The future of the planning system in England

In October 2020 CIOB submitted evidence to The Housing, Communities and Local Government (HCLG) Committee’s inquiry into the future of the planning system in England. The Committee has published its report, which considers the Government’s proposed reforms to the planning system announced in the Planning for the Future White Paper.

In our evidence we commend the emphasis placed on housing quality and design in the White Paper. In recent years the national housing debate has focused on housing supply, often at the cost of a sensible consideration of the quality and location of the final product. We welcome the efforts outlined in the White Paper which seek to reverse this trend.

However, a central message in our evidence is that the Government’s diagnosis of the barriers to housing delivery is overly simplistic. The proposals in the White Paper place too much emphasis on the planning system and overlook a range of additional areas that must be addressed if the housing development process is to be reformed to achieve the Government’s aim to build better looking homes, faster. These areas include the role of SME housebuilders in improving build out rates, the land market, direct public construction of housing, the resourcing of local planning authorities, and the importance of consulting with the full breadth of stakeholders impacted by the planning system.

We are pleased the Committee’s report picks up on several CIOB recommendations in each of these areas. Our evidence highlights structural issues in the housing delivery system, the dominance of volume housebuilders, and the accompanying negative impact on build out rates. Volume housebuilders are crucial to a successful housing delivery system and will continue to provide a significant proportion of the new homes in England. However, in recent decades they have come to dominate housing supply output as SMEs have struggled to recover from the financial crisis. SMEs built 40% of new homes in 1980s, 23% in 2008, but now build only 12%.

In line with CIOB evidence the Committee recommends that the Government should incentivise SME builders through the provision of land, access to which is a major barrier facing SME housebuilders. The challenges facing SMEs is a topic CIOB policy will be investigating as part of our research programme, so we are happy to see the Committee join us in raising concerns about this part of the sector.

The report also picks up on CIOB’s recommendation that Local Planning Authorities (LPAs) be properly resourced to ensure an efficient construction process. Our members are clear that it is lack of resourcing rather than work ethic or skills at LPA level that often causes delays in the planning process. Accordingly, in our evidence we call for a comprehensive resourcing strategy in advance of primary legislation, to clearly explain how the various skills needs of the planning system will be met.

Our evidence also cites the diminished role of public sector construction in housing, and the Committee picks this up in several recommendations. Alongside the diminished SME housebuilding sector, the falloff in public building has led to an oligopolistic market dominated by a few volume housebuilders. A long-term programme of public construction, alongside incentives for SMEs, would give a clear pipeline of building activity thus providing the certainty on which the construction sector thrives. From a consumer perspective, this would also ensure the construction of a range of types and tenures of housing to meet local need.

The dysfunctional land market is creating a negative feedback loop in the construction process and, in our evidence, we urge the Government to address this. High land costs force developers to dedicate a disproportionate amount of their project budget to fund the initial land purchase in a highly competitive market. In order to fund this purchase and see off intense competition, developers must drive down costs elsewhere in the process, typically design and quality. This negatively impacts the final product. The Committee has taken on board our call for a reform of the Land Compensation Act 1961, specifically the issue of ‘hope value’, in order to address the imbalance.

Planning affects all stakeholders in the built environment, and CIOB is delighted to bring the construction sector’s perspective to the debate. We welcome the Committee’s findings from their inquiry and the recommendations made. Ensuring quality in our built environment continues to be central to our mission and we look forward to engaging with the Government as the new planning system takes shape.

The Committee’s final report can be found here.