Planning – Insults vs Consultation

It’s worth reading Fiona Reynolds of the National Trust in the Telegraph this weekend. The Government seems to be misjudging the growing pressure wave of resistance to the proposed changes in the National Planning Policy Framework (NPPF). That the wave broke in the slow news weeks either side of the bank holiday is perhaps unsurprising but if I were in Government I would be manoeuvring to get myself into a place where I was seen to be in listening (rather than U-turning) mode.

This has all the hallmarks of a massive popular uprising of Middle England to protect their green and pleasant land. It could make the backlash against greedy bankers look like the vicar’s tea party.

The current lack of rational debate is very frustrating. The National Trust seems pretty rational though the presentation of their arguments is necessarily simplistic. Some of the mud being thrown back at them and the growing alliance of heavyweight environmental organisations is decidedly unconstructive and gives the property development industry in particular an even worse name than it already has.

Greg Clark picked up a weakness in the National Trust case on Channel 4 news. The ‘Brownfield First’ policy advocated by the Trust has never been a particularly good one (previously developed land can be in the most unsustainable of locations and should be turned back to natural uses in some cases while some undeveloped sites can present good cases for sustainable development).

Not that the NPPF does advocate brownfield first as Greg Clark claimed. The now infamous para 165 seeks only that lower environmental quality land is developed first (we all know that derelict sites can often be of higher biodiversity quality than low grade farm land) and then with so many caveats that it becomes almost meaningless.

But the line trotted out ad nauseum by Government politicians and their big business supporters that the planning system is preventing the development of homes and the creation of jobs is just nonsense. I won’t trot out the facts about the scale of allocated sites in local plans or the pipeline of sites with planning permission but it is clear that it is currently mainly credit markets and reduced public funding of affordable housing that are contributing to the slow down in housing completions and starts.

The planning system does contribute to the reduced numbers through the reduction in viability of marginal development from its requirements for planning gain (particularly s106 affordable housing combined with a ban on grant for these homes) but this is a policy that if anything the Government is going to make worse rather than better.

But the planning system is probably not the most effective policy tool for delivering homes where they are needed. Homes are mainly needed where the jobs are being created which is generally in the most prosperous areas where house values are the highest. You could build (and sell) a very large number of homes in centralLondon, except you can’t. It isn’t primarily the planning system that is stopping these homes being built, it is that centralLondonis pretty built up already. And the existing buildings have high values that mean that most of them aren’t going to be redeveloped any time soon. And the high values mean that most people can’t afford them anyway.

It was instructive this weekend to watch the gut wrenching 1967 Ken Loach classic ‘Cathy Come Home’. 45 years later the problems of housing shortage have not fundamentally changed.

The fundamental problem today is that financial and business services (yes, bankers) in London have global competitive advantage that means that they deliver substantially higher economic output and therefore wages per head and this feeds through into the wider economy of London and the south east and into property prices.

And we probably can’t do much about this quickly. Building public transport infrastructure intoEast Londonwhere the greatest capacity for new homes close to the business and financial jobs are is a start. But the next stage is to build places to a quality that delivers Notting Hill East. Not something the industry or the planning system seems able to do.

The alternative is to look further into the future and run an industrial policy that seeks over time to develop competitive advantage for industries in places where there is capacity to build homes (most of the rest of our major cities) but regional policy is deeply unfashionable with the current Government and the tools of the trade (the Regional Development Agencies) are now as good as gone.

Most rational people can see what is happening here. The planning system has gradually become slower, more bureaucratic and more expensive. The developers, who are often frustrated more by the planning policies preventing the worst of their excesses than by the system itself, are trying to use the inefficient system as a reason for removing the policies it is intended to deliver.

At the same time the battle at the heart of Government between the ‘Greenest Government Ever/Big Society’ and ‘Market Free For All’ armies rages on. The NPPF represents the worst of compromises between these irreconcilable philosophical positions.

But fundamentally this is a problem of markets. Markets do not deliver affordable housing where the jobs are. And Governments can’t do this either. We would do better to have a rational debate about what we are trying to achieve, what the best tools to achieve those objectives are and only then about how the planning system can help achieve some of them.