OSBORNE builder

If localism rules, not enough homes will be built.  If enough homes are built, localism won’t rule.

This is the steel trap from which the last Government struggled to escape.  Its first Planning Minister believed that he had found an ingenious solution.  To describe it very crudely indeed, you might call it Pay to Build.  Local councils that agreed to provide more houses would be funded by central government to do so.  That way, localism might be compromised, but it would not be abandoned.  And while housebuilding might not soar to Macmillan-era levels – the old maestro drove the building of about 300,000 a year – it would tick along nicely enough to raise home ownership rates.

That Planning Minister was Greg Clark, now returned as CLG Secretary to head the department in which he served – only, we read this morning, to preside over the bonfire of the system he so painstakingly built.  “George Osborne will today order sweeping reforms of the planning system to fast-track the construction of more than 500,000 homes,” today’s Daily Mail reports.  The paper has zeroed in on the housing part of today’s productivity announcement, which a source describes as “the second half of the budget”.  On Wednesday, the Chancellor ordered firms to pay workers higher wages.  Today, he is ordering councils to build more homes – or at least preparing to do so.

As the Mail describes it, there are three main elements to the plan.  First, there will be a relaxation of requirements on building and adaptations: the paper points to a trial scheme that will allow householders to add up to two extra storeys to their homes without needing planning permission.  Second, building on brownfield sites will be speeded up, with ‘automatic planning permission’ for projects and the Government itself seizing long-unused plots for housing development.  Finally, ‘large housing schemes will bypass the local planning system altogether, with approval given by ministers’.  The present restrictions on Green Built building will stay.

Even so, such a tearing-up of the planning system will be searingly controversial – provoking a far bigger fracas than the Budget’s minimum wage announcement (against which a backlash is already building).  The Daily Telegraph will go nuts.  So will some Conservative backbenchers.  It is worth bearing in mind that early reports may not be completely accurate.  Sources that ConservativeHome has spoken to describe a settlement whereby local neighbourhoods will choose from a menu of housing providers, rather than having developments foisted on them by the local council.  But the bottom line is that this choice will be made on compulsion.  Osborne is determined to build, build, build.

What is going on?  The key is housebuilding levels.  CLG sources are confident that these will get up to 200,000 a year during the course of this Parliament.  Others that this site has quizzed are more sceptical.  They claim that the real figure is lower, and that in any event there is a mismatch between where homes are needed and where they are being built.  Certainly, the rate of home ownership continues to fall: it is now at its lowest level for almost 30 years.  This is a catastrophe on a national scale, especially for Britain’s young people.  As we wrote in the ConservativeHome Manifesto, “a downtrodden working class blossomed into a mass middle class with property, prospects and a stake in the future” during the last century.  The key to this progress was home ownership.

One has to hand it to the Chancellor.  He wants to succeed David Cameron as Party leader and Prime Minister.  And there is no subject more politically sensitive than housing, at least on the Tory benches and among local Associations, with the possible exception of health.  Yet here he is – prepared for a bare-knuckled fight with both.  There is no explanation other than his conviction that the economy must grow and people should have homes: no political upside, no angle from which, in his Disraelian way, he can screw the opposition.  With its cutting-off of housing benefit, lower minimum wage and student grant reductions, the Budget was framed by its critics as anti-young people.  It should be put on the record that, at least as far as housing is concerned, Osborne is fighting their corner.

This is not to say that his plan is right.  In our manifesto, we suggested a Clark-type means of escaping the housing trap.  The core of it was ending the cycle whereby each dash to build ends with more buy-to-let.  There was a building boom of sorts from 2001 to 2007 – but one in which home ownership and lending to first-time buyers fell, while house prices and buy-to-let mortgages shot up.  Furthermore, the whole of the increase in the rate of house building was in the form of flats and not the houses with gardens that most families want.  This is why we proposed giving local authorities the power to restrict the sale of new homes other than to homeowners, higher taxes on professional property investment, and switching support from the demand side of housing to supply.

This would mean, for example, central government funding local authorities, housing associations and other registered social landlords to build new homes for ownership.  Above all, the planning system should be community-led.  This part of what we outined sounds close to the version of the Government’s plan described to us in one important respect.  Under its terms, neighbourhoods would be able to say no to developers of shoddy housing – we build the smallest homes in Europe – and select from that menu of other providers: the housebuilding equivalents of Nick Boys-Smith’s Create Streets, for example, who could build the kind of terraced streets and houses that people would want to live in.

The Osborne scheme will work best if it proceeds along these lines.  Heavy reliance on the Planning Inspectorate has been a problem with the present system.  Central Government has used it to get tough with local plans and leverage the building of more homes.  But this is all the wrong way round.  Too often, Government has treated what should be its friends (local people and backbench MPs) as though they were enemies, or at least obstacles in the way of progress, and its enemies – or at least bureaucrats – as its friends: that’s to say, the planning-plus-developer nexus which is a British equivalent of Eisenhower’s military-industrial complex.

But there is a problem at the heart of the new housing plan.  The rock on which it is founded seems to be compulsion.  This fits ill with a softly-softly approach to local people and communities.  The way the plan has been briefed to the Mail is more consistent with Osborne simply sending in the bulldozers.  This would be all of a piece with traditional Treasury culture: since the department has minimal contact with voters, it can afford to be magnificently impervious to their concerns.  Other departments are not so lucky.  Clark must take legislative charge of this tearing-up of his handiwork.  Sajid Javid is out in front today – or is that in the firing line? – leading on the plan as part of the productivity package.

“Homes, jobs, savings,” our masthead proclaims.  The big-scale developments that Osborne wants to drive through will be Garden Towns or Garden Cities – in a previous Budget, he made a lot of the development in Ebbsfleet – which ConservativeHome has always been very keen on.  We support the Chancellor’s ends and salute his courage.  But the means look dicey, both in political terms and policy ones – with another splurge of new buy-to-let rather than more family-owned homes. Where we wanted a key to unpick a lock, the Government seems to be squaring up to take a sledgehammer to a nut.

If localism rules, not enough homes will be built.  If enough homes are built, localism won’t rule.

Get out of that one.

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