5 ways for the government to keep the good in planning

This article originally appeared in the Local Government Chronicle.

Two months in, there is no doubt that Labour are committed to delivering on their manifesto promises to “rip up the rule book on planning”. The new government have placed planning reforms at the heart of their mission to drive growth, proposed a Planning and Infrastructure Bill in the King’s Speech and, barely two days after their landslide victory, announced a consultation on a new National Planning Policy Framework (NPPF).

When complete, the new NPPF will act as a guide for local planning authorities and developers by outlining the government’s planning policies and how they should be applied locally. And, even within the language of the consultation, we can read the runes on where the government places the blame for the lack of delivery on housebuilding and infrastructure projects in the UK. “Our antiquated planning system delays too many [development] projects, stymieing Britain’s ability to grow its way to prosperity”, it reads. But, in setting its sights on the system itself, is the government overlooking an important piece of the puzzle?

The planning system exists to consent land for development, set requirements for how and where that development can happen and serves to distribute the benefits of development activity. But the actual delivery lies largely in the hands of the private sector, and they are failing to build. In 2021, there were already more than 1.1m homes in England – with planning permission – that were yet to commence construction.

“the rush for change risks overlooking the good”

Of course, this is just one small element of where we are going wrong on housebuilding, but it’s an important reminder that there are two parties in the relationship between the public and private sector when it comes to getting Britain building. There are, indeed, legitimate frustrations with aspects of planning procedures, but the system of consents and requirements is designed specifically to ensure development meets the needs of local people, planet and place over profit. That means that our planning is – and should remain – a key delivery mechanism for any government that seeks to ensure economic growth results in good outcomes for communities. As I explored in the report CLES released last week – Powering up planning – the rush for change risks overlooking the good within the current planning system while trying to fix the bad.

For, while much of the mood-music coming from the government has centred on the extent to which planning acts as a burden and a barrier, in the course of my research I uncovered multiple examples of local authorities using the system to deliver good outcomes for their local communities: from affordable housing and workspace to targeted local employment and skills opportunities for residents. These are the kind of interventions we will be urging Matthew Pennycook, the Minister of State for Housing and Planning, to keep supporting when we write to him this month to share our findings. To do so, we will say, the government must:

1. Fund planning properly

Austerity has hit the planning system hard. Between 2010 and 2021, local authority net expenditure on planning has fallen by 43%, meaning that planning authorities have reduced capacity and have become increasingly dependent on the private sector to deliver development activity. We cannot rely on the private sector to deliver affordable homes out of good will – CLES’s own analysis has found that five of the ten councils most impacted by austerity have built no affordable homes supported by contributions from private developers since 2010. There feet must be held to the fire and, to do that, we need a new funding settlement that enables local authorities to restore capacity and strengthen negotiation skills within planning departments.

2. Embed community wealth building principles into planning

Over the last decade, a system where developers hold much of the power has enabled the three largest housebuilders in the UK to generate what has been called “supernormal levels of profitability”. This gives them substantial leverage in the market to restrict or enable supply. To swing the pendulum of power back towards communities, a national plan should seek to embed community wealth building principles into the policy and practice of planning. This can provide opportunities to explore a greater diversity of tenure and ownership in developments, alongside the targeting of developer recruitment and upskilling opportunities for local residents to ensure that more of the wealth generated by development is locked in to places, and doesn’t leak out to distant shareholders.

3. End Right to Buy

The 2022 UK Housing Review found that 40% of former council properties sold through Right to Buy have ended up as costly and poorly regulated private rented housing. While the policy is still in place, local authorities will always be chasing their tails in the pursuit of affordable and social housing. The government should enable local authorities to end Right to Buy and ensure affordable housing can be delivered at a rate that meets skyrocketing demand.

4. Link planning to a better form of growth

The current planning system was devised as a way to control and distribute the benefits of development activity among local people. Planning reform which refocuses it to service growth should be careful to not follow the debunked rhetoric of trickle-down economics and hand blank cheques to developers. The government should ensure its growth policy accounts for planning by positioning a strengthened planning system as a means of redistributing the wealth generated by growth.

5. Support collaborative local planning

Devolution is a key tool when it comes to development and place shaping. Combined authorities can use their convening power to bring together local authorities and build coherence in policy and practice. However, existing experiments in this area have exposed tensions between the local, regional and national agendas. The government should support a collaborative strategic approach at a regional level (without centralising or “devolving up” powers currently retained locally), so that planning authorities can pool resources and align policy and practice across a larger footprint, ensuring developers cannot race to the bottom in terms of regulations and economic contributions.

While recognising the limits of the existing planning system, we must also harness its strengths. The new government has an opportunity to bolster these strengths and support progressive places in their endeavours to get the most out of development activity – tearing up the rulebook risks squandering that opportunity.