Britain - Planning reform: strangled by a green belt?

Oct/Dec 2011

The critical shortage of affordable homes has become the excuse for a whole host of new government legislation - which does anything but solve it, and is not meant to solve it, but certainly is meant to make real estate developers very happy.

The latest government proposals are in the form of a "National Planning Policy Framework" draft document, published this July. Quite simply, this framework is meant to speed up planning applications from builders and developers, by cutting the so-called red tape - in this case 1,000 pages of planning law dating back to 1947, to just 52 pages!

The only problem is that the intention seems to be to allow developers to build just about anywhere except designated national parks! Whoever drafted it (Eric Pickles? Mischievous civil servants?) seems to have ensured that it will upset the maximum number of people and organisations, right, left and centre, political and otherwise, from the Royal Society of the Protection of Birds, the Campaign to Protect Rural England, to the Tory-supporting Daily Telegraph newspaper, which has even launched its own "Hands off our Land" campaign! In fact in its consultation phase, which just ended on 17 October, the draft attracted a record 10,000 responses.

The draft not only threatens the English countryside, green belts and so on, but it is also deemed entirely unnecessary.

Delays and planning "red tape" may be a familiar complaint from business, especially the property industry. But the reality is that 80% of all planning applications are granted permission, and 90% of those applications for development classed as "major". Moreover, by the first quarter of 2010, the Department for Communities and Local Government reported that 70% of such major applications were decided within the target time of 13 weeks. So no delay there! This year, for the same quarter, this had fallen to 62% - but this is more than likely to be due to the government shooting itself in the foot with too many job cuts!

And what about the fact that as many as 330,000 houses have already had planning permission granted, but have not been built? For sure, this is ample evidence that planning laws are not responsible for the shortage of homes, let alone affordable homes!

Quite obviously, if the government was actually concerned about the homeless as it asserted when introducing the National Planning Framework in parliament - the minister gave this as the main reason for his proposals - then one has to wonder why it does not do something much more simple - like bring into public use the 750,000 homes estimated to be long-term empty!

Planning policy and state intervention

It is worth going back for a while over the background of today's planning system. Government intervention in the use of land has a long history. But it was only in the 1870s that Parliament began to legislate powers for local authorities to intervene in development, allowing (but not requiring) town councils to set standards of space for new streets and the houses along them. After World War I a national set of standards for space inside and outside of new housing, including a minimum of three rooms per floor, was adopted on the recommendation of the Tudor Walters report, which also recommended that government take a lead in a post-war house-building programme.

There remained little legislation, however, for the general planning of land use over wider areas before World War II. In this period most British cities, even in depressed regions, expanded enormously, at much lower densities than before, but little credit for this is due to planning or even public intervention.

A Town and Country Planning Act in 1932 allowed local authorities to prepare "planning schemes", but again did not require them to. This Act anticipated that the schemes would set out a plan for development that the local authority intended to carry out itself, probably involving local private construction contractors. The 1930s also saw central government take on the costs of building modern industrial estates in some of the areas worst affected by the depression, at Treforest in South Wales, Team Valley at Gateshead and Trafford Park in Manchester.

The legislation which was introduced by the post-WWII Labour government was designed to resolve the acute housing crisis causes by wartime destruction.

The New Towns Act 1946 designated 7 new towns around London, appointing development corporations to acquire the land, draw up the master plans and supervise construction and planning for 25 years. Then a 1947 Act created much of the planning system which was inherited by the present government. In that Act, the "presumption in favour of development" was consciously included so that as many houses as possible would replace those bombed out during World War 2. There was an acute housing shortage, after all.

It was only then that the state assumed the right to develop land, and the need to apply for planning permission became general. The planning authorities thus created were the existing counties and the county boroughs, the equivalent of today's unitary councils. Some specified minor development rights were immediately delegated back to landowners, for instance the right to extend a house by up to 15%.

This state monopoly of development rights was wholly uncontroversial in 1947, like much of the Attlee Labour government's other social legislation. It was based on the recommendation of a cross-party committee established under the wartime government.

Much valuable arable land had disappeared under housing developments only a few years earlier. In fact, a major market-gardening area disappeared under Heathrow Airport. Henceforth agricultural land was to be graded according to fertility, and the grade would be one of the "material considerations" which planning authorities would have to take into account when determining applications for development on previous farming land. The principal material consideration was to be the "development plan" for the area, which now became a mandatory requirement.

1947-97 - going full circle

There were only very subtle differences between the two main parties regarding large-scale projects for meeting post-war housing needs. Both Labour and Tory accepted that government must take a firm lead in meeting them. A period began in which house-building figures became a regular point of competition between the parties on election posters. Along with wholesale reconstruction of bomb-damaged or worn-out working-class areas in cities, came a massive state programme of decentralisation of population and employment to smaller towns. This also gave a continued boost to some of the large construction firms like John Laing, that had been built during the interwar period, and had survived on wartime construction projects.

Later on, as the postwar crisis was becoming less acute, differences between Labour and the Tories began to emerge, not because they were defending different social interests, but because the Tories were more responsive to British business' increasing dislike for a state intervention which it considered less indispensable and did not deliver exactly what it wanted. These differences crystallised around two issue in particular.

One of these issues was whether landowners should be charged or taxed by the government for the increase in value that the granting of planning permission conferred to their land. To this end and to the landowners' great displeasure, the 1947 Act introduced a Development Charge. Subsequently, however, this issue led to a sort of tit-for-tat between the two parties: when the Tories came back into office, they repealed the charge introduced by Labour; and when Labour returned, they reinstated some form of charge. Finally, after Thatcher repealed once again Labour's charge, her successor John Major broke the traditional tit-for-tat pattern by giving local authorities the power to grant planning permission in return for landowners agreeing to make payments towards the cost of local services and infrastructure.

Of course, by the time Labour returned to power under Blair in 1997, there was no longer any question of taxing any gains which might be linked to developmental planning permission and the tit-for-tat over this issue came to final end.

The other issue over which Labour and Tory had some differences arose from the New Towns Act 1946, with the centralised, long-term planning it involved. When the Tories came back to power in 1951, they could not just reverse Labour's New Towns Act. Instead, they introduced a scheme of their own called "Expanded Towns", whereby Treasury money was made available for development schemes to be proposed and managed by existing local councils, in agreement with large urban authorities. Swindon and Basingstoke, where much of the new housing was designed by the London County Council and inhabited by Londoners, were the biggest examples. Then, under Harold Wilson, Labour returned to a modified New Town model, mostly based on larger centres like Peterborough and Warrington. But this generation also included Telford and Milton Keynes, where large new town centres and extensive housing filled the gaps between existing towns.

Needless to say, when Blair's came into office the very idea of large-scale public urban development was just out of the question.

"Sustainable" isn't sustainable

Going back to the present government's plan to replace the existing 1947 legislation, how is its own framework meant to operate? In fact it is really just an elaborated adjunct to the Con-Dems' "Localism Bill", introduced last December, which, in the government's own words "seeks to:

Give new freedoms and flexibilities for local government; give new rights and powers for communities and individuals; reform the planning system to make it more democratic and more effective and make reforms to ensure that decisions about housing are taken locally....The Localism Bill contains proposals to make the planning system clearer, more democratic, and more effective"

Making everything "local" by decentralising and removing "state interference" is of course the Tories' pet theme, as is getting rid of regulations - "red tape". But of course, all this rhetoric about individual and communities getting powers is only there to cover the main purpose (anyway there is no mechanism for empowering people locally!), which is first, substantial cuts in the present resources allocated to planning (central and local government, Environment Agency, etc.) and second to give a much free(er) hand to developers. Indeed the local "neighbourhood forums" which would be set up to decide what they wanted in terms of local development (shops, schools etc.,) are specifically charged with representing and furthering local business interests.

However it is the blatant and explicit freedoms being granted to developers - including possibly to build in green belt land, and other potential environmental impact that has set the cat among usually supportive Tory pigeons.

There are two crucial clauses which give the game away (or rather, give the land away): first, the "presumption in favour of sustainable development" spelt out in paragraph 13 of the document. In other words, "the default response to any planning application is 'yes'"- a point made by journalist Simon Jenkins, recently appointed to head the National Trust, and who therefore has a bigger axe to grind than most.

Protection of the environment was meant to be built into the modern system of development control established as long ago as 1947, and only elaborated further in 1991 as "presumption in favour of the development plan, unless material considerations indicated otherwise".

So certain types of large scale, visually conspicuous development in certain designated areas have not been allowed for 65 years - or even longer, since green Belts existed, at least round London, before World War II and the government designated the Peak District as the first National Park in 1949, already.

"Sustainable" development is supposed to mean development which meets present needs without compromising future needs. Like not building on natural floodplains which would increase future risk. Or not building on rich agricultural land. But as critics of the governments new draft point out, in this document, the adjective "sustainable" has lost its meaning. Simon Jenkins suggests that the clause should read simply: "presumption in favour of development", since that is its meaning. He adds: "Pickles and Cable are mere purveyors of building plots for the capitalist classes. The words 'development' and 'business' occur in the bill 340 times, the word 'countryside' just four."

The second clause of note is this: that planning authorities should "approve development proposals that accord with statutory plans without delay and grant permission where the plan is absent, silent, indeterminate or where relevant policies are out of date".

Apparently fewer than 30% of local authorities currently have such plans - but lawyers are warning that when the new framework comes into being, as many as 95% are unlikely to have up-to-date plans.

What is more, given that the government is in the process of removing much of the central government scrutiny of local planning policy, it is not clear who will decide whether a plan is "absent, silent or indeterminate", or how they will decide it. Presumably the existing Planning Inspectorate, which investigates local plans and adjudicates planning control decisions when applicants appeal against refusals would be abolished. But in fact, if the Con-Dem's developers' charter is implemented, appeals would be likely to arise against the granting of planning permissions - from environmental groups and local residents. The lawyers are going to be very busy - on both sides of the fence!

In addition, it has been pointed out that the draft does not say that schemes contrary to an existing plan should actually be refused. So it is a win-win situation for prospective builders and developers!

As planning minister, Greg Clark's parliamentary secretary, John Howells explained proudly to the British Property Federation, according to the new framework, developers will be able to build "what they like, where they like it and when they like"!

Simply a bit of a pickle

There is another twist to this tale, however. One of the first acts of the Con-Dem government in the field of planning, in May 2010, was to announce it was revoking the Labour's Regional Spatial Strategies. These had set out the house-building targets for each local area - at a time when the national target was to build 4.4 million homes... Labour's idea had been to divide up the responsibility - and then probably devolve blame for non-achievement of targets.

In the mostly Conservative-controlled districts of the English shires, these home-building targets were fiercely resented for all kinds of reasons, including of course, being against any development, full stop. But anyway, on a national scale, few, if any, areas were ever on course to meet their targets, no matter which party was in charge.

So when Communities Secretary Eric Pickles scrapped the targets as a first step towards "localism", councils in the Tory heartlands assumed he was promising them more powers to stop development.

Unluckily for Pickles, one housebuilder, the Edinburgh-based Cala Homes, successfully challenged the revocation in the High Court, arguing that Pickles had exceeded his powers, as the changes would require legislation.

Cala Homes' application for a 2,000 house development at Barton Farm near Winchester had been refused by the city council in autumn 2009, and it had appealed at the time, expecting to win, because the proposal would make a significant contribution to meeting Hampshire County Council's housing targets. At the time, Pickles had dismissed the appeal overturning an Inspector's decision to allow it. His reasons included the fact that Winchester's local plan is only "emerging"! Maybe this is what he means by "silent" in his legislation?

Poor Pickles! It must be difficult for him to choose between the refusal of Tory country gentlefolk to allow buildings in their green backyards, and the developers' greedy insistence to erect them! No wonder he also wants to devolve decision-making!

As to business developments - unlike with housing, there seems to be no shortage in this regard - quite the contrary: a survey in the summer of 2011 by the large property consultancy GVA Grimley found vacancy rates in business parks at 17% in the first half of this year.

True, commercial rental values grew nationally over the past year for the first time since 2008 - but just by an insignificant 0.1%, which was almost entirely due to demand for out-of-town office space in Cambridge, which swelled the average rise in rents in the East of England region's to 8.3%. In Yorkshire and the Humber, by contrast, the rental value of out-of-town office space fell by about 10% over the previous year. Little evidence, here, that business is being stifled by a lack of commercial premises! However as they say, there is always room for more...

Enterprise zones: another tax break

When Osborne first announced the government's intention of declaring Enterprise Zones in England in the March budget, some commentators recalled the failed policy of the same name that the Thatcher government drew up in 1980. In a series of designated areas, mostly former industrial areas which had become derelict, planning control was removed for a fixed period for any development that conformed to a simple land use plan. Businesses were also given "rate holidays" for the same fixed period.

Typical were Enterprise Zones like the Lower Swansea Valley, an area where closures of metal works had left high unemployment and huge vacant sites, on often heavily contaminated land. Overall, the policy cost the state £300 million between 1981 and 1986, but only 13,000 new jobs were created. Another 50,000 jobs were simply moved into the zones from outside by companies taking advantage of the benefits, and there was nothing to keep them there when the zone had run its course.

Indeed, the central inducements offered to companies to set up in a designated area in the 1980s - i.e., the discounting of business rates and simplified planning control for a fixed period - are all contained in the new generation of 21 zones announced by Osborne. But unlike in the 1980s, these Zones have been selected by the Treasury from bids by "local enterprise partnerships" of local authorities and business. And while Osborne announced at the Conservative conference that he would invite new bids from Humberside and Lancashire aimed at creating jobs, to replace those cut by British Aerospace at its Brough and Warton factories, the new list is by no means confined to the depressed regions.

For instance, the government accepted the bid from the grandiosely-named "Science Vale UK", based on the Harwell atomic energy laboratories and the Milton Park trading estate in south Oxfordshire. This is certainly not an area where business needs any special encouragement to invest, particularly companies in the "green technology, advanced materials and engineering, space and other high value R&D" sectors that are already Science Vale's declared focus. Yet this Enterprise Zone is predicted to produce the largest saving in business rates of all the eleven announced in August 2011 - £29.8 million!

"Partnerships" in Lowestoft and Great Yarmouth, the Humber Estuary and Teesside all identify renewable energy sector as a focus of their proposals, presumably owing to their nearness to the North Sea, which is already sprouting offshore wind farms. Some of the accepted proposals are attempts to compensate for the closure of a single site. One such is Discovery Park at Sandwich in Kent, a large research and development site closed by the pharmaceuticals company Pfizer earlier this year. Part of the partnership is a company formed by the researchers and managers who had been made redundant. But this site is an exception - Osborne's plan is clearly to give more to those who already have - in other words, while Thatcher's plan in the 1980s may have had some social merit, Osborne's scheme is certainly not Enterprize Zones a la Thatcher, mark 2. It's just another hand out to business, in thin disguise!

Gold-plated tape to replace "red tape"?

The government is at present considering its options with regard to its National Planning Framework. And it will probably pass the new legislation - but what its precise content will be remains to be seen. It is very likely that it will backtrack on a substantial number of its proposals - as it has already had to do on so many occasions so far, since last year. However the fact that it has presented this "developers' charter" in the first place means that whatever shape or form the Planning Policy Framework takes in the end, it will ensure that much of this bias towards property developers is retained.

But there is no way that this government is going to get rid of all its red tape - nor does it want to. The anti-red-tape demagogy is primarily aimed at the most gullible small businessmen-cum-Tory voters. But the capitalist class itself does not particularly want to get rid of state intervention as such - neither in this field nor in any other. What it wants is the state to intervene to do its own bidding without having to pay anything for the service. In other words, "red tape" is not a problem in and of itself for the capitalists, they just want to make sure that with or without "red tape" the state provides it with a source of easy profits.

In certain areas this may mean that the capitalists want the state to get rid of a lot of "red tape", for instance to remove any potential obstacle to their parasitising of public resources. But in other areas, removing too much "red tape" may not be in the interest of the capitalist class and planning may well be one such area. After all, the "red tape" of the planning system - i.e. the state's controls on development - allows a controlled release of land, thus managing supply and helping to keep property prices high.

So, this government may well tinker with the planning system to appear to be doing something "radical" in front of its electorate, but no government, even this orange and blue one, would abolish a system through which it can both protect the interests of the large numbers of capitalists and companies involved in real estate, and dispense its favours to the specific business interests its chooses to woo, for its own reasons - whether it may be big property developers or giant supermarket chains, for instance. Moving an application to the top of the pile requires, for instance, that there be a pile, and putting in a "good word" for it, requires that there is someone to inspect it, with at least a critical eye. So for the system to carry on helping both big business and the politicians, it must retain a certain amount of "red tape" - with enough gold on it to make it attractive to the capitalist class.