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Our detailed overnight analysis of planning related budget issues

19 March 2015

In his final budget before the election, the Chancellor was keen to promote the continued trend reduction in the deficit and national debt as proportion of GDP, as well as the Office of Budget Responsibility (OBR) upwards revision in the UK’s GDP growth forecast. RTPI Policy Officer, David Pendlebury (pictured below), has gone through the budget book in fine detail with colleagues Joseph Kilroy and Harry Burchill, and our national directors Craig McLaren and Roisn Willmott, to see what it says about planning related issues across its 125 pages.

David Pendlebury _RTPI Staff -0582

Janet Askew, President of the RTPI, in her response to the budget said: “We welcome in principle new measures to boost housing and regeneration but will need to see the detail of what is proposed and how they are to be delivered. It is crucial that we begin to invest again in local planning for a growing and sustainable economy. The National Audit Office revealed a huge 46% reduction in spending on planning and development services. This highlights very clearly the need to channel more resources into the planning system at local authority level.”

 

Housing zones can be a welcome initiative if they are accompanied by comprehensive plans to ensure that new communities are great places to live by being well served by transport infrastructure, employment opportunities, and social and wider amenity infrastructure.

Key announcements: England in general

Please note all the paragraph references are to the Budget Red Book

1.84 More strategic management of government land, property and spectrum. Over the next Parliament the government will transform how it manages the significant land and property assets it owns. Budget 2015 announces that the government will implement a new commercially-driven approach to land and property asset management across the central government estate, based on departments paying market-level rents for the freehold assets they own. The government will create a new central body or bodies, which, working under a cross-government framework and direction provided by the Treasury and the Government Property Unit of the Cabinet Office, will own and manage relevant property and land assets, as well as leasehold assets where appropriate. This will help drive better strategic oversight and management of the estate, and provide greater incentives for departments to rationalise the space they occupy. It will also deliver efficiencies, and release land and property for productive use, including building new homes. Implementation of the reform will commence immediately, with the model becoming operational by March 2017, subject to legislation.

RTPI response:

The RTPI is pleased that the Government has acknowledged its calls to provide greater information on public sector land ownership (See RTPI: Planning in the Next Parliament). It will be important to ensure that local authorities are sufficiently resourced to develop effective plans to make the most productive use of public sector owned land.

However, the RTPI would caution strongly against commercially-driven approaches to land management where these risk the development of a culture that puts maximising capital receipts ahead of proper, considered planning. This kind of commercial pressure risks incentivising local authorities to make rushed decisions regarding land use that may not be the most effective or efficient from a long term planning perspective.

1.134 A streamlined, accessible planning system and a housing supply that is readily able to meet demand are essential components of a flexible, resilient and prosperous economy. Annual housing starts and planning approvals are at 7-year highs and over 537,000 new homes have been built during this Parliament. In total, the government has committed investment of

£24 billion up to 2020 into affordable housing, access to finance, and helping households into home ownership.

RTPI response:

A growth in housing output is welcome but it means a reassessment of cuts to Local Planning Authorities (LPAs) needs to be considered. The Department for Communities and Local Government (DCLG) has faced extensive cuts since 2010 and planning in turn has been severely cut within DCLG. If we want our new communities to be places where people want to live - rather than just filling quotas, well resourced LPAs will be essential.

1.135 The government is already delivering the most ambitious programme of affordable house building for a generation. It has delivered 217,000 affordable homes since April 2010, including

over 63,000 for Affordable Home Ownership. A further 275,000 homes will be provided in the five years from April 2015 to March 2020 – building more new affordable homes than during any equivalent period in the last 20 years.

RTPI response:

The RTPI welcomes the building of more affordable homes at a time of acute need. How they are provided is crucial – they must be well planned, i.e. delivered in locations where people want to live with accompanying social and physical infrastructure.

The RTPI absolutely welcomes the building of more affordable homes at a time of acute need. How they are provided is crucial – they must be well planned, i.e. delivered in locations where people want to live with accompanying social and physical infrastructure.

1.136 The government has introduced a number of measures to support home ownership.

Since Help to Buy was launched at Budget 2013, the equity loan scheme has boosted housing supply with almost 43,000 new-build completions, supporting first-time buyers across the country to get onto the property ladder.81 In the year to the third quarter of 2014-15, the number of Right to Buy sales increased by 15%.82

1.228 In recognition of the impact the low interest rate environment has had on the ability of first time buyers to get on the housing ladder, Budget 2015 announces the Help to Buy: ISA. This will reward people that are making the difficult choices required to save regularly, and help them realise their aspirations of homeownership for the first time. The scheme will work by providing a government bonus to each person who has saved into a Help to Buy: ISA at the point they use their savings to purchase their first home. For every £200 a first time buyer saves, the government will provide a £50 bonus up to a maximum bonus of £3,000 on £12,000 of savings. Savers will have access to their own money and will be able to withdraw funds from their account if they need them for another purpose but the bonus will only be made available for home purchase.

RTPI response:

The RTPI is concerned that the Government is pursuing policies which are boosting demand for houses without sufficient policies to increase supply. Over the long term this will mean that, despite the stated goals of the scheme to help people purchase homes, it will actually have the consequence of making home ownership harder to achieve for many.

1.87 Integrating services to improve outcomes and reduce costs. Further savings will also be achieved by making local services work better for the people who need them. The £448 million invested in the Troubled Families programme has helped over 105,000 families to turn their lives around, the government has demonstrated its commitment to early intervention in a child’s earliest years and the £5.3 billion Better Care Fund is helping people to benefit from joined up health and social care.56 This is based on the principles that intervening early can prevent problems arising later on and locally joined up services can better meet the needs of vulnerable people. Building on the government’s ambitious programme of reform, the Budget announces that the government is exploring the cost-effectiveness

RTPI response:

As set out in our 2014 policy paper ‘Capturing the wider benefits of investment in transport infrastructure’, the RTPI would encourage investigation into integrated planning for services where this can lead to delivery efficiencies.

2.239 Renting out parking spaces – The government will update its planning guidance to Local Authorities in March 2015 to clarify that it should be possible for non-residential properties to rent out their existing parking spaces without requiring planning permission, provided there are no substantive planning concerns.

The RTPI is pleased that the Chancellor recognises the importance of reducing spatial inequality in the UK and the benefits that this can bring over time to gross national income from enhanced productivity. The RTPI also agrees that such a policy should be based on a spatial awareness of the comparative strengths and specialisms of different regions of the country.

RTPI response:

Any changes to parking policy should only take place after having consulted the specialist skills of transport planners and wider transport plans for a particular planning jurisdiction.

2.247 Compulsory purchase consultation – The government has launched a consultation into the compulsory purchase regime to make it clearer, faster and fairer to support brownfield development.

RTPI response:

The RTPI welcomes proposals that can speed up the planning process whilst maintaining due diligence.  However, the RTPI would stress that planning mechanisms such as compulsory purchase require skilled and well trained practitioners, which in turn requires sufficient investment in local authority planning departments.

1.137 Budget 2015 sets out further progress on the government’s commitments to ambitious housing and regeneration projects. The government is designating the first 20 Housing Zones outside London, and continuing to work with the other 8 shortlisted areas – at least doubling the ambition announced by the Chancellor in his Mansion House speech to create 10 housing zones outside London. Backed by government technical support and planning funding, brokerage and investment, these Zones could support up to 45,000 new homes.

RTPI response:

Housing zones can be a welcome initiative if they are accompanied by comprehensive plans to ensure that new communities are great places to live by being well served by transport infrastructure, employment opportunities, and social and wider amenity infrastructure.

England – Location Specific

1.144 The government is committed to building a truly national recovery, closing the long-term gaps between the north and south, London and the rest of the country, and strengthening the UK economy as a whole.

1.145 Outside London and the South East, the rest of England has grown more slowly than the national average since 1997.84 The Chancellor has set out long-term economic plans for each region, with an ambition to raise the long-term growth rate of slower growing parts of England to at least the rate currently forecast for the UK as a whole. This could add an extra £90 billion to the UK economy by 2030.85

1.146 In contrast to strategies based on redistributing public sector activity, the long-term economic plans promote private sector growth, backing business and helping areas attract new investment by investing in better infrastructure, innovation and quality of life. They are tailored to the particular strengths of each part of the country: from tourism and farming to manufacturing and financial services – to build a stronger economy and fairer society.

RTPI response:

The RTPI is pleased that the Chancellor recognises the importance of reducing spatial inequality in the UK and the benefits that this can bring over time to gross national income from enhanced productivity. The RTPI also agrees that such a policy should be based on a spatial awareness of the comparative strengths and specialisms of different regions of the country.

1.111 As part of the government’s work to strengthen the financial incentives to encourage business growth, Budget 2015 announces pilot schemes in Cambridgeshire and Peterborough and, subject to the formal approval of Greater Manchester Combined Authority, in Greater Manchester and Cheshire East, which will enable these areas to retain 100% of any additional business rate growth beyond expected forecasts. These pilots will begin in April 2015 and will reward additional growth to the local business rate base whilst maintaining the nationwide business rate retention and redistribution system.

RTPI response:

The RTPI welcomes policies that promote fiscal devolution in-line with policy devolution. Furthermore, it is crucial that greater devolution is coupled with investment into planning and planners which can ensure that area-based policy development achieves the most efficient economic and social outcomes for places.

1.138 The government is committing to enable the public sector to lead development on the next phases of Northstowe. Under the delivery model set out at Autumn Statement 2014, the Government expects that three-quarters of the homes started on the public sector-owned site by 2020 will be built under direct contract with the public sector, with the rest in that period delivered through serviced plots in line with the public sector’s overall master plan for the development. This model will help the development to build out at twice the rate of a conventional private sector route. The government has appointed the University of York to lead a study into the feasibility and economic impacts of direct commissioning of housing on a significantly wider scale, and to evaluate the development at Northstowe.

The RTPI welcomes policies that promote fiscal devolution in-line with policy devolution. Furthermore, it is crucial that greater devolution is coupled with investment into planning and planners which can ensure that area-based policy development achieves the most efficient economic and social outcomes for places.

RTPI response:

As the largest land owner in the country the public sector has a duty to ensure its land is put to best use. As a long time advocate of a more socially conscious use of public sector land that takes the wider public good into account rather than just focusing on the capital receipts gained by the treasury, the RTPI welcomes the innovation taking place at Northstowe. We would hope it can be a model for more public sector sites coming forward for housing development in the future.

1.140 Following legislative authority from the Deregulation Bill later in March 2015, the Government expects that the Urban Development Corporation (UDC) established to deliver a new garden city at Ebbsfleet will be operational from April 2015. The Department for Communities and Local Government is announcing the Board members for the UDC for the garden city at Ebbsfleet, who will lead the Corporation alongside the Chairman Designate, Michael Cassidy.

1.141 The government will consult shortly on a specification to deliver the master plan for the development at Ebbsfleet, which will provide the Development Corporation with a vision for the next stage of development. The Homes and Communities Agency (HCA) will shortly bring forward the Northfleet Embankment site for marketing, to deliver high-quality homes and employment opportunities. To further support development of the garden city, the Chancellor has asked the UDC to work with the government to produce a prioritised, realistic and costed plan for infrastructure needs at Ebbsfleet.

RTPI response:

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.

Manchester and “Northern Powerhouse”

1.148 To build the Northern Powerhouse, the government is already:

• committing £13 billion of investment to transport in the north of England: connecting cities, electrifying the main rail routes, building the northern rail hub, and providing new trains through the new northern rail franchise

• supporting a further £2.7 billion of investment for new trains on the east coast, and investing in major road upgrades including the A1, M62, M1, A556 and Mersey Gateway Bridge, in addition to the £50 billion commitment to develop High Speed 2 (HS2)87

RTPI response:

The RTPI is pleased that the Government recognises the importance of transport infrastructure and connectivity for realising growth potential. It is paramount that any plans for infrastructure investment are developed strategically with wider plans for area development, including the provision of housing, employment sites, social infrastructure, and interactions with wider transport linkages.

The RTPI is looking forward to Transport for North’s comprehensive Northern Transport Strategy and HS3 concept and hopes that such proposals take a broad perspective of planning as noted above.

Manchester:  devolving power to Greater Manchester, including through the creation of a new directly elected metro Mayor, to give the north a powerful new voice

• devolving power to Sheffield, including over transport, skills and business support 

RTPI response:

The RTPI believes that institutional devolution, if backed with genuine fiscal and policy-making powers can be a strong force for boosting local and regional economic performance. It is important that devolution takes place in a coordinated manner which recognises the need for joined up strategic planning across sectors. It is important to remember that while the mayoral role is an easy and attractive institution to promote, it is not the only institutional function through which devolution can occur.

South West England

1.166 Transport: The government has already committed £7.2 billion to transport infrastructure in the South West. This includes: £2 billion on upgrading key roads such as the A30, A303, A358 and the M5; a new tunnel at Stonehenge; and electrification of the Great Western Main Line. In January 2015, the Chancellor announced a new South West Peninsula Rail Task Force to bring forward proposals for strategic and local rail schemes.

RTPI response:

The RTPI welcomes the recognition of the essential role of transport infrastructure for strong economic performance. The RTPI would stress that over the long term, different modes of infrastructure investment can have different long term consequences, especially from an environmental sustainability perspective, and that such considerations should weigh heavily in any investment decisions.

1.170 Housing: To meet the housing needs of the South West and regenerate brownfield sites the government will support the new housing zones at South Bristol, Hinkley, Poole, Weston-super-Mare, Ashchurch, Gloucester and Foxhill. These zones will see the government providing support and finance to enable the regeneration of brownfield sites into new homes. Together the zones across the South West will deliver over 11,000 new homes.

RTPI response:

Housing zones can be a welcome initiative if they are accompanied by comprehensive plans to ensure that new communities are great places to live by being well served by transport infrastructure, employment opportunities, and social and wider amenity infrastructure.

The RTPI welcomes the recognition of the essential role of transport infrastructure for strong economic performance. The RTPI would stress that over the long term, different modes of infrastructure investment can have different long term consequences, especially from an environmental sustainability perspective, and that such considerations should weigh heavily in any investment decisions.

London

1.171 Housing: In February 2015, the Chancellor set out a plan to tackle housing in London, the biggest challenge facing the city. As well as announcing new housing zones, the government announced the creation of the London Land Commission (LLC), tasked with developing brownfield and public sector land. Budget 2015 provides £1 million to allow the LLC to create a comprehensive database of public sector and brownfield land.

Alongside ongoing support for the regeneration of Barking Riverside and Brent Cross, the Government will also provide £7 million to the Greater London Authority to support the development of the Croydon Growth Zone. This could unlock over 4,000 homes and 10,000 jobs.

RTPI response:

The RTPI welcomes initiatives that echo its calls for providing upfront investment in developments where this may not be forthcoming from the private sector – such as in the case of some brownfield sites or where required infrastructure investments may be intensive (see ‘Capturing the Wider Benefits of Investment in Infrastructure’).

1.173 Devolution: The government is devolving further powers to the Mayor of London, including over planning and skills. This will allow the Mayor to accelerate the provision of new homes by reducing planning delays, and to tailor decisions over skills provision to London’s needs.

2.50 Devolution of planning powers – The government will consult on devolving planning powers over sightlines and wharves to the Mayor of London, allowing the Mayor to accelerate provision of new homes by reducing planning delays.

RTPI response:

The RTPI welcomes new initiatives to implement strategic planning but would also remind that any concentration of powers need to retain respect for the democratic, rights-based nature of the planning system.

1.139 Budget 2015 also announces £97 million of funding and ring fencing of the local 50% share of business rate growth to support the London Borough of Barnet and the Greater London Authority’s (GLA) plans for the regeneration of Brent Cross. This will unlock 7,500 new homes and create 4.9 million square feet of new commercial development with space for up to 27,000 jobs.

RTPI response:

As also outlined in ‘Capturing the Wider Benefits of Investment in Transport Infrastructure’, the RTPI supports innovative approaches and mechanisms to boosting investment in transport infrastructure by utilising the proceeds from the economic benefits it provides. Providing local authorities with the resources and support to enable their planners to implement these kinds of innovative mechanisms will be essential to their wider delivery.

Scotland and Wales

1.143 Following the successful roll-out of City Deals across England, in 2014 the government signed an ambitious City Deal for Glasgow and the Clyde Valley, alongside the Scottish Government and the Glasgow and Clyde Valley local authorities. The government believes that there is merit in extending the City Deal model further in Scotland and Wales. Therefore, Budget 2015 announces that the government is opening negotiations with local partners and the Scottish and Welsh Governments for City Deals for Cardiff, Aberdeen and Inverness. In Inverness, the government is making funding available in 2015-16 to help progress the deal.

RTPI response:

The RTPI welcomes greater fiscal devolution accompanying devolution of power to Scotland and Wales. As part of the devolution agenda it is crucial to ensure that institutions at local, City regional level are equipped to make and implement decisions. Institutions at all levels must have the resources, skills, experience, and culture to make and implement decisions. Fiscal devolution to city regions is important in this context.

The RTPI welcomes greater fiscal devolution accompanying devolution of power to Scotland and Wales..As part of the devolution agenda it is crucial to ensure that institutions at local, City regional level are equipped to make and implement decisions. Institutions at all levels must have the resources, skills, experience, and culture to make and implement decisions. Fiscal devolution to city regions is important in this context.

In order to ensure the implementation of decisions made at the most appropriate level Government should focus on how it can better equip local and regional leaders so that city regions can be shaped and managed to achieve more productive, liveable and sustainable outcomes. (see RTPI’s “10 principles” response to the Smith Commission

Scotland

2.260 Scottish opencast liabilities – The government will work closely with the Scottish Coal Task Force and industry stakeholders to explore alternative options for addressing the environmental liabilities associated with unrestored opencast mines in Scotland. 

RTPI response:

The RTPI welcomes this announcement in principle but would stress the need to invest in the planning service to ensure it has the skills and knowledge to deal with this complex issue.

Wales

1.133 Swansea Tidal Lagoon

The government believes that there is significant potential for the deployment of tidal lagoons and tidal range technologies. Lagoon technology could theoretically contribute up to 25TWh/year, the equivalent of 8% of the UK’s electricity consumption in 2013 of indigenous, predictable and low carbon electricity. Therefore, the government has decided to enter in to the first phase of negotiations on a Contract for Difference for Swansea Bay Tidal Lagoon (without prejudice to the planning decision on the project) to determine whether the project is affordable and value for money for consumers, and whether it will drive down costs for tidal lagoon energy in the UK.

RTPI response:

Large investment projects can have transformative effects on areas and it is essential that any such investments are planned in conjunction with social and transport infrastructure requirements and are considered in-line with their ability to provide new homes.