IS THE PLANNING SYSTEM WORKING?
Reflections following attendance on behalf of the Trust at a joint meeting of the All Party Parliamentary Groups on Civic Societies and Local Government, held on 7 June, jointly sponsored by Civic Voice and the National Association of Local Councils..
Participants included Scott Mann MP, Baroness Parminter, Lord Porter, Clive Betts MP, and Craig McKinley MP.
The meeting was held in response to the passage of the recent Housing and Planning Bill, which pushes Neighbourhood Plans up the political agenda while failing to include a right of appeal against planning decisions that over-rule Local or Neighbourhood Plans. Baroness Parminter had campaigned hard for a right of appeal and she promised the campaign would continue. The promotion of Neighbourhood Plans fits with a localism agenda, but when these plans can be overruled on appeal by a centralised authority, the power of local decision making is diminished and one is bound to wonder what the real agenda is.
Lord Porter expressed support for the NPPF (National Planning Policy Framework), which he thought had been intended to provide a stable planning framework that put local communities at the heart of local government. Both he and Clive Betts expressed concern at continued Government tinkering with the planning system which, contrary to the aims of those who worked on the NPPF, creates instability in the system. It was admitted that while the outcome of the NPPF was a reasonable policy framework, the motivation for it had primarily been the thought that planning reform was crucial for economic growth. This would be the case only if the planning system were a significant obstacle to economic growth, for which there is little evidence; certainly its reform cannot on its own bring about such growth.
Continued meddling with the planning system seems to be driven primarily by economic concerns linked not just to growth, but also to the housing market, the increasing number of people who are priced out of that market, and the need for the UK to provide 250,000 new homes each year just to keep up with demand - a target that no government has achieved without direct intervention. Free market theory would see this simply as a matter of supply and demand: there is too much demand so prices are too high. The solution must therefore be to build more homes and the Government blames the planning system for the lack of house building. However, if it is not the planning system that is the cause, tinkering with it will not solve the problem.
As Clive Betts noted, there are 470,000 outstanding planning consents in place in England and Wales, which strongly suggests that gaining planning consent is not the issue. As the law of supply and demand would also suggest, large developers will not see it as being in their interest to bring too many houses onto the market in a single year as this would increase supply, drive down prices and decrease the value of their land (with planning permission attached). Moreover, no government, including the current one, has wanted to see house prices fall by a significant amount. The selling on of subprime mortgages into the derivatives market in the US was identified as a prime cause of the economic collapse of 2008. This left many people with negative equity in their homes and many being repossessed for resale at knock down prices. When this happens to a big swathe of the housing sector, mortgage lenders find themselves in financial trouble, which is why mortgages have been harder to get after 2008 and why rules about deposit requirements were tightened.
Government initiatives that relaxed some requirements for first time buyers, or buyers of new homes, have the effect of increasing access to the market while keeping house prices high – not making houses more affordable by reducing the price. The effect of more recent fiscal measures aimed at reducing incentives for buy-to-rent and increasing the costs of second home purchase and sale has yet to be seen, but many say that this will merely mean increases in the cost to rent in a sector where rates are already high.
This is why some agree with Clive Betts in thinking that the provision of more affordable rental properties and more social housing is a better solution, arguing that there have only ever been significant increases in housing supply when state or local government have been involved in providing it. The free market, and reliance solely on free market ideology, cannot deliver because it cannot sufficiently incentivise increases in housing supply without driving down house prices. Governments want the former and fear the latter.
When one looks at house prices, and housing demand at a more local level, it can be seen that it is very uneven across the country and across districts. Cornwall's issues with second homes are not the London commuter belt issues of affordability. It is at the local level that the reasons behind the fluctuations need to be teased out with appropriate policies developed in response, which is why Neighbourhood Plans are useful. But who will be willing to put in the effort to develop a good Neighbourhood Plan if it can be overruled on appeal?
What can also be seen, taking Winchester as an example, is the glaring inefficiency of having one body (WCC) responsible for planning of buildings etc., and another (HCC) responsible for roads and traffic within the city and district. Decent urban development for economic growth (which requires both housing and jobs) needs decent urban planning, and this in turn requires the ability to plan for buildings and for roads and traffic flows (as well as other aspects of infrastructure). So if Neighbourhood Planning is really to work it needs to be able to incorporate all these elements, implying radical, structural changes to the planning system, not tinkering around by removing controls here and adding fiscal measures there.