Only local government can break the developer’s strangle hold on the housing market

Copied from Sunday Telegraph Sunday 16 April 2017

Economic Agenda
The key to opening up the housing market

By Liam Halligan

For decades across much of the UK far too few homes have been built. The average house now costs almost eight times annual earnings – an all-time record. In London and the South East, of course, this ratio is even higher.

Much of “generation rent” is simply unable to buy a home. For millions of youngsters, even those with professional qualifications and good jobs, property ownership is an ever more distant dream. Ten years ago, 64pc of 25 to 34-year-olds, the crucial family-forming age group, owned their own home. In 2015, it was 39pc.

Three fifths of an entire generation of young adults is locked out of the property market. Over half of first-time buyers get assistance from “the bank of Mum and Dad”, rising to two thirds in the South East. The housing market, once a source of social mobility, has become a source of growing resentment.
Part of the solution, as we so often hear from our politicians, is to “get Britain building again”. Yet the March PMI construction index, which monitors the UK’s leading building firms, last week pointed to a housebuilding slowdown. During the final three months of last year, 2pc fewer new homes were completed in England than the same period in 2015.

Over 2016 as a whole, while the construction of 5pc more homes was started than the year before, the number of new-builds actually completed was 1pc lower. Just 168,000 new-builds came to market across the UK as a whole in 2016 – way below the 250,000 needed annually to meet demand. The UK has built, on average, 100,000 too few homes a year since the 2008 financial crisis. For decades before that, housebuilding was also too low. The last time we did build a quarter of a million homes was back in 1980 – and 113,000 of those were council houses. With council-housebuilding now barely a few thousand each year, the UK’s housing needs are largely reliant on the private sector.

Although few homes are built, the UK’s three largest developers still report surging profits. Barratt saw a 40pc rise to £295m during the second half of 2016 – despite completing fewer homes. Taylor Wimpey made £733m last year, up 22pc. Persimmon’s full-year profits were £775m, 23pc higher.

These three developers now build a quarter of all new homes, with the eight largest accounting for over half. Small developers, suppliers of two thirds of new homes in the 1980s now build less than a quarter. It’s hard not to conclude the big housebuilders, who control so much of the land granted planning permission, are deliberately building slowly, to keep prices and profits up. Waiting to build creates a shortage and means their extensive land holdings also rise in value.

The “big developers” have “a stranglehold on supply”, said Communities Secretary Sajid Javid, at last October’s Conservative Party conference. They are “sitting on land banks”, while “delaying build-out”. The House of Lords economic affairs committee has also weighed in, saying the UK housebuilding industry has “all the characteristics of an oligopoly”. These two statements alone, in my view, mean our competition authorities should take a closer look. The UK’s housebuilding giants deny any go-slow, of course.

When the long-anticipated housing White Paper was published in February, some of us were disappointed at the lack of bold measures. While admitting “the UK’s housing market is broken”, there was no mention of a previous pledge to build a million new houses by the end of this Parliament – so, by 2020. That’s probably because, in the words of Paul Cheshire, a professor at the London School of Economics and probably the UK’s top housing academic, there is “more chance of me living on the moon”.

‘It’s hard not to conclude the big builders are deliberately building slowly, to keep prices and profits up’

Since the White Paper was published, though, having followed various behind-the-scenes struggles across Westminster and Whitehall, I’m pleased to report a little-noticed development that may soon help unlock UK housebuilding.

This column has previously called for the creation of powerful Housing Development Corporations (HDCs) – state-initiated bodies that acquire land, grant themselves planning permission, selling on the land in parcels to private developers. The HDCs then use the “planning gain” from the sharp rise in land value to fund new schools, hospitals, roads and so on. If new housing means local public services are significantly enhanced, there would be far fewer objections from existing residents. Variations of this model have been successfully used in countries from Germany and Holland to Singapore and South Korea.
Under existing “New Towns” legislation, national government can set up HDCs – which, crucially, can buy land at “existing use” value. Arable land, for instance, is purchased as arable land, bringing a healthy upside once residential planning is granted – guaranteeing ring-fenced cash for extra local infrastructure. That’s far better than current “Section 106” negotiations, under which powerful housebuilders hold most of the cards and often spend less on local amenities than councils expect.

What’s new and interesting is that an amendment has been made to new housing legislation allowing local government, with central government permission, to set up HDCs. Councils can buy land for a large development, partnering with the private sector if needs be – but, crucially, the planning gain receipts stay at the local level.

Such cash can then be used to build local amenities or even give residents a council tax rebate, which should make housebuilding much more popular.

This could massively empower local government, while finally sparking the housebuilding the UK so desperately needs. “If councils are considering a sizeable development,” says an insider at the Department of Communities and Local Government, “they should give us a call”.

Seems I could become one of the last planning committee chairman under this government’s plans

Housing bill amendments branded ‘privatisation of planning’
5 JANUARY, 2016 BY DAVID PAINE

Copied from Local Government Chronicle online
Concerns have been raised that the government is privatising the planning service after it tabled a number of major last-minute changes to the Housing and Planning Bill.

Amendments put forward by the government this morning include plans to let developers choose who processes planning applications.

Also planned are changes to let local authorities set their own planning fees, a new section 106 dispute resolution process, and giving ministers the power to force councils to sell off land.

MPs are due to debate the bill, and 100 pages of proposed amendments, in the House of Commons this afternoon.

New clauses proposed by communities secretary Greg Clark will allow planning applications to be processed by an approved “designated person” if an applicant “so chooses”. While local authorities will still be responsible for the final decision on any planning application, regulations will in due course outline the circumstances under which an external recommendation by a “designated person” will be “binding” on a local authority.
Hugh Ellis, head of policy at the Town & Country Planning Association, called the amendments “extremely controversial”.

“It raises the prospect whereby the advice of a private consultant on a planning application could be more or less binding on a planning committee,” Mr Ellis told LGC. “You don’t have to be a rocket scientist to work out that what’s happening here is a fundamental assault on the public interest objectives of planning.”

A part of the amendments will force local planning authorities to share relevant information, such as the planning history of the land to which an application relates, with the designated person as well as the communities secretary.

Mr Ellis called the amendments “very worrying” and added: “People have talked about the privatisation of planning services and I think that’s probably what this is.”

He added: “I do wonder if people, particularly local councillors, who haven’t got their heads stuck in the Housing and Planning Bill will wake up to a particularly nasty shock over what this legislation has resulted in overall.”

Another government-proposed amendment will let councils locally set planning fees. The District Councils Network has repeatedly called for that, and in a briefing document on the latest amendments the Local Government Association voiced its support.

However, the proposed wording of the legislation gives the communities secretary the power to “prevent the charging of fees that he or she considers excessive”.

Plans to amend the Local Government, Planning and Land Act 1980 and give the communities secretary the power to direct councils, and other public authorities, to dispose of the land they hold were condemned by the LGA.

“Councils are best able to manage locally their assets to meet the needs of communities and are on track to bring forward significant levels of development on their land up to 2020,” it said. “Local authorities should retain the flexibility to manage their own assets.”

Another proposed new clause would give the communities secretary the power to impose “restrictions or conditions on the enforceability” of how many affordable homes, including ‘starter homes’, local authorities want built on a site.

The LGA said that should be for councils to “determine locally”.

The LGA also expressed concern over government plans to introduce a new dispute resolution procedure in relation to section 106 negotiations. The amendments will allow for an appointed individual to oversee disputes.

“Strengthening requirements for the upfront negotiation of S106 agreements would be a more effective means of avoiding delays than offering an alternative route for resolution,” the LGA said.

Independent candidates fire blanks

bazookaThe two independents candidates, standing against myself and Christine Lawton on 7th May in the district council elections, have delivered their first election leaflets.

As always, leaflets from the opposition are essential reading, if only to understand where they are coming from campaign wise. In the case of these two, there are few if any surprises. There are however some clear misunderstandings when it comes to what can and cannot be achieved as a district councillor, but given that they are new at this, it’s understandable. I am however, not so understanding as to allow them to pass without comment, this is after all politics and there’s an election to win.

I’ll deal with their suggested policies first, before dealing with the ever present irony that is the ‘Independent Group’, to which they have attached themselves.

These are from the first ‘independent’ candidate’s leaflet.

1. A temporary cut in business rates to encourage small businesses.

Setting the business rates is not a district council function and cannot be done. The best we can do, is offer discretionary relief to a limited range of activities, such as the only pub in a village, a small village shop, or a non-profit making social club venue.

2. Waste and recycling collections to stay weekly

This has been the Conservative group’s position since it took control in 1999 and this has not changed.   Neither can it change in the near future, as we accepted grant funding from central government on the basis of retaining weekly collections for at least 5 years and we’ve no intention of giving back the £1.7m received!

3. A really good garden waste collection to serve gardeners in the town.

You wouldn’t intentionally offer a really bad garden waste collection, would you?

Only in the town, what about everybody else? What about every other town come to that?   This independent candidate is beginning to think and sound like a parish councillor already.

We are already working on a paid for green waste collection. This needs a significant outlay in capital and a more detailed survey, to identify potential users, will be carried out soon.

4. Make our environment as litter free as we can …….not just in run up to election…

Can you call a campaign that has been running for nearly 9 months, an election ploy? I think not. Had central government confirmed the local government finance settlement at the normal time and not the eleventh hour and 59th minute, as they did, we would have been able to start the South Holland Pride campaign some 12 months ago. This was the plan, but we could only find enough funding to appoint a part time enforcement officer at that time.

5. Better community policing

Yet another area over which the district council has no control. Lincolnshire Police raise their own precept via the council tax. This year that was increased by 1.9% to £197.64 SHDC’s council tax take was reduced by 0.5% to £154.84 for a band D property.

6. Better value for money when looking at provision of services….

I’d love to comment on this one, but I haven’t got a clue what its referring to!

7. More thought to planning applications, so that they benefit the town and not just the applicant…..

This is another one that’s got me guessing at to its meaning, let alone its ambition. The planning system isn’t there as a way of getting goodies, from the people who apply for planning permission, unless those ‘goodies’ are essential to making the application acceptable in planning terms.

Moving on to the second ‘independent’.

This one makes some pledges which reflect some double standards and a clear misunderstanding of what the overall role of a district councillor is.

1. I will not have any hidden agendas

My personal experience says otherwise.

2. I will work with any councillor…………..acting in the best interests of Wygate Park and Spalding!

Just because the ward is called Spalding Wygate, doesn’t mean it just covers the Wygate Park area, where this candidate happens to live.

As well as being limited to half the ward, the horizon of this independent only stretches as far as the boundaries of Spalding it seems.

As a district councillor, your role, first and foremost, is to represent the interests of all South Holland residents, not just those who voted for you, or happen to live in the ward you represent. This applies even when a decision might have a negative impact in your ward.

Some of the issues this candidate will support.

3. Pride in South Holland. My answer to this claim is the same as for the other independent and our manifesto actually contains a commitment to continue the campaign.

4. Highways – poor state of some pavements. This is a county council function. You don’t need to be a district councillor to get these fixed. Just report them on line, I do so regularly.

5. Road safety – road markings. Again, a county council function, not the district.

I submitted a defect report on these makings over 12 months ago. The answer from highways was very clear. It is not their policy to maintain any form of road markings within residential estates, when those roads only serve residents and have no other purpose, as this would not be a good use of their limited budgets. The road marking in question were put there by the developer, during initial build and were never a requirement of the detailed plans approval, or of the highways adoption process.

6. Community – Support for events…………Nothing new here, as all Spalding councillors have made financial contributions to such events.

7. Traffic – Stating the blindingly obvious here.  Again, something only the county council can rectify. Spalding Town Forum are already extremely active in pressing for a solution.

8. Planning – local services must keep pace.  Nothing offered here, other than a statement of wishful thinking. The planning system has no powers to require developers to provide funding for local services as a matter of law. Everything we achieve, outside of the planning policy requirements, is done by active negotiation and persuasion.

9. Licensing policy changes – another piece of wishful thinking, without any consideration of the reality. Like planning, the licensing system is controlled by national laws and policies, that offer the district council little leeway when it comes to resisting the granting of new licenses.

Now turning back to the various claims made about being unfettered and un-whipped independents.

The back of both very similar looking leaflets, has the same heading and the same piece of text, ‘A message from Angela Newton……..Independent Councillor and Leader of South Holland the Independent Group.’ ……………….

So, having declared themselves as intending to be, ‘Independent Councillors’ (sic) and not tied to any Political Party (sic) (they do like their capital letters don’t they!), they willingly attach themselves to somebody stating that, they are actually the leader of a group of independents. Using the word group and independent in the same sentence is an oxymoron isn’t it?

Splitting hairs, you could argue that Angela Newton is not leading a recognised political party, but it is very clearly a group involved in politics, making it, at the very least, a political group and therein lies the irony of the claims trotted out be these so called independents.

Just to add insult to injury. This non-group, group of independents, hold group meetings before full council meetings, in exactly the same way as the Conservative group do, but somehow they manage to make them last even longer than ours and there’s only twelve of them compared to 25 of us!

It must be all the effort required to be totally independent of each other, that makes their ‘group’ meetings last so long.