Neil O’Brien is MP for Harborough.
The White Paper on planning is out. Will it solve our housing crisis?
Obviously, reforming planning can only be part of the solution.
For starters, half the issue is about demand, not just supply of new homes. The government can shape demand: limiting immigration, using tax and credit policy to encourage funding to flow into businesses, not property speculation.
Likewise, declining homeownership reflects not just undersupply, but a choice to grow the rented sector with tax advantages. Over the decade to 2016 we added 165,000 privately-owned homes a year. But 195,000 homes were transferred into the private rented sector. So more homes were owned privately but by fewer people. We could use tax to increase homeownership instead.
Even on the supply side, planning’s only part of the picture. The Letwin Review highlighted how developers build out slowly to keep prices up. Page 37 of the White Paper promises: “we will explore further options to support faster build-out”.
So this paper only covers one part of the housing picture.
But it’s still important, and there are four big ideas in it.
Most of them I like, but there are risks.
1) Faster, simpler plan making.
Making a local plan takes seven years on average, involving councils spending loads on consultants drawing up dozens of reports which no-one ever looks at again. With plans up to 500 pages long and supporting documents up to ten times that, we can surely simplify.
The White Paper proposes a time limit on drawing up a plan (30 months) and cutting the number of documents required. Plans will be “two thirds” shorter.
It’s a good idea. The risk is a backlash. The paper notes that having all three of “Strategic Environmental Assessment, Sustainability Appraisal, and Environmental Impact Assessment – can lead to duplication of effort and overly long reports which inhibit transparency and add unnecessary delays.” But making things simpler without annoying conservation-minded voters will require care.
2) Simpler, more useful, developer contributions and (maybe) more benefit for the community.
At present “Section 106” contributions made by developers are opaque, and developers spend yonks arguing the toss over how much they’ll pay. For builders, it’s like an Arabic carpet shop where you waste hours haggling just to find out the price.
But residents also lose out, because crazy rules constrain how funds for the community can be spent: so tightly, money is often returned to the developer.
The White Paper proposes replacing Section 106 and the Community Infrastructure Levy (CIL) – which only half of councils use – with a single, simpler levy. A welcome part of the proposal is that 25 per cent of revenues will stay in the parish they are raised in.
In principle, it’s great. But the detail is key. The paper is ambiguous about whether the new levy should raise more overall. It should: my constituents are driven mad seeing developers making massive windfall profits while dumping onto taxpayers the cost of the necessary infrastructure for new homes.
The paper proposes setting a minimum amount of the levy to be spent on affordable housing. I don’t agree. Councils should be able to choose for themselves whether they want more social housing, or to spend more on new schools, bypasses or superfast broadband instead.
The paper’s lead option is to create a single, nationally-set levy, with one rate for the whole country. Simple, but that would create big winners and losers. The paper keeps open the option of a single levy, but councils still setting their own rate (which sounds more sensible).
Extending the levy to homes created through change of use is questionable: do we want to tax brownfield regeneration?
3) Simpler, faster assessment of need.
Presently, councils spend ages and pots of cash working out how many homes they need to plan for. Because of the difficult politics and risk of legal challenge, they hire a bunch of expensive consultants (them again) who basically take the ONS population forecast for the area, stick their finger in the air, do some magic, add and subtract a bit for various local factors and… often end up back where they started, around the ONS population forecast.
The White Paper proposes a more standardised formula which will spit out a target number based on population growth, up-weighted for things like demand, but down-weighted for various local constraints like greenbelt.
It’s a bold move, as lots of councils and MPs will argue with whatever figures the national formula spits out for them. The actual formula will be key to whether it succeeds or leads to a backlash: I’ve argued before for increasing the numbers in inner urban areas for environmental reasons and deliverability. It might be wise to have a bit of flexibility as a safety valve to let councils propose their own approaches: some will always have idiosyncratic factors which aren’t in the national formula.
The most novel idea in the paper, “zoning”, is the one that I’m most unsure about. Zoning is common around the world, but means very different things in different countries. Page 25 of the paper proposes a wide range of options.
The basic idea is that sites put in the local plan for development will be taken to have outline planning permission. Many councils say this is unnecessary: they don’t refuse planning permission on sites they’ve put in their plans.
Some campaigners, in contrast, take this as signalling the start of a planning “free for all”. But the paper is clear that councils will be able to set, for each site, outline controls over things like the heights and density of buildings.
My concern is that because it will be harder to say yes or no to a specific design, councils may feel they just have to set more prescriptive rules upfront to control development.
In my experience as a constituency MP, as much of the concern about new homes is driven by (legitimate) concerns about flooding, parking, traffic and construction as the actual new homes. Limiting councils’ discretion in some ways, but not in others, could lead to a lot of fuss for little real change.
The lead option in the paper creates a new middle category of “renewal” areas, where development is not approved or forbidden, but there is a statutory presumption for things like densification. Gentle densification can be good, but I’m sceptical such changes can be waved through in principle, rather than looking case by case.
There are some underplayed aspects of the paper. It notes that 50 per cent of councils don’t have a plan, but doesn’t say much new about handling councils that won’t adopt one. It’s silent on how large developers lock out small builders through opaque land optioning.
More than anything I would welcome more consideration of the underlying reasons why voters oppose new development: that we build piecemeal, on the kind of infill sites on the edges of villages and towns that most annoy people. That we combine some of the least dense cities in Europe and the most geographically unbalanced economy. The housing problem can’t be solved in isolation, and we need a vision of where we are to build, not just a formula.
The White Paper is a radical document. There are some great things in it, but it contains some ideas that need a lot of thought and careful handling.