The future

The shires are stirring as the implications of Labour’s growth plans become clear.

Already the past few months have seen the first direct-action road protest in a generation at Linslade in the south Midlands growth area. It is also likely to see direct action against housing development, warns Henry Oliver, planning policy director of the Campaign to Protect Rural England.

Middle England’s unease about government growth plans has found political expression in the decisions by the east of England and South-east regional assemblies to fight the levels of housing provision that the government believes is needed make housing more affordable. The collapse of the government’s devolution plans for England after the failure of last November’s referendum in the North-east means that these unelected bodies, dominated by parochial local councils, will continue to be in the driving seat.

And the guerrilla warfare is hotting at a local level, too. Despite government reforms, many council planning committees remain as opposed as ever to new housing development. This has sparked calls for local authorities to be bypassed, but a Whitehall machine that has acquired a reputation for control-freakery will be reluctant to take away one of the few powers local councils retain.

KEY SIGNPOST The summer, with the East of England regional spatial strategy public inquiry. The government has to overcome the resistance of councils to its growth plans.

INFRASTRUCTURE

If the next government is serious about delivering more housing it must invest in the infrastructure, without which developers will not build. In the growth areas, the government has made a start in remedying the transport deficit with its community infrastructure fund. But the projects that this £150m fund can finance are small beer compared with the kind of major projects, such as the £10bn Crossrail scheme, that will unlock development across the region. But the government’s scope for finding new sources of cash was hampered last month, when Edinburgh residents voted out plans for a congestion charge in the Scottish capital.

Former urban taskforce member and Llewelyn Davies partner Martin Crookston argues that the government needs to bite the bullet on transport investment because of the wider benefits it can bring in terms of development and regeneration. “It’s still run in a very economistic way that does not encourage the urban regeneration agenda,” he says. The key test of whether the Department for Transport is taking regeneration seriously will be whether it reverses its funding withdrawal for the Leeds and Manchester light rail systems, both seen as vital for the health of the North’s economy.

KEY SIGNPOST Summer – the government is due to announce the update to its 10-year transport plan and the funding decision on Crossrail.

LEADERSHIP

Whether Labour forms the next government and whether, if it does, John Prescott remains deputy prime minister are the two key questions about the housing growth agenda. The Tories have promised to freeze the government’s growth area plans if they are returned to power and scrap the ODPM.

Some criticise Prescott for being better on vision than delivery, but nobody doubts his commitment to housing growth. Most credit Prescott for enthusiastically driving it forward since he set up the ODPM in 2002. Alan Cherry, chairman of Countryside Properties, says: “John Prescott has made a real effort to tackle the problem of shortage of housing and that has taken some political courage. There’s a political will and that should be applauded. He has bitten the bullet and done something about it.” If Labour wins a new term, latest rumours from the ODPM’s Eland House headquarters indicate that Prescott is likely to remain in his current job. However, the industry consensus is that he would have to work harder to secure backing from other departments if his growth plans are to truly take off.

KEY SIGNPOST May 6 – will the ODPM survive?

MARKET

Much of the growth area development is being proposed is in marginal locations such as the Medway towns, which are also usually the first to catch cold when the market sneezes. Meanwhile, the public sector is increasingly relying on developers to pay for affordable housing and infrastructure. National Housing Federation South East statistics show that section 106 contributions provided most of the affordable homes built across the region last year.

Housebuilders have been able to stomach the demands of London mayor Ken Livingstone and his ilk in recent years because the market has been so strong, and the underlying demand means that a 1990-style housing market crash is not on the cards. But the recent cooling of the market – which has already led to widespread price-cutting on new-build schemes – is bound to make housebuilders less confident about bringing forward risky major developments. And lower profit margins mean there would be less available to pay for the “add-ons”.

KEY SIGNPOST June – will the Bank of England raise its interest rates?

PLANNING GAIN

Top of the list of difficult decisions that John Prescott or his successor will have to make after the general election is the issue of planning gain. In particular, he will have to decide how to implement the Barker review’s recommendation to introduce a planning gain supplement in the growth areas.

The government is keen to capture a greater slice of development profits to pay for infrastructure such as schools, hospitals and roads. But many see Barker’s supplement as a new version of the development land tax that has been tried and failed three times since the Second World War. Bill Brisbane, managing partner of planning consultant Roger Tym and Partners, argues that moving to a nationally set tariff will lead to a slowdown in housebuilding, not the increase that Barker hoped for. “There will be less incentive for local councils to grant consent and put up with the burdens of development because there’s no certainty that the revenues raised will be spent locally,” he says.

KEY SIGNPOST Late summer, when the government publishes its recommendations on planning gain supplement.