Not only does Britain build houses too slowly, but it generally builds too many of the same type.
That is the main conclusion of a study into ‘build out’ rates (the rate at which homes are built once planning permission is granted) by Tory MP and former cabinet minister Sir Oliver Letwin.
Letwin’s final report, published on the same day as the Budget, calls on developers to build more social and affordable housing alongside properties for sale at market prices. Crucially, it also calls for local authorities to play a key role in ensuring there is greater diversity on large construction sites.
So, does this signal the rebirth of local authority planning, with councils able to flex their muscles when it comes to housebuilding?
Richard Blyth, head of policy at the Royal Town Planning Institute, says the report may signal a revival of councils’ creative planning role. ‘It seems to be part of a broader rethink of total reliance on the market to solve local problems,’ he says.
Others are equally enthusiastic, while acknowledging that the government has yet to accept Letwin’s recommendations. Hugh Ellis, chief executive of the Town and Country Planning Association, wishes the review had gone further and tackled questions such as how much landowners make from selling sites. But he is pleased that the potential of councils is being recognised. ‘If we want to solve the housing crisis and increase quality, then local government is the answer,’ says Mr Ellis
The Letwin review, which focuses on sites with more than 1,500 homes in southeast England, was commissioned by the Government in 2017. It clears developers of deliberate ‘land banking’ but says the fact they generally build similar or identical properties that take time to sell is the main reason construction takes so long. Among Letwin’s recommendations are:
• developers to be required to build different types of home, including more social or affordable housing
• a national expert committee to advise councils on the types of property that might be offered on large sites and arbitrate over disputes
• giving local authorities in areas with high housing demand the power to identify land that can only be developed as a single large site
• giving councils greater power to set up local development companies
Ministers will respond to the review early in 2019. Any changes could, in theory, be brought in through secondary legislation rather than requiring new law.
Barry Wood, leader of Cherwell District Council in Oxfordshire, would like to see greater clarity over what councils can potentially do, as well as the number of social or affordable homes that should be built.
‘The Government needs to be as clear as it can be as to what it sees the role of councils in terms of delivering well balanced communities,’ he says.
In theory, adds Cllr Wood, Letwin should lead to stronger planning departments. But at the same time, the fact many are not in the best of health could be a problem.
A review chaired by former housing minister Nick Raynsford, published in November by the TCPA, found widespread dissatisfaction with the planning system. Many professional planners, it says, are ‘trapped in a process-driven treadmill’ rather than being able to develop visionary solutions.
While Letwin flags up shortages of bricklayers and other skilled labour, his review has less to say about recruitment of strategic planners. ‘Planning is on its knees in local government,’ says Hugh Ellis. ‘The service can’t suddenly be turned back on.’
Raynsford’s conclusions are in line with the findings of a survey carried out earlier this year by the RTPI. This revealed that 10% of local authorities do not have a post-holder responsible for planning, while just 23% have a head of planning who reports directly to the chief executive.
But how do house builders feel about Letwin? Andrew Whitaker, planning director at the Home Builders Federation, says developers are happy to see councils more involved in planning, but that does not mean them taking control.
‘The quicker you can turn a site around, the more return you’ve got to invest in more sites,’ he says. ‘That is in the interests of builders as much as it’s in the interests of local authorities.’
With the Government having announced the lifting of caps that limited borrowing through the housing revenue account (HRA), the next few years could see local authorities not just calling for more social housing but building it themselves.
Developers, says Mr Whitaker, would welcome the arrival of ‘more players in the game’ but says that any decision to build more social housing is likely to affect land values, and require more government subsidy or alternative funding. ‘Somebody has to pay,’ he says.
The National Federation of Builders, which represents smaller builders, is concerned by Letwin’s focus on large construction sites and large developers. Rico Wojtulewicz, its senior policy adviser, recognises that planning departments are under-funded but says councils could be more robust in the way sites are allocated.
‘If local authorities were a bit more creative and worked with a range of landowners and developers, they would get a better mix of housing,’ he says. Confusion surrounds Letwin’s proposal for an expert committee to advise councils and arbitrate in disputes with builders. How will this affect the role of the planning inspectorate, and is it likely to mean more or fewer applications going to appeal?
Andrew Whitaker says any committee would need to take account of local context and recognise why decisions were taken when they arbitrate between planners and builders. ‘It’s difficult to say what weight planning inspectors will give to the opinions of this group of people,’ he adds.
Ideally, says Richard Blyth, there should be no need for appeals if planners get decisions right in the first place.
Overall, he adds, local authorities are being offered a ‘turn in the driving seat’, though some may be more enthusiastic than others about taking on a more pro-active development role.
And there is no guarantee that residents will support large developments because they include social or affordable homes. But providing Letwin receives government backing, councils should be able to voice objections to homogenous schemes more strongly and suggest ways to make them mixed tenure. ‘It’s an exciting opportunity but there is a lot of work to do around how that might look,’ says Mr Blyth.
This feature first appeared in Local Government News magazine. Sign up here for your own free copy.
Image: Twocoms / Shutterstock.com.