There are a number of possibilities and in urban areas the big ones are increasing the energy efficiency of existing buildings, reducing the carbon content of the energy used and reducing the carbon produced by transport.

All of these have their challenges. The big unknown at the moment is the likely take up of Green Deal when it gets going later in the year. The evidence is mixed but expectations are not high unless Government weighs in with some big incentives (possibly changing the SDLT system or even rates and council tax – probably in a fiscally neutral way ie rewarding efficient buildings and penalising inefficient ones) to add to the big stick of banning the letting of EPC F and G rated buildings from 2018.

In Haringey there is an excellent example of the high levels of take up that can be achieved with a motivated community (Muswell Hill) knocking on doors and encouraging and communicating with their neighbours (50% take up in a short period of time in some parts I’m told).

But there are also the challenges of large numbers of poor quality buy to let houses in multiple occupation (where tenants will be able to demand improvements from 2016). Government is going after poor quality landlords in a big way on this one and as the market realises the size of the threat I can see the value of energy inefficient and costly to improve properties falling significantly.

One of the big issues in Haringey will be fuel poverty (the number of households in this situation in the UK has been increasing with increased energy costs) and the Green Deal doesn’t address these households who will need to rely on subsidy either through the energy company obligation or through public landlords. The coming replacement of Decent Homes funding for ALMOs with the Housing Revenue Account changes also presents some challenges and opportunities for some of the inner London boroughs.

However it happens, large amounts of money will eventually be spent on the eco-retrofit of existing buildings and the regeneration challenge is probably to get this work done by firms who will recruit and train youngsters from deprived communities.

The next two most likely big wins for carbon reduction are both urban design related.

In reducing the carbon content of energy, in addition to greening the grid and expanding micro-renewables, creating localised heat networks, particularly where there are already sources of surplus heat (in this case a waste to energy plant) seems to have some potential.

As with Green Deal it is inevitably going to be hard to get existing homes to accept the hassle of connecting up to these networks without incentives so larger commercial and industrial buildings or blocks of flats with communal heating are more likely targets but one of the keys to success is building density.

The denser the area is, the more effective the heat network will be. Suburban design doesn’t work for sustainability on a number of levels.

The other big one is transport. Again density is key. Walking, cycling and public transport viability all increase with density until in inner London the car becomes a liability rather than an asset.

I was reminded of this at the Urban Design Group awards this week. The point was made that we do not plan infrastructure and land use as part of the same system. We keep them in separate silos (and we even divide transport into its own separate silos).

If we end up with an NPPF that has a Bruntland or similarly defined form of sustainable development at its heart, the contrast with the way we plan transport will be even more stark.

In Tottenham, transport is part of the answer to both regeneration and sustainability. There is potential to substantially enhance the Overground and extend the already excellent Underground while reducing space for cars and encouraging walking and cycling. This isn’t a short term game but Copenhagen shows us what can be done incrementally over say forty years (which conveniently takes us just about to the key 2050 greenhouse gas target date.

The UDG awards also raised the question of the values that underpin urban design. Many of the places created in the UK recently have been designed for the values of global capitalism (out of town shopping, business parks, suburban housing estates) rather than the values of sustainable development.

One of the winning schemes was isis Waterside Regeneration’s Brentford Locks West which was heavily influenced by the values of isis and their Swedish masterplanners Klas Tham and Johannes Tovatts as well as the sustainability and urban design credentials of David Rudlin at Urbed.

This type of approach brings significant social and environmental benefits and is really in tune with the present Government’s approach to Localism and the sustainable development definition we anticipate being in the revised NPPF.

It is ironic though that the funding cuts appear to have put paid to the digital infrastructure behind Building for Life (an assessment process that covers urban design and sustainability in a relatively holistic way) just as some of the major house builders were putting it at the heart of their design processes. Hopefully Tony Burton’s arrival at Design Council, bringing with him his huge knowledge of sustainability, urban renaissance and citizen action is a sign that some of this can be put right.

The UDG awards though were a delightfully understated affair. Yes they took place in Whitehall but without any of the high priced dinners, television coverage and politically influenced decisions of some of the architectural awards. Indeed they had genuine educational content.

I have accepted a role as a lay judge for the RIBA architectural awards (north east of England) and it will be interesting to see the extent to which some of these wider issues are factored into the decision process. I will continue lobbying for these types of awards to recognise the architect’s client. I think RIBA miss a trick here. Surely it’s a great opportunity to suck up to the profession’s clients and reflect the reality that good buildings, and good places, require both a good designer and a good client, as well as good values.

The Homes and Communities Agency are currently working up the approach for the £30m revolving loan fund announced in the Housing Strategy and we can expect to see details of this appearing around budget time. The UK lags behind many other countries in the number of homes produced in this way (where customers order their homes, often with customised designs, and often paying for them in instalments as they are built) and this initiative is trying to double the number of homes produced in this way over the next ten years or so.

The barriers currently include the power of the big housebuilders (the main housing development land owners) who are still somewhere close to the ‘you can have any colour you want so long as its black’ end of the customisation spectrum, the lack of mortgage finance available for payment by instalments and the land market (particularly the public land market) which tends to target developers rather than custom builders.

However for people wanting an influence over the design of their own home the next 12 months or so are likely to be the best opportunity for some time. Small home builders in particular are keen to build to order on sites they own, local authorities are likely to start promoting it on some of the sites they are selling, HCA will be providing a small amount of bridging finance and neighbourhood planning and community right to build are likely at the very least to spark interest in the concept.

The next 12 months are also going to be a good time to buy a new home and it is possible we will see a significant spike in new home building. Putting the planning situation to one side (although if the NPPF is made the default position for areas without local plans immediately ie without the much called for two year transition period, we can expect to see a huge surge in planning applications particularly on green field sites), the mortgage indemnity guarantee scheme, now renamed NewBuy, is likely to see significant take up.

The unknown is the extent to which its restriction to new build property (yet to be defined but could range from ‘not yet started’, through ‘not yet completed’ or ‘never occupied’ to ‘not sold since practical completion’) will mean that chains that include second hand properties will restrict take up.

The scheme, again likely to appear around budget time, is a sensible idea that directly targets the main factor restricting the housing market at present which is the lack of low deposit mortgages caused by the impact of the financial crisis, and subsequent regulation, on the willingness of banks and building societies to lend. This scheme is unlikely to be forever though, because as banks rebuild their balance sheets the market gap will reduce, although low deposit mortgages may never be as cheap as they were five years ago. Government will need to be watching carefully for the right moment to wind up the scheme as well as how mortgages under the scheme are priced.

Interestingly the UK Government is being pretty secretive in its negotiations with the big house builders and the Council for Mortgage Lenders about how the scheme is being designed.

The reason for this secrecy seems to be the threat by small house builders to mount a judicial review because they are being discriminated against by the design of the scheme. This seems ironic at a time when the Government is trying to ensure that its Get Britain Building fund for stalled sites can be accessed by small builders after criticism that the big house builders soaked up much of the cash from its predecessor Kickstart programme (GBB last week received a large number of bids including a number from smaller builders).

The reason we know that the small builders are being discriminated against is that the Scottish Government are intending to launch an almost identical scheme using the same managers (Jardine Lloyd Thompson) and the same offshore (Guernsey) structure. And the Scottish Government seem to take the view that transparency is better than secrecy and have communicated the details of the scheme to the industry.

The discrimination in England seems to be deliberate. First the Government advertised the involvement of certain builders on its website as part of its launch press release and refused to add the names of any other developer who subsequently agreed to support the scheme. Then they undertook secret negotiations with the Home Builders Federation (who came up with the idea in the first place) which allowed the big builders to gear up their sales teams to start marketing the product (try putting NewBuy into Google and see which paid for links pop up at the top of the page). Finally the design of the scheme means that builders with lower volume sales will pay substantially more per home to join and then will only be allowed to join if they team up with their smaller competitors and share their competitors default risks.

Government are covering this with the statement that the scheme will be accessible to all builders, which it will, but at a much higher cost and only after a considerable delay once the scheme is launched and assuming they are able to cut deals with their competitors.

So what should the Grant Shapps be doing about this?

Well transparency would be a good start. Where government money is involved it would make sense to publish detailed and regular updates on the CLG website (if it helps he could use the Scottish Government and JLT presentations). This would at least allow smaller builders, who have a lot of other things to worry about at the moment, to start getting their heads around the idea.

Then he could make sure that the up front capital cost of entering the scheme was pro rata to the number of homes the builder builds. This would be cost neutral to the Government by setting a pricing structure that pro rated the fixed set up costs by builder volumes.

And finally he could get HCA to actively broker relationships between builders, and between builders and lenders, to make sure that on launch date all builders were in the same competitive position and of course reduce the minimum number of homes per cell to the lowest possible number, ideally one, so that they didn’t have to share risks with their competitors.

If the Government misses the mark on this no doubt the select committee as well as the press will be asking some pertinent questions about when they knew this was an issue and why they failed to deal with it.

This process is fascinating on many levels.

Both the cities and Government seem to want to avoid the cities collaborating too much during this process. The cities because they think they can gain some kind of competitive advantage over each other and the Government because they want to be able to display localism at work through tailored solutions for each city and avoid the cities as a group setting the policy agenda.

It’s interesting that the Government has started with the core cities (Manchester, Liverpool, Newcastle, Nottingham, Leeds, Sheffield, Birmingham, Bristol) when cutting these deals, rather than with the places with a consistent track record for growth like Cambridge, Milton Keynes, York and Reading as identified in the recent Centre for Cities report.

Of course the core cities are bigger and probably have the greater capacity to impact the overall UK growth rate and well as having the physical capacity to grow sustainably through the development of inner urban brown field sites (likely to be favoured by a brownfield first policy in the NPPF) and at the same have the greatest potential to positively impact unemployment.

There seems to be a growing policy divergence between Government and the core cities although both have their reasons for trying to hide this. In particular the core cities recognise the importance of urban regeneration (of deprived neighbourhoods) and urban renaissance (starting from the city centres). Both of these are critical to their success as places and are also politically important. Large proportions of the core city population live close to, or in, neighbourhoods in need of regeneration and city centre vibrancy is a key indicator of economic success.

The outcome of the Government’s NPPF considerations will be important to cities ability to grow their city centres by resisting urban sprawl imposed beyond their borders by neighbouring authorities, a theme Richard Rogers returned to eloquently in the Financial Times last week. The Government on the other hand has been setting up financial mechanisms which overall tend to move public finance to more prosperous areas with higher land values and rates of development (New Homes Bonus, Community Infrastructure Levy, Tax Increment Finance etc).

These City Deal discussions bring together a number of related themes including regeneration, planning, unemployment and housing delivery as well as wider issues around budget responsibility for functions like transport, welfare to work and broadband delivery.

Some of the city asks seem to go directly against Government policy with suggestions to bring back strategic planning, albeit at the LEP (usually city region) level, and a substantial appetite for significant regeneration funding through tools like TIF and JESSICA.

As the discussions move into the detailed phase it is clear that some cities and much of Government just don’t have the capacity for radical innovation or detailed policy development in some of these areas.

There is talk of asset backed vehicles despite the fact that property market funding conditions mean that these are probably one of the worst ways to seek private investment at the moment. The RICS and Local Partnerships have just published a review of the track record of public private property partnerships (PPPP)/asset backed vehicles (apparently not yet available on line) and reading between the lines it is clear that it is now almost impossible to secure institutional equity investment or development debt for vehicles like these at present despite the successes of a number of them including isis and Blueprint (please excuse the crass plug) in delivering high quality regeneration through the recession.

Some cities have worked out that using their financial strength to provide guarantees is one of the most powerful ways to secure private investment but in a world where local authority teams are being cut to the bone and consultancy budgets are no more it is clearly difficult for them to drive these kinds of projects through.

Interestingly Scotland, in particular Glasgow, is probably leading in this area of innovation which may be a reflection of the different institutional arrangements there. The major cities in Scotland secured a lot more of the public funding streams (eg housing) a lot earlier than in England and despite the cuts have retained, for now at least, a capacity to use them creatively.

One of the tensions in the cities’ asks is around the role of the Homes and Communities Agency and particularly their stewardship of the economic assets inherited from the RDAs. It seems that no sooner does the HCA survive the attempt by the RDAs to abolish it they now face the same threat from the core cities (London already having been removed). One particular issue is that the former RDA assets were, in a number of cases, to be used as match funding for setting up JESSICA funds. The dislocation caused by the RDA wind up and the apparent loss of institutional memory and resultant delay means that the creation of JESSICA funds prior to the end of the current ERDF programme is now up against 11^th hour deadlines. Again Scotland and Wales, and indeed London, where there haven’t been the same problems, have got their JESSICA funds going with less difficulty.

The HCA has also suffered from the cuts and while it used to be the place where some of this innovation would be expected to happen much of that capacity has been lost. Indeed the review of the private rented sector by Adrian Montague is something that was previously being done pretty effectively by the HCA. It will be interesting to see what they say about the current surge in interest in long term public sector RPI linked lease structures for financing market rented housing.

One of the areas that the leading cities are looking very closely at is what in the USA is called Economically Targeted Investment. Over there, public sector pension funds invest a proportion of their assets in their local areas in assets like affordable housing, regeneration and small business venture capital. Generally these investments have been very successful, probably due to a combination of these being under invested areas and the pension funds’ skills and local knowledge. Ironically it is public sector pension funds that are some of the biggest investors in core city infrastructure in the UK but these are the funds from Canada, California and Holland.

The trustees of the UK local authority funds are often at the conservative end of the scale and have a horror of political interference but the funds are generally administered by core city councils. At a time when these funds are seeking long term secure index linked cash flows there could be a marriage made in heaven between the core cities and their ability to guarantee income streams from assets and their own pension funds.

So we are going to have an interesting few weeks in the run up to the budget where we will see the first of the core city deals and, along the way, the NPPF which is rumoured to be heading towards a dropping of the ‘default yes to development’ but also no transition period to allow local authorities to produce plans. We will also see the new build Mortgage Indemnity Guarantee which appears to be rushing headlong towards a solution that discriminates in favour of the large Conservative party funding house builders and against the smaller locally based builders. That feels like it has the potential to be another Bankers Bonus debacle. But more of that in the coming weeks.

In the excellent book, 23 Things They Don’t Tell You About Capitalism, Ha-Joon Chang (Cambridge economics professor) explains that there is really nothing in our current world that looks like a free market. Everything is subject to regulation of some sort or another and real estate is no exception.

Regulation is important because unregulated free markets almost inevitably have bad consequences for society or the environment. In real estate, for example, unregulated markets leave poor people without homes or create ghettos. As a result we subsidise housing for the poor and use s106 in England to help deliver mixed communities.

These were the subjects for discussion at a breakfast round table entitled ‘The Impact of Housing Policies and Overseas Sales on the Social Fabric of London’ at New London Architecture, chaired by Peter Murray (author of A Passion to Build). Specifically we were discussing issues like the current desire London housebuilders have for selling flats to absentee buy to let investors in south east Asia and the ‘Kosovo-like cleansing’ that some fear will be brought about by the housing benefit caps that are hitting existing tenants in London at the moment.

The group included representatives of some of the biggest private and third sector landlords in London as well as local, London and central government and academics and advisors.

Unsurprisingly the view of the larger developers was that there was nothing wrong with selling as much as possible to overseas buy to let investors despite the negative impact that large concentrations of often empty or high occupant turnover properties could have on communities. This despite the fact that limiting buy to let is something organisations like the Homes and Communities Agency and increasing numbers of developers are now doing to help build communities and avoid the negative experiences many occupiers have had in boom time apartment blocks with large concentrations of buy to let.

And the point was made that the apparent security of selling off plan to overseas buy to let investors proved largely illusory when the market turned down and the relatively small forfeited deposits came nowhere close to filling the gap left by falling prices.

The housing associations and most of the public organisations generally had social sustainability much higher up their agendas and as a result were also concerned about the negative impact on communities that were losing people on low incomes as well as on the lower priced areas that were starting to see an influx of low income families with children. This feels like a modern example of ghettoisation in action. There was a general feeling at the breakfast that the city is its citizens not its buildings and that we need to try harder to build communities rather than dormitories.

There is an emerging literature on social sustainability from organisations like the Young Foundation and the Oxford Institute for Sustainable Development and some interesting work as part of the Future Communities initiative.

The negative impacts on society from unregulated property development would be mirrored in other areas were it not for planning policies. Nick Stern described climate change as the greatest negative externality (the economic description of the bad impact markets have on the public good) and without planning policies we would have even worse design, suburban sprawl and the many other problems that planning policies are designed to mitigate. The trick is selecting those regulations that do good. Governments do sometimes get it wrong.

The planning system does not manage to rein in all the negative impacts (for example the positive effect of owner managed local retail businesses on society at street level as advocated by Jane Jacobs has so far eluded planners in the UK although other countries like France have had some successes here) and where public land is concerned there are opportunities through the developer procurement process to secure those hard to measure but very real public benefits that the market would not otherwise deliver.

The Olympic Park Legacy Company is working hard through its procurement processes to secure high quality design in its early phases as well as to secure a community land trust with all the benefits that could bring in terms of social sustainability and community cohesion.

This is a classic way in which David Cameron’s and Ed Milliband’s visions of socially responsible markets can be made real. European procurement legislation (the Land Sale Directive) gives significant flexibility for public authorities to require socially responsible behaviour from developers. Indeed public land owners could go much further and use the procurement process to exclude those developers and house builders that indulge in short term, greed driven, socially irresponsible practices from tendering.

As we become better at measuring previously difficult to measure concepts like well-being and social sustainability we are likely to reconsider what is important and our planning system is likely to move on from one that seeks to prevent conflicting uses (a function born of the industrial revolution) to one that seeks to promote the well-being of communities and the prevention of man made climate change.

This could easily be led by procurement if Government displays leadership. A few judicious changes to Office of Government Commerce advice would push central Government procurers in the right direction and some good HCA advice would be influential with local authorities newly freed from central government bureaucracy.

Ed Milliband has suggested we should judge David Cameron by his actions not his words. This is an area where local government of all political persuasions can act if it so chooses. Society will judge local administrations by what they do or don’t do to help make property developers and real estate markets socially responsible.

On the face of it, in both eras, both centre right governments in difficult economic conditions might be expected to respond in similar ways despite the other changes over 30 years. The debate over law and order versus economic causes was certainly similar as was the debate between growth and managed decline.

In reality though the response couldn’t be more different.

In 2011 the response of central government has been almost invisible. In 1981 Michael Heseltine grabbed the headlines.

In 2011 in London, instead of a central government response, the London Mayor initially put two private sector people, Julian Metcalfe (co-founder of sandwich chain Pret) and property developer Stuart Lipton, as the public face of the state response. In 1981 Heseltine dragged a bus load of financial institutions to Merseyside and started a journey that first created Inner City Enterprises (and the many regeneration talents that learnt the trade there) and ultimately led to the creation of the Aviva managed Igloo Regeneration Fund.

In 2011 in London the GLA is funnelling its money through the local authorities, in 1981 the competence of local government was seen as a barrier.

This time round 2011 had turned into 2012 before London had a coherent response (the launch of the state response to the Tottenham Riots was due this week but was pulled at the last minute). In 1981 matters had been agreed in cabinet by the October.

In 2011 the response to the riots in places like Croydon and Tottenham is primarily to spend money on landscaping of streets, addressing the symptoms by repairing the physical damage. In 1981 Michael Heseltine’s seminal paper entitled ‘It Took a Riot’ (released recently under the 30 years rule) generated an holistic response to the underlying causes of the riots.

Michael Heseltine’s rapid policy solution may, with the advantage of 30 years of experience (and in the view of some at the time), look, in some ways, limited, misguided or superficial but it marked a turning point in the country’s attitude towards deprived communities. From that point on we recognised that these were not places we could turn our backs on and abandon or where we could rely on the trickle down of wealth created elsewhere to sort out.

It was also a policy turning point. Almost all of the great innovations that led to the substantial regeneration of our major cities and their successful transformation to a post industrial revolution economy started from this point.

These lessons appear to have been lost today despite Lord Heseltine’s continued presence on the fringes of Government.

In ‘It Took a Riot’, a beautifully written, intense analysis, Heseltine makes some powerful points that echo across the three decades.

He says ‘Voluntary agencies and self-help groups can do things more cheaply and effectively than official bodies – and contribute to the growth of local communities….We must harness their energies.’

He goes on to say ‘It is in my judgement our inescapable duty to respond to the problem of the main urban areas with urgency and resource.’

He continues, ‘I cannot stress too strongly that my conclusions and proposals are not based on my fear of further riots. They are based on my belief that the conditions and prospects in the cities are not compatible with the traditions of social justice and national evenhandedness on which our Party prides itself.’

This view was contentious at the time with some in cabinet arguing against it. One strong view in the current debate is that this argument has been lost within the present cabinet. In part this seems to be reflected in the Government’s recent response to the Select Committee report on Regeneration which appears to abdicate responsibility for deprivation and to lack the 1981 Government’s strategic understanding of the issues and willingness to take a leadership role. Some have described the current approach to our most deprived areas not as managed decline but as decline by neglect. If this were true, it would be truly shameful.

One fascinating contribution to the debate in 1981 came from John Hoskyns and the Prime Minister’s Policy Unit. In a paper on ‘It Took a Riot’ he described the nature of the problem that urban regeneration was seeking to address as a ‘system problem’. He said ‘It is more like stabilising an unstable ecological system, an immensely complex self organising system which can never be totally understood and whose behaviour does not respond predictably to Government orders or subventions.’

This insightful understanding led to the suggestion of competitive bidding as a way of generating local alliances and a competition of ideas with Government acting like a venture capitalist with a portfolio of different investments some of which would succeed. This is clearly the thinking behind what became City Challenge, the UK’s most successful urban regeneration programme.

This slightly depressing picture of our failure to progress in our ability to respond to urban problems over thirty years was ameliorated by a conversation at the end of the week. In Tottenham, one potential advantage of a slow response is the opportunity to make the correct response.

While there is undoubtedly a danger of outsiders doing inappropriate and even damaging regeneration to Tottenham the thoughtful presence in the area of organisations like the new economics foundation with their bottom up approach and Arup with their understanding of regeneration and the key role of transport mean that there is undoubtedly a wealth of ideas to be mined from.

In some ways the experience in Tottenham and in Croydon illustrates the pros and cons of the artificial debate between ‘local’ and ‘top down’ approaches to regeneration. It is self evident that neither extreme is right. In both places local people are involved but are not alone and resources are being transferred from both national and Greater London pots.

Local people have understanding and insights, and taken across the deprived communities as a whole, a wealth of ideas that vastly outweigh those available in Whitehall. However they may not have the necessary specialist experience or delivery skills and they will be unable to operate if their only source of income is what they can raise locally.

Heseltine got this and provided the leadership, support and resource transfer necessary for local people to lead and succeed.

We have three decades of urban regeneration experience to base our 2012 Riots response on. We mustn’t waste it.

Back in 2010 he was implying, as it turned out with considerable justification, that HCA was failing to meet its statutory objective to contribute to the achievement of sustainable development and good design.

And yet this week the prospectus for Get Britain Building Fund (GBBF or Kickstart 3) was launched by HCA without any design criteria for the prioritisation of schemes or minimum design thresholds for funding.

The design function in HCA seems to have been shuffled off into the affordable housing side of the business and the land and property side seems to have lost some of its focus on this part of its statutory purpose.

This seems strange when there is a considerable consensus around the importance of good housing design to reducing the NIMBYism that characterises so much of planning and that the Government are trying so hard to reverse through localism and the NPPF. There doesn’t seem to be anything in the GBBF prospectus to avert a debacle of even greater impact than Kickstart 1.

As ever, Government is challenged by the task of joining up across different policy areas. The Select Committee report on the NPPF did an excellent job of forensically reviewing a wide evidence base and of highlighting in detail the changes needed in the NPPF and the areas of consensus.

The design aspects of the NPPF are seen as one of its stronger elements but it will be interesting to see if the Government accept the recommendation of the Select Committee to have a further limited consultation on the next version. Given the poor drafting of the first one it would seem sensible to get some external views to make sure that the changes don’t introduce unintended consequences. One concern is the possibility that the definition of sustainable development may not sufficiently integrate design quality while also being given fundamental importance.

Given the Government view that ‘Good design is indivisible from good planning’ and people like Tom Bloxham arguing for scrapping the planning system and replacing it with a design system, the importance of making design quality central to the NPPF is clear.

But it also needs to be central to all the other government processes that impact the built environment if we are going to get widespread public acceptance of the new housing that we need.

There has been much made of the financial incentives to communities to accept new development but most people I talk to think that the quality of development will be more important to creating YIMBYs than the cash. This is a policy judgement which is probably not best left to the Treasury mandarins and their political masters who appear to have had a heavy influence in this debate.

Andrew Oswald, Professor of Economics at Warwick and a leader in the field of well-being, made an interesting point in the FT in relation to the select committee report where he outlined the evidence that people underestimate the positive impact of ‘green’ factors on their well being. Given the Prime Minister’s emphasis on this aspect of policy it could be expected that ministers will be taking this into account as they pick up their pens to edit the NPPF redraft in the New Year.

Policy makers are now increasingly/finally turning their attention to what can be done quickly to increase housing supply (Adrian Montague was announced as the new chair of an inquiry into institutional investment in the private rented sector just before Christmas) and the select committee are well under way with their evidence gathering on the financing of housing.

What we need right now is a radical increase in home building to deliver a boost to growth and to meet the housing shortage in some parts of the country.

The institutional money to finance this is not interested in taking development risk and not much interested in taking housing market risk and this applies almost equally to debt and equity.

What the institutional money is looking for right now is low risk and the source of this currently is the UK Government. The Mortgage Indemnity Guarantee scheme recognises this and if the bias against the smaller developers can be removed, and if it is uncapped, it should make a difference, although there will be a lot of what the economists call deadweight as many people will use the scheme who would have bought anyway.

Another similar approach would be for government to guarantee the rents from new build residential in the long term. Institutional money, both equity and debt, has an almost insatiable appetite at the moment for long term index linked cash flows underwritten by the UK government (or even some lesser covenants like big housing associations and local authorities). If these guarantees were focussed on Build to Rent it would unlock a tidal wave of money and development and, in the short term at least, looks like a more cash effective investment than the GBBF. It might still need the subsidy of low cost public land through a Build Now Pay Later approach which leaves the future value risk and reward with the public sector.

The big risk Government would be taking on would be the potential mismatch between RPI and residential rents. In the short term the quantum of this is easily manageable and perhaps this approach needs to be seen as a short term stimulus rather than as a long term policy.

However even as a limited approach it would have the benefit of helping unlock a long term house price derivatives market that could start the process of providing a credible investment alternative to house purchase with a mortgage. It might also provide a seed quantity of stock for future unguaranteed PRS funds.

But even as a pilot, whether it is Build to Rent or Get Britain Building, the design quality of what is built and its positive impact on the local community will be critical to the process of re-educating society that housing development can be done well.

There is no time like the present, when the volumes of poorly designed housing are at their lowest for a generation, to be delivering well designed new places to change public attitudes to development. This is no time to waste a crisis.

We’ve talked before about the political imperative to be seen to be driving economic growth (which led to the ‘enemies of enterprise’ attack on the planning system). This week saw the launch of City Deals that were presented as ‘unleashing the engines of economic growth’ as well as being a sensible transfer of power from neat thinking Whitehall to practical doing city authorities. Though Nick Clegg slightly spoiled this last bit by presenting it as a something for something transaction between central and local government. Government wants city mayors in return but they know they won’t get them everywhere.

The detailed deals will reflect the political asks of city authorities and interestingly will have a big low carbon emphasis in many instances. They will also include the transfer of Homes and Communities Agency land and budgets to local authorities. The land includes the land previously in the hands of the Regional Development Agencies which means that the land will have transferred twice in a year with little happening to it on the way through.

Government is also couching the transfer of power in planning language by acting to ‘Ensure better strategic planning across cities and their LEP areas by granting LEPs statutory consultee status for planning proposals’ and expecting local authorities to ‘exploit their wide-ranging freedoms under national planning policy to deliver more, and better, homes where they are needed’. The cynic might say there hasn’t been anything in the planning system stopping local authorities doing this in the past that won’t still be there in the future (Green Belts).

They also announced ‘More planning freedoms for cities, including devolving non-planning consents where cities can reduce impact on business’ which sounds like the Penrose Review and its hard to believe it will be confined to cities.

Interestingly Government seems to be accepting that City Region strategic planning is required. They say, ‘When it comes to powers related to economic development, such as strategic planning and transport, there is likely to be a strong case for aligning powers with the functional economy’. Sounds quite like a call for something like a Regional Spatial Strategy.

There’s also an encouragement to joined up exploitation of public land and buildings to ‘Enable cities to integrate use of public sector buildings and generate savings by vesting local public sector assets in a single local property company, with receipts invested in local economic development’

So much for the good news

The first bad news is likely to be the release of the Kickstart 3 prospectus to be known as the Get Britain Building Fund (not to be confused with the Growing Places Fund). Apparently there is a swear box in DCLG for anyone mentioning Kickstart but that’s what it is.

The prospectus looks likely to contain a significant elephant trap for Government. The last Government (and the HCA and its then chief executive Bob Kerslake) got a big kicking for funding some horrendously designed housing with Building for Life scores as low as 1.5 out of 20 (Kier in Newcastle under Lyme and Miller Homes in Warrington).

It’s worth a look on Google streetview (Rylands Drive Warrington and Lymebrook Way, Newcastle under Lyme) for the full horror.

The new prospectus looks likely to have no design quality requirements at all, not even as a competitive element to allow the best designed schemes to be favoured (partly because of the Government’s abhorrence of national standards of any kind). This is despite many of the best big house builders like Barratt and Berkeley being big supporters of Building for Life and even though Government knows that success in increasing the volume of housing planning permissions and starts is likely to be dependent on improving both the industry’s design quality and community trust that new housing will make neighbourhoods nicer places.

The other big elephant trap the Government seem to be wandering towards is the Mortgage Indemnity Guarantee scheme. I’m hearing from a number of places that the smaller house builders have spotted that the design of this scheme severely discriminates against them and in favour of the big boys and are planning a legal challenge on competition grounds. If this is what transpires the scheme, which the house builders are already starting to market and which should launch in the Spring will be held up for months.

And finally I guess we might expect the Communities Select Committee to take a dim view of the drafting of the NPPF in its report this week. More on that when we have it!!!

The letter, in the Telegraph, I suspect arose originally from the pen of Lord Rogers, who seems to be very well respected across the House of Lords for his views on planning matters. It was interesting to see John Gummer (Lord Deben) putting his name to this vision for the future of England. Gummer has previous in his role as Secretary of State for the Environment when he put a stop to the worst excesses of out of town shopping. This is pertinent given Mary Portas’s report into the problems of the High Street which were very substantially exacerbated by the havoc wreaked by out of town retail in the days of Nick Ridley’s tenure in the Secretary of State’s seat.

The vision put forward in the letter is pretty simple – compact, walkable cities with eco-retrofitted buildings and local centres surrounded by green and pleasant countryside. The means of achieving it much more complicated.

The NPPF is a starting point. It is perhaps instructive to ask the question – does Government share this vision? If yes, then why did the NPPF draft make such a poor job of delivering it? If no, then what is the Government’s vision for the future of England’s urban and rural areas?

I suspect the problem that is now the NPPF was never framed in these terms. Instead it was – ‘cut planning policy down to 50 pages’. You can almost hear Eric Pickles giving the order.

And as a result a huge amount of time and energy has been expended. Time and energy that would have been much better applied to productive activities. First the energetic youngsters got angry and started shouting to raise the alarm – and Shaun Spiers of CPRE is also on the same letters page in the Telegraph, still shouting, and then the wise elders weighed in with some clear and influential thinking. Through all of this, parliamentarians expended huge amounts of time on the Localism Bill and hundreds of thousands of citizens made their views heard on the NPPF.

It makes the consensus based governance of the Occupy movement look like a model of effectiveness and efficiency.

In a time of social media and wiki style tools there must surely be a better way to make sensible consensus based decisions about these matters that should transcend tribal politics. This was the hope some had for coalition government and it seems to work better in some places than others.

It was interesting to see Greg Barker (Conservative) tweeting congratulations to Chris Huhne (LibDem and admittedly Greg’s boss at DECC) for the outcome from COP17 at Durban. The outcome was very much a curate’s egg. A roadmap towards a future legally binding agreement that maintains the path of carbon reduction in Europe but shows every likelihood, even if ultimately leading to a global legally binding and effective agreement, of being too little too late.

Still, when the expectations, well managed down in the UK, were for no real outcome, this roadmap does provide a glimmer of hope. And a failure to deliver it, very much on the cards throughout the conference, would have been disastrous, so credit to all of those who walked the extra mile in Durban to get it done. Again it was the youngsters that were raising the alarm while the grown ups struggled.

The COP process is also one that shows up the need for global government on global issues. Climate change, tax havens, the taxation of global business and a small number of similar global issues require a level of functional global government that does not yet exist. The challenge of pushing the right amount of power both up to European and global institutions and down to local authorities and neighbourhoods seems beyond nation state politicians generally.

And the challenge is to listen to the voices of those that Governments tend to ignore. The young, the radical, the poor – pretty much anyone who is not like the politicians and doesn’t have a vote in a marginal constituency. In London last month a group of youngsters, facilitated by Open City, launched a campaign to have their voices heard in neighbourhood planning. I think the wise elders in the House of Lords and the back benchers on the Select Committee would probably approve.

On Wednesday the Occupy movement highlighted the remuneration of Xstrata’s chief executive (around $9m in 2010) by occupying the company’s head office in London on the day of the public sector strikes.

Inequality was also highlighted by Lord Skidelsky in his excellent talk at OccupyLSX on Saturday afternoon after the Climate Justice March (which included real estate sustainability leaders Sunand Prasad (former RIBA President), Dan Labbad of Lendlease and Guy Battle of Deloitte) that highlighted that 7% of the world’s population produce 50% of the greenhouse gases and it is the poor of the world that suffer.

Skidelsky was asked about localism and pointed out the key role of Government in making transfer payments from wealthy neighbourhoods to poor neighbourhoods.

Inequality was also highlighted in the excellent Gillian Slovo play ‘The Riots’ currently playing at the Tricycle theatre in London’s Kilburn High Road. Focussed on the riots in Tottenham, the play managed to outdo even the excellent Radio 4 Today programme debate in Birmingham in communicating the underlying causes of the riots.

I’ve been spending some time in Tottenham recently as part of preparing for my role on the Haringey 40:20 Carbon Commission. The focus of my role is sustainable regeneration and the implementation of the transition to low carbon in a pilot area centred on Tottenham High Road, the epicentre of the August riots. At the heart of the riots was the tension between the consumer society and those excluded from it.

There were a slew of reports on the riots this week with the Riots Communities and Victims Panel issuing its interim report (Five Days in August), a Met police report and the Guardian/LSE Reading the Riots report which is being serialised this week. The comment which raised a big question in my mind was from the Panel report. It said ‘Deprivation can be looked at in a variety of ways, but it is important to remember that it is relative – people understand their value not in relation to their next door neighbour but to those who are at the top of the pyramid.’

This idea came up in my discussion with the Centre for Cities (CfC) this week when I got the chance to debate Happiness and Well-being with a group of extremely bright young people on the morning that the Office for National Statistics (ONS) released the results of their work on the measurement of Happiness.

The ONS main result was that we can measure happiness robustly using household surveys. The next stage will be to roll this out in the annual survey of 200,000 households and then we will start getting the data to measure happiness at local level. And so begins ‘The Era of Feel-Good Politics’ as Richard Layard discussed in the Independent.

At CfC we discussed what this was likely to show. Would income inequality in a neighbourhood increase unhappiness (the condition of many inner London neighbourhoods)? Will people turn out to be happier in neighbourhoods where income distribution in limited even where income is low? Or is the Riots Panel right when it says inequality can generate a negative reaction at a distance, perhaps by reference to ‘Banksta’ and FTSE CEO salaries?

These results may have a profound impact on regeneration policy. As Lord Skidelsky pointed out, most people think that most other people earn around the national average wage of around £26,000 pa. But in a group of ten people, if one earns £134,000 then the other nine earn an average of £14,000 a year and it is the disproportionate inflation of top end salaries over recent years that has been the main driver of ‘average’ wage inflation.

When we get the next round of ONS well-being results, will we be able to identify the income disparity in neighbourhoods and relate this to well-being? If we can, what will it show and what will we do about it?

The possibility of a radical change in neighbourhood income distribution being already under way in London was raised in an apocalyptic article in the Guardian on Friday.

Inequality, at least as between the top 1%, and particularly the top 0.1%, and the 99%, has been accelerating over recent years. Inequality between neighbourhoods, in London in particular, may be about to accelerate even faster due to benefit changes and in the future through accelerated Right to Buy, although the so called ‘Affordable Rent’ tenure will mitigate this in those high priced neighbourhoods from which middle income people had been priced and regulated out of over recent decades.

We know that the best way to deal with inequality (and one of the drivers of well-being) is through employment and that the main source of jobs is by word of mouth. So at least we know that high concentrations of unemployment and a lack of community connections in a neighbourhood is a recipe for inequality, unhappiness and deprivation.

If we discover that well being is at its highest in neighbourhoods that only contain the very poor and the very rich we might start to think differently about how we go about regeneration. And planning. And housing.

Interesting times!

This week Policy Exchange did it again, publishing the report ‘Cities for Growth’ which advocates building New Towns in the Green Belt around London and most other cities.

This time the No.10 response was calmer; ‘We have no plans to change the existing policy on the green belt’.

So why are we even discussing it, surely there is no story here?

Well maybe, and maybe not.

That first ‘barmy’ report advocated changing the use of industrial land in London into residential and just 3 years later that is exactly what the Government is consulting on in the proposed change to the Use Classes Order. It also advocated scrapping regeneration funding which is what has also happened.

The first report’s author, Tim Leunig, subsequently proposed scrapping the planning system for a system of planning permission auctions (Land Auctions) which is now being ‘piloted’ by Government and which Tim has recently commented on here.

So how long will it take for the current proposals to be official Government policy particularly given the position of people like James O’Shaughnessy, former deputy director of Policy Exchange, at the heart of policy making in No.10?

The author of the current report also claims some credit for the Use Classes Order proposed change (despite the damage it would do to Government policies like Tech City) as well as for the policy Grant Shapps has been espousing of real terms reductions in house prices over a long period of time.

This current report has been a long time coming. Its author told me to expect it back in July and then it was rumoured to have been pulled and then pulled again just before the Conservative Party conference on the grounds that it would  have inflamed the debate about the NPPF. Well yes it would. Finally it gets slipped out just after the Government’s housing strategy which might be thought of as a good time to bury bad news, or in this case perhaps to bury more ‘rubbish from start to finish’.

When the report says ‘Green belts stifle our cities by protecting low quality land at its edge while forcing development into really rural areas and cramming more and more into packed cities’ one can only assume it hasn’t visited cities outside the south. Crammed isn’t really the word for the swathes of urban brownfield land found in northern cities or even for the brownfield sites with capacity for 60,000 homes in Newham alone.

Emotive and empirically ludicrous phrases like this do think tanks no favours. Balanced and evidenced arguments may be harder work to put together but they are likely to be much more beneficial for society.

The report goes on ‘High land prices caused by restrictive planning laws squeeze out design quality: by making the price of development land so high that people cannot afford to build high quality homes.’ Its hard to square this with say No.1 Hyde Park, some of the highest priced land in the world and a building designed by Richard Rogers, or perhaps the author is saying that the design of this and others like it is poor.

Its hard to know where to stop with the criticisms of this report so just one final one. The report continually mentions office costs as being a major problem for northern cities for example saying ‘Northern cities are crippled by higher office costs than

Southern ones’. But when you look for the source of that evidence you find that it is headline rents for 7 year plus leases (which from personal experience I know to be between 30% and 50% higher than actual rents) and the figures quoted don’t tally with the quoted source. The important underlying fact that you can’t build offices at these rents is completely ignored.

It will be fascinating to see who wins this argument and how long it takes. John Gummer (Lord Deben, a respected former Conservative Secretary of State for the Environment) weighed in this weekend in The Times with an impassioned plea that was in direct opposition to the Policy Exchange proposals. He said ‘You have to have a presumption that you don’t build on greenfield sites’ and ‘You don’t regenerate your cities by spreading them out, you regenerate them by concentrating them. Look at Liverpool: they destroyed Liverpool by moving people out, shoving them out distances, never gave them any sort of community.’

He went on ‘If you rebuild your cities and city centres, if you build on land that has already been used, you are concentrating your development in a way that gives life to the city and from that you will get your wealth.’

This is not a party political argument because I could imagine Lord Rogers echoing these sentiments. It is an argument over a vision of the future of the country.

Policy Exchange speaks fondly of the US suburban model of development and is dismissive of what it calls the Rogers Report. At this stage in the debate I would normally advocate some visits to places like Detroit and Liverpool and Skelmersdale. Sometimes it helps to learn from past mistakes.

The debate over the NPPF is at least two arguments that have become conflated. First what is our shared vision, or at least a majority consensus vision, for the future of cities? Do we believe that if they are beautiful places they will deliver both prosperity and well-being? Once that argument is ended. for the time being at least, and hopefully in a new introduction to the revised NPPF that will need another round of debate, then we can try to work out how to design a system to most effectively deliver it.

We need the clever people in the think tanks to be part of this second debate but we need them to argue based on solid facts and experience not on youthful prejudice.