Clean up your own backyard

The Labour party promised an overhaul of the planning system at the party’s conference in Liverpool in October. While the detail is still lacking, it seems clear that housing and planning policy in general has become a key election battleground.

Labour pledged to ‘get Britain building again’, with a ‘transformational package of reforms to the planning system’ to tackle the country’s housing crisis by building 1.5m new homes.

New towns, with new communities and a package of devolution to mayors with stronger powers over planning and control over housing investment, have all been promised by Labour, along with a fresh approach to urban brownfield development.

The planning community has dealt with a rollercoaster of reforms and U-turns under the current Conservative government. Seeing planning so high on the political agenda for both parties is, if nothing else, an encouraging sign. The planning community has been working in a system that is buckling under the weight of backlogs and delays.

‘This will be welcome news to a sector where the last year of uncertainty, rising inflation and interest rates, as well as the near collapse of local plans mean that planning applications for housing developments have fallen to a record low,’ notes Irwin Mitchell partner Claire Petricca-Riding.

The root causes of many of the current problems are plentiful. The Localism Act 2011, from the coalition government, was intended to decentralise planning decisions. The National Planning Policy Framework (NPPF), first published in 2012, introduced local plans. These set out the vision and a framework for the future development of an area.

Local plans have, however, become notoriously difficult to adopt, with planners putting this difficulty down to the duty to co-operate, which replaced regional spatial strategies.

In a 2022 blog Irwin Mitchell partner Nicola Gooch noted that ‘while regional spatial strategies were unpopular, they did provide a crucial forum for dealing with strategic planning issues – such as balancing unmet housing need across a region or delivering major infrastructure projects.

‘The duty to cooperate has spectacularly failed as a mechanism for dealing with strategic issues,’ she added. ‘In addition to spawning a plethora of case law, failing to effectively comply with the duty has been the death of a great many local plans. Just in my own back yard, failures to comply with the duty to cooperate have doomed the plans of Wealden, Sevenoaks and Tonbridge & Malling.’

The lack of local plans in a plan-led system means that most planning applications go to appeal, slowing the progress of most developments.

Much-needed breathing space

A promise to ‘level up’ the country was a core element of the Conservative 2019 manifesto. Numerous iterations of planning policy came in its wake. The 2020 planning white paper, Planning for the Future, set out proposals for the fundamental overhaul of the planning system. Lawyers spent hours poring over its detail, only to be told around two years later that the government would not be providing a response to the consultation.

The Levelling Up white paper followed and then the Levelling-Up and Regeneration Bill (LURB), in May 2022. Its aims include empowering local communities to have a say in local development, as well as a tighter enforcement regime to deal with slow build-out as well as ‘land-banking’ by developers. The act received royal assent in October.

Following a period of political turmoil in 2022, Michael Gove was reinstated as secretary of state for levelling up, housing and communities in October. He reaffirmed the government’s commitment to levelling up.

In December the government launched the consultation for a revised version of the NPPF. While the consultation closed in March, and received 26,000 responses, the government has yet to publish the consultation outcome.

'Since last November there have been 11 planning-related consultations. We’ve only had responses on two of them. The constant consultation that the government is putting forward is giving me whiplash'

Nicola Gooch, Irwin Mitchell

According to Planning Resource, as of early September, 30 local planning authorities had paused or delayed work on their local plans, or withdrawn them entirely, this calendar year. Some 15 cited the government’s proposed changes to national planning policy.

In its seventh report (session 2022-23), published in July, the Levelling Up, Housing and Communities Commons select committee noted that the ‘start-stop’ nature of planning reform over several years has ‘regrettably resulted in uncertainty among local authorities and across the planning sector’.

The committee went on to recommend pausing plans for further reform ‘in order to allow for a period of stability in which reforms already introduced can be property implemented, and any lessons from that implementation learned’.

‘A new Labour government would give me some breathing space,’ says Gooch, speaking to the Gazette. ‘Since last November there have been 11 planning-related consultations. We’ve only had responses on two of them. The constant consultation that the government is putting forward is giving me whiplash. Trying to advise clients and second-guess the direction of travel has been quite chaotic. A sense of vision and direction of where we are going would be a relief.’

Land-banking

The issue of land-banking was also addressed in Labour’s proposed reforms. According to Investors’ Chronicle analysis, the FTSE 350 housebuilders’ land holdings have soared 67% since 2013. It is alleged that housebuilders do not build out land for fear of falling prices.

The Competition and Markets Authority announced in August that it would be investigating the practice, as part of a wider housebuilding investigation. The government introduced provisions to the LURB to impose fines on developers who build out too slowly, as well as measures to encourage the completion of developments.

Planners nonetheless remain sceptical about whether land-banking is the real problem. ‘The idea that developers buy large swathes of land, get planning permission and then deliberately don’t build is nonsense,’ says Gooch.

Housebuilding: way off target

Housebuilding targets have been a subject of constant change and debate. In its 2019 manifesto, the Conservative party set out a housing target of 300,000 homes a year by the mid-2020s. To date, yearly targets have fallen short, with an average of 178,228 new dwellings built over the last 10 years.

Further confusion was caused by Gove’s dilution of these targets to be ‘advisory’ only. The select committee notes: ‘The government has not provided sufficient evidence to demonstrate how the policy of removing local housing targets will directly lead to more housebuilding.’ It went on to voice scepticism over the minister for housing and planning Rachel Maclean MP’s ‘confidence that greater local plan coverage will result in more housebuilding’.

Labour’s promised target of 1.5m new homes in five years amounts to the same yearly target, the only difference being it will become mandatory. But how this is to be achieved is unclear, other than by ‘ignoring’ objections from local communities, and a promise by Keir Starmer to ‘bulldoze’ through a restricted planning system.

50 shades of green

Tied to the housing issue is the question of green belt boundaries.

Referencing the government’s proposals to amend the NPPF to remove the requirement for local authorities to review and alter green belt boundaries, the select committee’s recent report noted that ‘considerable misunderstanding’ remains about the purpose and function of green belt, which is often conflated with green fields. It reaffirmed its previous recommendation that a national review of the purpose of the green belt should assess the circumstances in which brownfield sites within the green belt should be considered for development, and that local green belt boundary reviews should continue to be conducted as part of local authorities’ plan-making process.

In this context, Labour’s pledge for a ‘planning passport’ for urban brownfield development, with fast-track approval, has been broadly welcomed, although whether building on green belt will resolve the housing crisis is contested.

Speaking at the Labour party conference, Starmer referenced the removal of any disused car parks and ‘dreary wasteland’, collectively known as the ‘grey belt’, from the current green belt in order to enable further housebuilding.

‘The fact that [Labour] are willing to have a grown-up conversation about the green belt is a big thing,’ says Gooch. ‘And the fact that they are committing to an ambitious housebuilding target gives a statement of intent.’

Resourcing issues

Past political squeamishness about development on the green belt does not fully account for the failure to build enough housing. Under-resourcing of local authority planning departments remains a major obstacle to development. Earlier in the year, the present government proposed an increase in planning application fees of 35%, which was widely welcomed.

‘Any appeal scheme you care to name, politics and under-resourcing gets in the way,’ says Clare Fielding, managing partner at Town Legal, London. ‘Something that broadly complies with a development plan can take years to process, because workloads are too high and planning officers move around all the time. Their working conditions and their salaries are poor.’

'The government consulted on increasing planning fees and ring-fencing them to fund planners, and we all supported that. In the outcome, it decided to increase planning fees anyway, but they weren’t going to ringfence them'

Clare Fielding, Town Legal

Shadow chancellor Rachel Reeves told Labour’s conference a Labour government would fund 300 new planning officer roles within local planning authorities; ; a welcome pledge, but not enough to fix a broken system or make a real difference to the delivery of schemes.

‘The government consulted on increasing planning fees and ring fencing them to fund planners, and we all supported that,’ notes Fielding. ‘In the outcome, it decided to increase planning fees anyway, but they weren’t going to ringfence them.’

Other changes promised by Labour include powers to be given to local leaders to ‘stand up to vested interests in building new developments, through a specialist government Take Back Control Unit’, said shadow secretary of state for levelling up, housing and communities Angela Rayner, as she underlined the party’s commitment to social and affordable housing.

'Labour’s announcements on planning reform are aspirational, but lack some of the detail needed to fully appreciate how they would be actioned, the time needed to do this, and the overall impact they could have on the planning system'

Robert Gowing, Hogan Lovells

Section 106 agreements tie developers to commitments to affordable and social housing as well as local infrastructure. Rayner noted that through the new unit there would be an upskilling of local authorities’ section 106 negotiations to ‘prevent developers from wriggling out of their responsibilities’.

The devil, of course, is in the detail. Robert Gowing, senior associate at Hogan Lovells, notes: ‘Labour’s recent announcements on planning reform are aspirational, but again lack some of the detail needed to fully appreciate how they would be actioned, the time needed to do this, and the overall impact they could have on the planning system.’  

And even if obstacles in the planning system can be overcome, one of the biggest challenges to the development sector has yet to be addressed. A shortage of labour and materials means that the cost of building homes has risen faster than their sale price, putting the viability of many schemes at risk.

Nonetheless, planners remain optimistic. The LURB received royal assent at the end of October. LURB, notes Gooch, is a massive achievement and ‘has the potential to significantly reshape our planning system in the months to come’. Not least because the Department for Levelling Up, Housing and Communities promised a long-awaited response to the NPPF consultation once the bill received royal assent.

One thing is now clear, Gooch concludes. Housing delivery is now ‘about as political as it comes’.

 

Maria Shahid is a freelance journalist