?

What is right with the proposals.

Rationalising the structure of Local Government should lead to opportunities to streamline the planning process as a whole. Elected mayors might provide a more focused response to major conflicts and problems. Focusing consultation on the plan-making rather than scheme-approval part of the process could reduce both the scope and time taken over the latter.

Note the 'should' and 'could'. No guarantees.

What is wrong with the proposals

I can’t be sure but suspect that The Local Plan and the process of creating it will probably become even more complex in order to deal with matters that might previously have been dealt with at the scheme approval stage. Are the existing Plans up to the job? Not the ones I have seen! And if you make them more responsive to potential individual proposals, then the amount of analysis and time it takes to resolve disagreements between stakeholders will increase. I bet this doesn’t happen within the life of this Government.

Many members of the public and also councillors and service providers do not have the skills, resources or time to deal with the more nebulous policy issues embodied in the increasingly important and 'evidence-based' Local Plans. I will go into detail on this below but the key issue here is that fine-grained neighbourhood-level involvement in decision making and in neighbourhood plan making, must surely suffer.

There is an important financial issue. Local development is supposed to provide funding for supporting local services, amenities and things like affordable housing. If these contributions are settled at the plan-making stage and in the context of adventurous targets for housebuilding in particular, developer contributions will presumably have to be set at a 'lowest common denominator' level. This will impact the funds available to provide those local 'must haves', with the burden falling on the public purse. And 'nice to haves' will be rare. That contribution to the town centre improvements? Forget it.

Why can’t people participate at the plan-making stage?

They can of course and will be encouraged to do so. To be effective, they will need to have some knowledge of planning law, the funding and organisation of public service provision, environmental policy and science, engineering and an ability to discern from a two-dimensional plan what the three-dimensional reality might be like. (Actually, make that four dimensions, because they will need to grasp the implications of timing issues such as leaving flood protection works until later or building the houses before the schools or transport connections etc).

'Typical' Brochure 

What is clear is that reality rarely corresponds to the planner's brochures and architects' drawings of a verdant and vibrant urban arcadia inhabited by immaculately coiffured young people with gleaming white teeth and joyful children. And presumably enjoying great local transport, jobs and houses.

First, Buy a Helicopter.....

Is There An Alternative?

Mine has few friends, but here it is anyway.

The people who deliver all this ‘on the ground’ are the developers. They usually (but not always) buy the land they need in a competitive market where the path to success lies in paying more for a site than other bidders think it is worth. Odds on they are right. This is the 'winner's curse'.  

The suited and booted developer faces a dilemma. If he overpays for the land he is in danger of making a loss which will crystallise sometime in the future. Maybe he will lose his job. If he doesn’t overpay, he will have no land to develop and might be out of a job much sooner.

His interest is in opting for the latter in which case he has two possible ‘get out of jail free’ cards. Either fate (in the shape of rising house prices perhaps) might bail him out or (almost inevitably) he will plead and wail for a reduction in the planning requirements, maybe by welching on promises or cutting affordable housing. Odds he goes for the second and hopes for the first.

It needs to be understood that the price of land, especially in areas with plenty of good jobs, is a substantial cost. But the type of land needed for housebuilding tends to be either ‘grey’ or ‘green’ field. In both cases the value of that land in its current (un)use is negligible. Poor farmland might be worth £10k acre for farming but might be £1m acre for housing. What makes land suitable for housing? Often it is the granting of permission, and the provision of connections and roads, all paid for from the public purse and the landowner has done nothing to earn his bounty,

Why should the landowner get all the benefit from this by holding the local authorities hostage while they try to meet their housing targets? This is not a new argument. Winston Churchill made it in the early 1900’s. Harold Wilson's government attempted to address it in 1975 but their scheme to remedy it was hopelessly under-resourced to the extent that it was withdrawn. 

And why shouldn't public bodies have the right to buy land at something close to its value in its existing use and then use the uplift in value created when it is put to a new use, to pay for the necessary infrastructure and affordable housing? 

Both Germany and the Netherlands have planning systems that give municipalities pre-emption rights to buy development land at its value in its current use. They can then sell it on for a new use, with the uplift in value used to pay for all of the necessary infrastructure. Why don’t we do that now? We have done it in the past, the New Towns Development Corporations built places all over the UK that way. Milton Keynes is perhaps the classic example. 

Milton Keynes

I believe that part of the answer lies in a shift from a pragmatic to an ideological view of how land should be developed and that this in turn reflects a  fetish about private property in modern Britain, where ownership rights seem to be treated as divinely bestowed. My rather more contentious belief is that this goes back to English politics in the the Middle Ages. The ‘rights of free-born Englishmen’ etc. That might be a story for another post. For now, I wonder how many people realise that a freehold title to land doesn’t mean that you own it, merely that you have a restricted right to use it in perpetuity. The actual owner of all land in the UK is the Crown.

The Ultimate Landlord

In short, our problems seem to be largely self-inflicted but exacerbated by a complex and time-consuming planning system. I am not against the current Government proposals but think it should be openly acknowledged that speeding up the process will probably be achieved at the expense of the means for ordinary people to influence decisions on specific projects which goes further than simply side-lining nimbies. But it isn't obvious to me that the current system offers much more than a gesture to grass roots democracy anyway. The current inability to harvest the full value added to land by allowing a change in its use and providing access and services hurts rather more because this impacts directly on the ability to develop land with proper services, good open space and in accordance with wider affordability and other objectives; with as little demand as possible on the taxpayer.