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Opinion

Planning for growth

Planning for growth
November 15, 2012
Planning for growth

If the government in Westminster is to be believed, this kind of problem is endemic to England's local authorities. Ministers like to talk of the construction industry as if it were a tiger caged by a chaotic mesh of local regulation and bureaucracy. One of the more contentious points of the Growth and Infrastructure Bill currently making its way through parliament is to allow central government in certain instances to bypass the entire planning function of "underperforming" councils.

One problem with this is measuring underperformance. Challenged to give an example of a failing planning authority in the House of Commons last week, communities secretary Eric Pickles named and shamed Hackney. But after the East London borough mounted a spirited defence of its record, the minister was forced to issue a correction to the parliamentary record, replacing Hackney with its North London peer Haringey in Hansard.

It's hard to avoid the conclusion that the government is making up its planning reforms on the hoof. It has announced so many initiatives since coming to office two-and-a-half years ago that keeping track is a full-time job. But a bluffer’s guide might divide them into three waves.

First came the localism bill, which built on a coalition agreement pledge to "radically reform the planning system to give neighbourhoods far more ability to determine the shape of the places in which their inhabitants live". This was a reaction against the unpopular housebuilding targets of the Labour era. Instead of "Regional Spatial Strategies", planning decisions would now be made by "neighbourhood forums".

The advantage of localism was its popularity. The drawback was its fluffiness - it said nothing about how to increase house-building nationally. That became a much higher priority as the post-crisis bounce faded into a double-dip recession towards the end of 2010, led by the construction industry.

To that end, a draft National Planning Policy Framework was published in mid-2011. The original idea was to consolidate over 1,000 pages of planning policy into a 50-page document, but it was increasingly sold - despite vocal protestations from the Daily Telegraph and the National Trust - as a way of stimulating growth by enshrining a "presumption in favour of sustainable development".

The final wave of reform has come this autumn, with less fanfare but even greater urgency. Stubbornly weak growth figures have so shaken senior Tories’ faith in the Thatcherite idol of deregulation that they have resorted to dirigisme - never mind that it is ideologically and practically at odds with localism. Readers may remember the September headlines about longer home extensions. This completely trivial change was actually the headline-distracting front for a whole raft of more interesting stimulants, including £10bn of debt guarantees for private-rented or social housing projects. Eventually this package led to the Growth and Infrastructure Bill, with its provisions to circumvent local authorities.

So are the reforms working? Their most immediate impact has been confusion, as the industry grapples with various sets of new rules, some of them contradictory. "The only growth is in the volume of work for us, because nobody can understand it," quips one planning consultant. There's also no sign of a recovery in construction. In the third quarter the sector generated its lowest level of output since the spring of 1999 - though that probably has more to do with the savage cuts to public capital spending in 2010 than with planning problems.

Yet Keran Power, managing director of Hallam Land Management, a division of Henry Boot, reckons the government’s 'prodding' is beginning to work at the coal-face. "It's quicker now than it has ever been to get sites through planning. It used to take 10 years. Now it can take two if you've got the right land." He thinks the key catalyst for change has been the threat that the central planning inspectorate will grant permission at appeal unless local councils get their 'local plans' into shape.

Major obstacles still remain, however, particularly surrounding the so-called Community Infrastructure Levy or CIL - the contribution developers make to local services. The government wants cut-stricken councils to accept lower contributions on 'stalled sites' just as they are most desperate for funds.

The root of the problem is that housebuilding remains extremely unpopular. Projects bring councils little benefit and a good deal of hate mail. Taxing developments heavily is one way of greasing the collective palm of the community - but is only acceptable to developers in a strong property market. To overcome this problem, the government needs to go much further in tying local-authority revenues to local population figures, so that councils and communities have an incentive to grow. Until that happens, planning reforms will surely only help at the margin. That's democracy.