Wokingham Times

One of the many policies and aspirations of the present government that lies in tatters is its wish to see many more houses built in Britain. With an impeccable sense of timing and no sense of irony, the government chose the top of the housebuilding cycle to announce that it intended the building industry to step up from around 180,000 new homes a year to 240,000. With all the certainty of the old Communist regimes announcing their tractor production targets, Minister told us solemnly that another 3 million homes will be built by 2020. The policy was to be pushed through by the construction of numerous “eco” towns on greenfields, coupled with brownfield redevelopment, town cramming and back garden building. Doubtless Ministers would like to force too many new homes on us here in Wokingham, without making the money available to build the schools, roads and drainage systems they would need.

All of this looks absurd when you see the reality of the Credit Crunch. The first thing the government did to “help” implement its policy was to nationalise the most aggressive of the mortgage banks, and then stop it undertaking new lending! The Bank of England and the government failed to keep markets liquid enough, so credit dried up at many of the smaller lenders, and the larger banks all had to rein in their lending and raise new capital. As a result in the first quarter of this year only 32,000 new homes were started – an annual rate of a mere 130,000 if the first quarter’s activity levels can be sustained, or little more than half the government’s ambition.

At the same time the government decided it needed to speed up the granting of planning permissions for major projects. It has chosen to do so by legislating to set up a new quango to become involved in these decisions. In our recent debate on the subject Ministers were themselves unable to confirm it would be quicker to wait for the new quango if you want a major planning permission, whilst the Opposition pledged to abolish it and pointed out it was likely to delay matters with judicial review of decisions a distinct possibility.

Regional government – unelected, expensive and much disliked – is currently dividing up these top down government targets for more housebuilding. It is playing the part of a faithful retainer in this process of illusion – instructing Councils to make land and planning permissions available on a huge scale, as if the industry wanted to build all these homes, or people could borrow the money to buy them. I look forward to a Conservative manifesto pledging to abolish both these hated regional governments and the silly housing targets they generate. Planning applications should be considered on their merits by the local authority involved. If a company or a landowner wishes to gain a permission which greatly enhances the value of their land, they should make it worth while for the local community and the people who will be adversely affected by the development. They should not be able to rely on unelected regional officials, on Chief Executives of Councils keen to do the government’s bidding to advance their own careers, and on the idiotically optimistic government view of how many houses people can afford to build and buy.

I was pleased to hear Shadow Spokesmen sharing my view that top down targets, regional control and over optimistic plans are a bad idea. The planning system at the moment suits no-one. Developers think in better economic times they cannot get the planning permissions they want, whilst most people feel the system fails to take their views seriously and fails to protect communities against unwanted development or to provide the additional facilities needed to make a housing estate part of a thriving community.

So what should Councils about the pressures from the top to identify more greenfields to be bulldozed? They should argue, remonstrate and use every clause in the long manual to slow things down.It’s time for masterly inactivity. There is no need to identify new sites at the moment. This system cannot last. There is no need for more planning permissions this year, as the housebuilding industry is going through extremely difficult times. Land values are going to fall. There is too much land with planning permission around for current needs. Leading housebuilders need to sell land and finished houses to pay off some debt. The government is in a world of its own. The problem today is not a shortage of planning permissions, but a shortage of mortgages and people to buy the homes.

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One Comment

  1. Cliff
    Posted July 3, 2008 at 11:37 am | Permalink

    When we were recently questioned regarding proposed developments in the area, we were given, in effect, the choice of site A or site B. We were not given the choice of no further development thank you. When people returned these forms to the SERA, the quango could say legitimately that the local people supported plan A or B. If a no further development option had been included on the questionairre, I suspect this option would have been more popular.

    I understand that much of the need for new homes is generated by the increase in the number of people that choose to live alone and relationship breakdowns. I also believe that immigrants have also contributed to the demand for the further building of more homes, however, as economically our country becomes less attractive to would be migrants, I suspect the demand from the latter group will slow and this will take some pressure off, some areas. I suspect with the government's anti marriage tax and benefits systems, the former two groups are likely to continue to grow and thus put pressure on housing supply.

    One other concern I have, is the trend for many local councils to only give planning permission if the would be developer agrees to provide another amenity such as a bridge or a station or a community centre etc, is this not really a sort of "backhander" in essence?

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    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

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