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RTPI Budget 2014 analysis

19 March 2014

The Chancellor announced in his speech that this was a Budget for 'makers, doers and savers' but is it a Budget for planners too? The RTPI has looked at what the Budget means for the planning profession.

Economic overview

The Office of Budget Responsibility (OBR) is forecasting 2.7% growth for 2014 and 2.3% growth in 2015. This is welcome and in order to maximise the potentials that such growth projections imply, an appropriately resourced and strategic planning system can help make that growth sustainable and long-term with the best possible use of land and infrastructure.

Paragraph references below refer to the Budget Book.

Key announcements: England

 

2.25 Development benefits “The government will launch a government-funded staged pilot for passing a share of the benefits of development directly to individual households, including further research and evaluation of the approach.”

RTPI reponse

Janet Askew, Vice President of the Royal Town Planning Institute, said:  “The RTPI feels that paying individuals directly to accept development is unsupportable. Whilst it is hard to object to pilot schemes, there are better uses of limited resources. The RTPI urges the Government to deploy its time and effort to look at potentially more effective ways to get homes built.”

1.145 and 1.1.46 Garden cities

  • Ebbsfleet announced as a preferred location, with infrastructure funding attached
  • Long awaited prospectus will be published by Easter 2014

RTPI response 

The Government has announced that they will be publishing a prospectus for Garden Cities. The Government will be looking for locally-led proposals. Careful thought will need to be given to how such Garden Cities will be planned and delivered.

The Government’s announcement of a ‘new Garden City’ in Ebbsfleet is a welcome, if limited initiative. The Chancellor has announced that a Development Corporation will be set up to kick start the stalled development of around 15,000 homes.

The site at Ebbsfleet is subject to a complicated history, which the RTPI believes demonstrates the importance of strong local political leadership and the need for effective larger than local planning arrangements - particularly so with difficult sites.

Funding vital major infrastructure for housing through the protracted negotiations of S106 involving a series of public and private sector parties, none of which is charged with achieving new homes as a priority, will be insufficient – even on a site where the key transport infrastructure had already been provided.

1.141 and 1.142 Housing Supply

  • the government will create a £500 million Builders Finance Fund, which will provide loans to developers to unlock 15,000 housing units stalled due to difficulty in accessing finance.
  • the government will consult on creating a new ‘Right to Build, giving custom builders a right to a plot from councils, and a £150 million repayable fund to help provide up to 10,000 serviced plots for custom build. The government will also look to make the Help to Buy: equity loan scheme available for custom build.

RTPI response

The RTPI appreciates that custom build does have potential to deliver some more homes than at present, it is essential that this new “right” works within the planning system to ensure that new development is not built in isolation from existing or planned infrastructure such as schools, transport and utilities.

The RTPI queries why the announcement is limited to council-owned land, particularly given that the Government Property Unit is being tasked to make of better use of its own land.

1.147, 2.249, 2.250 Permitted Development Rights

  • Review of the General Permitted Development Order confirmed.  To be refreshed as a three-tier system with permitted development rights for small-scale changes, prior approval rights for development requiring consideration of specific issues, and planning permission for the largest scale development
  • More changes of use consultation on the way such as warehouses and light industry structures to residential, and expansion of car parks.

RTPI response

We have not yet seen the full effects of the previous changes to Permitted Development Rights and we have concerns that further relaxation will lead to a sub optimal use of sites which are better suited to land uses as planned.

Warehouses in particular may be entirely unsuitable and in the wrong places for homes. We will also be looking to see if the Government is proposing a ceiling on size.

The RTPI stresses that frequent changes to permitted development rights are unhelpful to developers, communities and planners. Permitted development rights work well where people know and understand them and this requires an element of continuity.  Previous relaxations on permitted development rights have not been welcomed by communities or planners – we will look at the detail on these announcements once they are published.

2.243 Government Property Unit working with local areas on better use of assets –The Government Property Unit will increase its work with local areas on better use of public sector assets, linking in with Growth Deals and building on the Strategic Land and Property Review. As with the One Public Estate pilots already taking place, this work will focus on opportunities for cross public sector working, efficiency and growth.

RTPI response

The RTPI welcomes the release of government land and property provided it is released in a judicious way, and working closely with Local Planning Authorities within the planning system. As the RTPI pointed out in our ‘Delivering Large Scale Housing Policy Paper’ as the biggest landowner in the country it is essential that the public sector releases its land holdings in a deliberative way, taking account of the wider public need.

2.251 Judicial Review reform – The government, working closely with the judiciary, will launch a new Planning Court on 6 April 2014 to fast-track disputes, including big construction projects.

RTPI response

The RTPI has called for this approach for some time. 

2.252 Nationally Significant Infrastructure Planning Regime Review – The government is committed to making the planning system work for major infrastructure projects and will shortly publish the outcomes of its consultation on the Nationally Significant Infrastructure Planning Regime, including a series of measures to streamline and improve the process.

RTPI response

The RTPI looks forward to the publication of the outcome of the consultation on the NSIP regime. We believe that the NSIP regime would also benefit from a programme of public education and enhanced community engagement.

1.136 The government has made significant progress this year on the delivery of High Speed 2 (HS2), depositing a hybrid bill in Parliament, and appointing Sir David Higgins – former Chief Executive of Network Rail and the Olympic Delivery Authority – as Executive Chairman of HS2 Ltd. Sir David Higgins recently set out his proposals to maximise and accelerate the benefits HS2 can offer.

RTPI response

The intervention in Ebbsfleet demonstrates what can happen when large scale transport schemes are not planned in conjunction with housing and employment activities.  Lessons from HS1 need to be learned for HS2 and we look forward to the publication of the HS2 Growth Taskforce report.

1.148 Enterprise Zones are a key part of the government’s strategy for enabling growth in local areas. The government will continue to support Enterprise Zones to create even more new jobs and attract private investment to local areas. Availability of business rate discounts and Enhanced Capital Allowances will each be extended by 3 years as an incentive for new and expanding businesses to locate in Enterprise Zones.

RTPI response

The initiative is welcome but the RTPI stresses that Enterprise Zones are not a panacea. They work best when they are integrated with existing and planned initiatives within a strategic planning framework.

1.150 The government will commit £100 million to Greater Cambridge until 2019-20 to support their ambitious transport and infrastructure proposals through a Gain Share mechanism. This agreement could be worth up to £500 million over 15 to 20 years, dependent on the economic impact of their investments and, in addition to Greater Cambridge’s own plans, could deliver over £1 billion of infrastructure investment in the Greater Cambridge area.

RTPI response

Janet Askew, Vice President of the RTPI, said: "The RTPI feels this is potentially an interesting model for infrastructure delivery, and we would encourage the Government to expand this model across the country out if it proves successful. Government should ensure that the scheme is accompanied by a parallel evaluation process."

1.144 The government will work with the Mayor of London and the Greater London Authority (GLA) to develop proposals for extending the Gospel Oak to Barking Line to Barking Riverside, and to ensure that any public investment unlocks the construction of up to 11,000 new homes.

RTPI response

This is welcome and demonstrates the important role transport infrastructure can have in unlocking housing development.

2.19 Estate regeneration – The government will introduce a £150 million fund to kick start regeneration of social housing estates.

RTPI response

As outlined in ‘Delivering Large Scale Housing’ policy paper the RTPI considers large scale development a key vehicle in delivering the homes we need. The regeneration of social housing estates can indeed play a part, but should be part of a range of solutions to the shortfall in housebuilding.

2.20 Builders’ Finance Fund – To support SME access to finance, the government will create a £500 million Builders’ Finance Fund, which will provide loans to developers to unlock 15,000 housing units stalled due to difficulty in accessing finance.

RTPI response

The RTPI welcomes any scheme that introduces new actors into the building sector, particularly SMEs. As it stands the sector is dominated by a small group of large developers and is therefore rigid in its ability to respond to fluctuations in demand.

Key announcements: Scotland

 

2.245 Glasgow City Deal – The government is now engaged in detailed discussion with Glasgow to develop a City Deal that will drive employment and economic development across the city region.

RTPI response

RTPI Scotland welcomes the concept of the City Deal.

The major of planning, housing and infrastructure issues are devolved to the Scottish Government. The Scottish Government will receive a Barnett consequential amount of around £63m. RTPI Scotland believes that this could be used to finance enabling infrastructure to support planned growth, for example housing to help deliver the aspirations of the National Planning Framework.

Key announcements: Northern Ireland

 

2.247 Pilot Northern Ireland Enterprise Zone – The Northern Ireland Executive has set out its plans for a pilot Enterprise Zone near Coleraine, which the government will support by offering enhanced capital allowances to investors within that Zone. This is the first new Enterprise Zone in Northern Ireland, and is in line with the commitment the government and the Executive gave in the joint economic pact in 2013.

RTPI response

The initiative is welcome but the RTPI stresses that Enterprise Zones are not a panacea. They work best when they are integrated with existing and planned initiatives within a strategic planning framework.

Key announcements: Wales

 

1.149 The government will shortly take forward a Wales Bill that will devolve new tax and borrowing powers to Wales, enabling the Welsh government to raise more of the money it spends and providing it with further tools to support growth in the Welsh economy. In advance of implementing these new powers, the government has also agreed that the Welsh government can use existing borrowing powers to begin investing in improvements to the M4.

RTPI response

RTPI Cymru will look to see whether this applies to the Community Infrastructure Levy which is proving particularly problematic in Wales, which should be addressed in any case.