Report

Planning Reform and Productivity

10.6.24 2024

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Two quotes, half a century and a continent apart, explain why housebuilding has declined to 145,000 per year, less than half of the Government’s objective of 300,000 p.a.

Without power, there can be no planning, and without planning, there can be no vision.
Robert Moses - New York City Planning Commissioner
The Localism Bill will shift power from the central state back into the hands of individuals,
communities and councils. It will empower local people giving them more power over local
government.
Eric Pickles - Secretary of State for Communities and Local Government 2010-2015

Those levels of housebuilding have not been seen since the New Towns programme of the 1960’s when the State played a much more active role in delivering both housing and employment.

Localism has dissipated, rather than handed power to 317 different local authorities. They are trying their best to come up with their version of a growth strategy and then try to agree it with their neighbours. 

This is not sustainable. Most people may not object to more housing and employment, but they will not expressly vote for it. Those who oppose will turn up and vote against it. Local politics are not localism’s ‘Big Society’ – a single district cannot determine how much growth is in the regional or national interest. 

A culture of lower growth targets now jars with an unobtainable target of 300,000 homes per year. National policy is deliberately opaque as the Government balances local objections with its obligations to house its populace and create wealth. This is why so many Local Plans fail or struggle through the system, caught in a contradictory web of regulation and policy tests. Do not underestimate the direct and indirect costs this flawed plan-making is imposing on the economy. 

The Government has tried to stimulate bottom-up strategic planning through Duty to Cooperate, City Deal and Garden Communities, but these are clunky and complex and less likely to work the more pressurised an area is. The collapse of the Joint Spatial Strategy in Oxfordshire is a case in point: we now have an important City region unable to agree its development needs.

This is why the Government has always reached for workarounds to its flagship programmes. Right from the foundation of the modern planning system in the 1940s, the Government immediately awarded sweeping planning powers to New Town Commissions, before passing the baton on to Urban Development Corporations and even the Olympic Delivery Authority. Some issues are just too important and too strategic to be left to the Big Society and voluntarism.

Without the right number of homes in the right location, a lack of labour means we are not powering the economy. Economic potential is already underestimated by a planning system that uses the rear-view mirror to predict employment trends. This is not helpful in the face of fast-moving new technologies such as AI, life sciences, renewable energy and transformation in logistics in response to rapidly changing consumer behaviour.

There is a power imbalance that needs correcting because now that power has dissipated, there is no coherent vision for national productivity. So what can be done?

First, let’s stop talking about the ‘bonfire of the regulations’. This is very tempting, but many support regulation and mitigation, particularly in the era of ecological and climate crisis. Simplification and standardisation should be pursued more vigorously (national policies are a welcome innovation), but this is a tactical response, not a strategic one. We need to unlock land supply in order to reduce the cost of planning and open up more housing choice and economic opportunity. 

For now, let’s stop asking local communities to reverse-engineer our national productivity strategy and link power to responsibility. Let’s marry these reforms with another ambitious state-led New Towns Programme: the only time we came close to meeting the Government’s target for housebuilding.

Three strategic reforms are needed:

1. A strategy for national productivity agreed at the national level. Strategic economic and housing targets should be determined nationally as they are too important to be left to chance. The content or direction of such strategies need to be set out in political manifestos to make the debate more transparent so it does not play out across 317 Examinations in Public. This will address the ‘democratic deficit’ that has beset strategic planning in the past. Solving regional inequalities, 
infrastructure needs and energy planning all need to be part of this national spatial plan. 

2. To receive national direction and strategies, we need a new network of larger authorities. Cities and their regions are increasingly shaping our society and commerce. They are large enough to handle 21st century complexity. Plans for new Mayoral and Combined Authorities are welcome, but this reform has to be systemised.

3. Finally, local authority allocations, infrastructure funding, affordable housing and S106 contributions must be reformed so there is a clearer and more express link between new development and local communities. The social and moral value of opportunity provided by new development has to be front and centre of the productivity debate if we are to ask communities to step up and meet their future needs.

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Mike Derbyshire

Partner, Head of Planning

Mike leads Bidwells’ planning practice. He is a passionate and vastly experienced advocate for thoughtful, well-designed development and a thought leader on the future of planning in England.

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Chris Pattison

Managing Partner, Planning

Chris has been delivering challenging client briefs across Oxford, the South East and Scotland for more than 20 years.

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The Productivity Engine

The Productivity Engine is our latest groundbreaking report that addresses the UK's stagnating productivity. What powers economic productivity? An easier question to answer may be what doesn’t. 

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