Tag: Labour

Fade to Grey (Belt)

Last week, Angela Rayner gave Marks and Spencer permission to demolish and rebuild their flagship Marble Arch store, in line with plans first submitted to Westminster City Council in February 2021. In between those dates, the proposal was considered by Westminster and by Sadiq Khan (both of whom approved it), by a public enquiry and by Michel Gove (who overruled them all and turned it down), by the High Court (which overturned Gove’s decision) and by Rayner (who gave the go-ahead). Whatever view you take of the proposals, these layers of decision-taking and months of delay cannot be right – the reconstruction phase of the Notre Dame project took less time.

Against this backdrop, you can see why the Deputy Prime Minister has announced major reforms of planning this week – a consultation on planning decision processes on Monday and now a new National Planning Policy Framework. The consultation paper proposes a national “scheme of delegation” to ensure that more planning decisions are taken by planning officers, rather than by planning committees. The paper also proposes smaller strategic committees to agree documents such as opportunity area planning frameworks, and seeks to beef up training for planning committee members.

The proposals have been widely welcomed as a helpful act of streamlining, which reduces the risk of capricious committee decisions to reject proposals even when they are in line with local planning policy. Such refusals may lead to amendment and a new application, or to appeals to the planning inspectorate, but cause delay and incur cost either way.

For some commentators, this approach is also a helpful first step towards a “zoning” process that shifts the political focus from considering individual applications to agreeing policies and design codes. “Shouldn’t we be aiming for a system which makes [planning committees] redundant entirely?” architect Russell Curtis asked. If proposals comply with policies and codes, they can go ahead with minimal paperwork, though agreeing local plans and policies would become more complex and contested were they to give an automatic green light to compliant proposals.

As ever, London is a bit different. The capital already leads the way in delegating planning decisions and in processing applications fast. The most recent government stats show that in the year to June 2024, 97 per cent of decisions were delegated to officers, more than in any other region. Some boroughs delegated nearly all decisions.

London boroughs work fast too, deciding an average of 93 per cent of major applications within government-mandated deadlines (or other deadlines agreed with applicants) in the two years to June 2024, compared to 90 per cent or fewer in other regions. The capital also has lower rates of decisions being overturned on appeal than most other regions. The system works efficiently.

But it is not enabling the homes London needs to be built. London planning authorities turned down more applications than in other regions: 20 per cent across the capital compared to 15 per cent across England, and as many as a third in some outer London boroughs. Total application numbers are for around 60,000 homes per year, and their number has fallen by a third since 2016, significantly faster than in other regions.

This fall off in planning activity and low rate of approval feed off each other – if it is difficult to get planning permission in London, some developers stop trying or look elsewhere. London’s problems look like problems of policy as well as process.

That is where the new National Planning Policy Framework (NPPF) comes in. It confirms binding targets for local authorities across England. London’s new target is around 88,000 homes per year. That’s higher than the 80,000 target proposed after the general election, but lower than the 99,000 target that the Conservative government set in 2020 (though in 2022 the Conservatives also made targets “advisory”). It is, nonetheless, a huge jump from the current London Plan target of 52,000 homes per year, let alone the average 38,000 net additional homes built over the past five years.

The big policy change in the NPPF is its very careful relaxation of Green Belt rules. The Framework says that if a council is unable to meet its target through using previously developed land and densification, and if it is unable to collaborate with a neighbour to plug the gap, then it can consider using Green Belt land.

It must first look at previously developed land in the Green Belt, then at “grey belt” land which does not strongly contribute to the Green Belt’s core purposes – checking unrestricted sprawl, preventing urban areas merging into each other and preserving the setting of historic towns.

Other rules, relating to affordable housing, new and enhanced green space, design quality and infrastructure provision, still have to be followed, and land that is protected for special scientific interest or outstanding natural beauty, as a “local green space” or as part of a national park is excluded.

Even with all those caveats, the new policy makes London’s edges ripe for review. The definition has helpfully moved on from an aesthetic focus on “poor quality” Green Belt (which may be in entirely the wrong place), to considering whether Green Belt land actually does what it is meant to do.

On the face of it, a lot of the inner Green Belt within Greater London could meet the criteria for consideration: there’s still plenty left to separate London and surrounding towns, and a managed release is not unconstrained sprawl. But governance and geography are tricky: some of the boroughs facing the biggest shortfall don’t have much Green Belt land, and even when they do the land may not meet the government’s tests.

That could be a recipe for mess and disagreement but could also be the opportunity for a metropolitan solution. The Mayor could work with boroughs to marginally redefine London’s edges, to share the load of housebuilding, and to plan for urban extensions that make the most of existing and new infrastructure.

Could that happen? Khan opposed Green Belt reviews in the past (when a Conservative government would have vetoed them anyway), but times have changed. Khan’s 2024 manifesto was silent on the Green Belt, and a London-wide review would be a good way of demonstrating the value of a Labour Mayor to a Labour government, and vice versa.

But Green Belt extensions will not solve all of London’s housing delivery problems. London needs more planning permissions and more building, including of the around 300,000 homes that already have permission. But a viability crisis is holding back both. Former Southwark leader Peter John has argued that affordable housing requirements without sufficient grant subsidy are stifling development in some cases, and pushing up prices of market homes to enable cross-subsidy in others: “a vicious circle of non-affordability is made worse by demanding ever higher levels of affordable housing without some other grant subsidy being provided.”

Other commentators, such as Beacon Partnership’s Steve Beard, have argued that it is the sheer weight of design, carbon offset and infrastructure obligations imposed in London that is making schemes unviable. Centre for Cities’ Ant Breach argues that the London Plan duplicates local plans and suppresses development, pointing to the London Plan review commissioned by the last government, which found “persuasive evidence that the combined effect of the multiplicity of policies in the London Plan now works to frustrate rather than facilitate the delivery of new homes, not least in creating very real challenges to the viability of schemes”.

Given London’s slowing rate of housing delivery, and its stock of permitted but stalled developments, these arguments should be taken seriously. Are the policies that worked in a boom, when rising prices washed away the costs of planning obligations, also the right ones for when house prices are stagnant and delivery is stuck? After the financial crisis, quantitative easing, a cheap pound and open borders helped fuel a property boom, but these engines have fallen silent.

At the same time, affordable housing provision has become increasingly dependent on market housing. Around 50 per cent of affordable housing in London is now delivered as a planning obligation, so when private housebuilding slows, so does affordable housebuilding. Recent Greater London Authority (GLA) analysis shows the impact of this. In 2023, 38 per cent of the homes granted planning permission in London were affordable – a total of 11,725 units. In 2015, only 26 per cent were affordable, but this totalled a higher 14,000 units.

If a system based on cross-subsidy has stalled both affordable and market provision, either policy or funding need to shift. London has an urgent need for more affordable housing, so lowering targets too far seems perverse. But 35 per cent of something is still better than 50 per cent of nothing.

Alternatively, higher grant levels would enable boroughs, housing associations and private developers to build more affordable homes. A recent Centre for Cities report suggests that the government’s £500 million Affordable Homes Programme (administered by the GLA within London) would need to triple in size to get public housebuilding rates back up to their mid-20th Century levels. A tall order, but maybe one that could be justified as an investment to save on long-term housing benefit and temporary accommodation costs.

Finally, central government should recognise that it too needs to be part of the solution. Successive governments’ accumulation of policy prescriptions (including new duties such as “biodiversity net gain”) represent a tax on development, adding to those imposed by local and regional government.

Everything is introduced for good reason, but maybe the time has come for an open discussion of where other policies and stakeholder interests are strangling the government’s declared growth imperative. And, to end where we started, if an application has been considered by London’s elected local authorities and by its Mayor, does Whitehall really need to have a go too?

First published by OnLondon.

Right on target, most direct?

Perhaps the most noteworthy aspect of Angela Rayner’s housing announcement on Tuesday was its tone. Revealing the surprise reduction in London’s annual target, from 100,000 to 80,000, the Deputy Prime Minister said this was “still a huge ask, but I know it is one that the Mayor is determined to rise to and I met him last week about this”. Warm words and a sense of common cause and deals to be done, rather than brickbats, blame games and bunker mentalities. It may be just a honeymoon, but it’s a refreshing change.

What of the changes themselves? Are they an acknowledgement of London’s persistent failure to fulfil its potential or a token of a more reasonable ambition? The first thing to note is that London’s target is still more than twice the capital’s historic delivery rate – averaging 38,000 homes in the three years to 2022/23 – and requires a much higher jump from these rates than is expected from any other English region. It also represents more than two per cent of existing stock being built every year, which, as Jim Gleeson shows, is a much bigger ask than in any other region. London contains 16 per cent of England’s population, yet is still being asked to contribute 22 per cent of its new housing.

The reduced target should not be seen in isolation either. As Nick Bowes has observed, the new housing targets reflect the challenges of accommodating London’s population growth within its boundaries – challenges that were noted by London Plan inspectors ten years ago. South East England’s annual target has risen by the same number as London’s has fallen, with particularly sharp rises in some areas on the capital’s periphery.

The new targets could be said to reflect the reality of London being part of a southern conurbation, rather than a city alone. It will be interesting to see whether the New Towns Taskforce proposes urban extensions that straddle the M25 to help meet this combined need, and to see how London and surrounding local authorities might work together on these.

There are some anomalies within London too. Targets have been halved for the eastern boroughs of Tower Hamlets, Newham and Barking & Dagenham, even though these areas have been the policy focus for London’s growth for two decades and accounted for more than 20 per cent of its new homes in the last three years. On the other side of town, Kensington & Chelsea’s target has trebled, reflecting the impact that high house-price-to-earnings ratios have on how targets are generated.

We can expect these quirks to be ironed out as city-wide targets are fed through to borough targets in the new London Plan. The bigger question is whether London has any chance of actually building 80,000 new homes a year. Recent indicators show that build rates are still struggling to recover to pre-pandemic levels. Registrations of energy performance certificates for new homes, usually taken as a leading indicator of housebuilding, numbered 36,000 in the year to June 2024 and have been falling since 2021, though may have started to turn round in the past six months.

The big problem, as On London recently reported, is not planning permissions – London has planning permission in place for 300,000 homes – but the money, materials and muscle to build them out. The government has had less to say about this so far. There is a reference in the Rayner’s speech to allowing the Greater London Authority more flexibility within its Affordable Homes Programme, but this only helps supply a small proportion of homes in the capital.

In the medium term there may be more policy support and more money. Funding for infrastructure and affordable housing might be found as fiscal conditions improve, skills shortages may ease and changed perceptions may bring more investment to London and the UK. The National Planning Policy Framework consultation also starts to grapple with one of the knottiest issues in development: how the land market can be better managed to stop inflated value expectations making development unviable.

Meanwhile, London’s housing affordability challenges persist. The lowered housing target has been criticised, including by some of the YIMBY activists who have been the loudest cheerleaders for the government’ town planning reforms, but it is a nod towards realism about the scale of the task facing London.

Maybe the Mayor, boroughs and government can join forces with developers to double London’s building rates. It’s a Herculean task, but the will to work together is there, even if resources remain sparse. When London gets near to building 80,000 homes a year, then we can start debating whether 100,000 would be a better target.

First published by @OnLondon.

Get Britain Building Again…again

The 2024 Labour manifesto stands in curious contrast to the Conservatives’. Rather than wacky suggestions for turning inner London into Paris, we have a document with more than 130 mentions of “change” but tantalisingly few specifics about how this change will be realised. A Labour government “will introduce effective new mechanisms”, “will strengthen”, “will take steps to ensure”, “will review”, “will work with partners to drive”.

You have to think/hope that the Labour front bench has some idea how they will actually achieve these aims, but they are certainly not telling us what they are – understandably so when they are riding so high in the polls and staring down queasily at the rocks below.

On housing, the target of 1.5 million new homes over the next Parliament is 100,000 less than the Conservatives have pledged to “deliver”, but still way ahead of build rates in the past 25 years. With the exception of a crowd-pleasing stamp duty surcharge for foreign buyers there is not much detail, but the manifesto does sketch out some of the bottom-up carrots and top-down sticks that will “get Britain building again”.

These carrots and sticks are presented as working together in single-minded pursuit of Labour’s mission to “kickstart economic growth”, but you can see some internal tensions. There will be more money for planners, but also tougher sanctions where local plans are absent or outdated. Communities will shape housebuilding, but a Labour government will intervene where necessary. Development will be “brownfield first”, but there will also be a “strategic approach” to Green Belt designation and release. There will be new towns, but planned and built in partnership with local communities.

There is a commitment to “exemplary development” and a careful pledge that, in some cases, compulsory purchase prices will be based on “fair compensation” rather than on the values that could be achieved once planning permission is granted. The Levelling Up and Regeneration Act introduced limited provision for this at the discretion of the Secretary of State, so Labour would presumably extend this. A wider application will be particularly important for new towns or planned urban extensions in the Green Belt, where unknown speculators are rumoured to buy up options on “strategic land” in the hope of untold rewards if planning permission should ever be granted.

Metro Mayors and combined authorities will be given a role in planning for housing growth, perhaps modelled on the powers that the Mayor of London has today. This looks like a good way of bridging between the central and local priorities, but could also create clashes between elected Labour Mayors and an elected Labour government. Sadiq Khan has already taken a stronger line against Green Belt development than the Labour leadership does, and the London Plan has been criticised by Michael Gove’s department for overloading developers with planning obligations. There are good reasons to be optimistic about what Khan can achieve with a Labour government, but there may still be storms ahead.

Renters will get protection from unfair Section 21 eviction and arbitrary rent rises (as promised but not delivered by the Conservatives). In addition, the manifesto pledges “the biggest boost in social and affordable housebuilding in a generation” – somehow achieved with existing Affordable Homes Programme funding – and to reduce the scope of Right-to-Buy.

The flagship policy to help first-time homebuyers – a mortgage guarantee scheme to reduce the deposits needed – is not described in any detail. However, if it is anything like the one introduced by the current government in 2021, it will have limited impact in London: buyers still need to put down a minimum five per cent, which can easily be £20,000 or more in the capital. Recent government statistics show that the scheme was only used by around 1,500 London first-time buyers (with an average household income of £95,000) between April 2021 and September 2023, fewer than any other English region. The deposit gap will remain a huge challenge for many Londoners.

This general election campaign has been odd in many ways, and the main parties’ manifestos underline this. The Conservatives’ document reads like a challenger’s – full of shiny, eye-catching initiatives gleaned from think tanks and special advisors. By contrast, for all its change-y vibes, Labour’s is cautious, sensible and careful not to leave a flank exposed to enemy fire, but with some inherent tensions half-glimpsed beneath the surface.

Serious discussion of London and its problems is absent from either manifesto (Labour only mention the capital twice: once as a case study voter’s workplace and once as the party’s postal address), but this may not be a bad thing after a decade when the capital has been used as a general purpose scapegoat for everything from regional inequality, to Brexit division, to populist discontent. Maybe that type of debate feels a bit beside the point given the challenges the whole country faces today. It would be good if we could use this election to move beyond it.

First published by OnLondon.