Henry Higgins: How to fix London’s broken planning system

Cllr Henry Higgins is the Chairman of Planning in the London Borough of Hillingdon.

It is no consolation to say that 150 or even 100 years ago, in London, we built some of the most beautiful and practical streets of houses that the world has ever seen and which are still the envy of anybody: not just of people looking for a house here, but of people of most cities in the world. We seem to have lost the ability to do that.

We have national and a citywide recognition of the need to keep building more houses and places to live, but we struggle to fulfil that clear purpose. In some boroughs, government policy requires that we build as many as 2,000 new homes each year, but such targets are rarely, if ever, achieved.

There are practical reasons why these failings happen and we need to understand them.

It is a builder who builds a house, not a politician. People and politicians may want houses, but the prospect and the project have to be practical for the builder who will do the work.

For them, that means:

• A space to build.
• Preparing the design and architecture.
• The ability to connect to services, like water, drains, gas, electricity, roads and so on.
• Employing the skilled labour and sourcing the materials.
• The approval of the local community and understanding their needs.
• Finding a customer who will buy the completed work.
• Engaging in whatever the legal and formal requirements are.
• Funds to carry out all that expensive work while it is in progress.
• An investment in which they will undertake financial risk, but that makes sense for them and meets their own criteria for approval.

We often describe a person, or an enterprise, who engages in these in the successful pursuit of these activities at scale, ‘a developer’

The motivations for building houses are quite simple to understand

• People want places to live, go to work, raise their families and enjoy living their lives in one of the best cities in the world.
• Builders and developers want to participate in the architecture and quality of life in the city and make good return on the investment they need to make.
• Politicians want to build houses but they also need to protect people both from exploitation and unsafe conditions, and to make their contribution to the quality of life in London. They need to make sure public money is properly spent and to guard against unfair monopolies affecting the prices people pay.

For all three of these there is an abundance of understanding, desire and demand.

Politicians have a responsibility to play certain roles in all this. They have to take certain actions expeditiously and to be able to leave some things alone for builders and developers to do and for individual people and their families to decide.

Helping to identify those, and particularly, improve the way political bodies handle them, is the purpose of this paper. I will refer to both private builders and developers as ‘developers’, to keep the discussion simple.

What goes wrong?

Developers are reluctant to meet the requirements needed for approval

Consents and permissions: The requirements and conditions for obtaining approval to proceed are sometimes uneconomic for developers and there is insufficient help to make the development practical.

The market price: The price people are able pay at that time to buy or rent their house or flat may be too low to make the investment viable.

Social Housing: Both local and national government may place requirements for social housing such that the price people pay for a significant number of the houses or flats being developed is below the market level to meet reasonable investment criteria for the whole scheme.

Developers receive approval to build, but delay before proceeding.

For a developer, obtaining the permissions to proceed with a plan is only one of the hurdles they face to beginning, let alone completing, building work. For a council – granting the permissions does not imply the work will be complete.

Across the UK there are 1.2 million approvals for house building that have not been completed. In some London boroughs there could be as many as 3,000 more houses today if developers acted on existing planning approvals.

The delays can occur because:

• Conditions were applied when obtaining planning consents which are difficult, expensive and time consuming to meet.
• The engineering infrastructure of connections to services, communications and transport does not exist at the site and will not be available when the houses are ready to be sold.
• Other social and environmental issues have not been resolved – there are no shops, or schools or green spaces to make an attractive area, the lack of which in turn diminishes the value of the new houses.

There is confusion and lack of coordination between the different tiers of government

Londoners have three levels of government: the borough in which they live and which collects their council tax; the mayor of London; and central government, all of whom take an active interest and play roles in the project to build more houses.

This relationship has good intentions, but it does not always function well for the benefit of local people or the developers whose investment and professional skills are needed. It is a serious issue.

There is a need for clear financing of both the administrative functions of councils and the long-term building and maintenance of infrastructure; and often that does not occur.
Sometimes adjustments to central government financial policy impede the necessary processes of development. The government need to know when this happens and deal with it
Sometimes the Mayor’s office causes conflict with local borough councils. The mayor’s office need to be vigilant in watching for this and prevent it.

As in all politics, the ambitions of the individuals and their offices sometimes take precedence over the actual needs of people. That needs to be said and such occasions quickly stopped.

Recommendations

• Local borough councils should be allowed, by the Treasury, to retain and use more of the Business Rates collected in their area. This not only would provide more funding, but it would be an incentive to increase local business activity, improve the connection between business and the council, and grow the use and renovation of local business property.
• We have to treat ‘social housing’, which means housing for people who struggle to afford market prices, as a key to economic growth; and we have to make it work. It provides the opportunity for people to work in London who would not otherwise be able to do so. The provision has to be implemented in such a way that it does not create a disincentive to developers
• We should abolish ‘Stamp duty’ on primary residences. It raises the cost of purchase of a property and acts as an impediment to the sale of newly built homes- which is an essential requirement of development.
• It is completely wrong to remove the ‘Community Infrastructure Levy’. This proposal, by the Mayor, is a very serious mistake. We have to improve our management of the construction and maintenance of essential infrastructure. We don’t have an effective way of building in a timely and affordable way all the services and communications that are needed. Some of this is for London boroughs to resolve, some is between boroughs and some of it is for councils in the areas surrounding London. It may include more small towns outside London. At present the levy is our best way of funding this work.
• We should encourage small infrastructure developments because we know that large scale ones always present problems that take years to resolve. ‘Small scale’ means local schools, shops, GP surgeries, libraries, parks, road improvements and so on: all the facilities that make life agreeable and enjoyable.
• The proposed ‘Homes for London’ initiative as it is written, is wrong. It calls for, and permits, a reduction in the standards of home building which we have established over decades. We should not build houses without proper light and space between them. Nor should we build ‘tower blocks’. We have learned that these developments present so many social problems, it is foolish to think those will not recur as the buildings age.
• We need quickly a ‘Fair funding review and formula for London Boroughs which is practical, cross party, long term and pragmatic – genuinely intended to meet the needs of local people.
• In all our work we need to recognise and assist developers who make the investment in house building and take the financial risks that go with their projects. If we are to build homes we have to make it as practical as possible for developers to do their work.
• People do not want conflict between the Mayor and the local borough councils, they want humble, effective, cooperative working that is simply for the benefit of Londoners.

It is easy to understand why central government should urge the Mayor of London to drive an increase in house building, however it is wrong, and a complete misunderstanding, to deploy ‘special powers’ to assist in his achievement of targets. The initiative that is needed is closer working with, and assistance to, each Borough to help THEM to meet their required levels of building.

To be very specific, London has the space to build over 460,000 homes on ‘brownfield’ sites. A programme to simplify the release of that space by London boroughs for practical development would be transformational. Our experience is that the conditions placed by the Mayor on brownfield developments are counterproductive. In contrast, it is profoundly unwise for the Mayor’s office to designate ‘greenfield’ space for which they are not directly responsible for building. It is bound only to cause local problems for the councils involved. It should be stopped.

The proposal to grant the Mayor expanded emergency powers is extremely troubling. “Temporary” measures often become permanent. What begins as an ‘emergency response’ risks becoming a new normal lower standard, with inadequate infrastructure funding, and communities built without supporting services.

The people of London don’t want that; there is no need for it and it will be regretted for generations.