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Wednesday 10 December 2003
The planning process is the main reason for the shortage in housing supply, according to the interim report of the Barker Review which was published today.
The report also highlights regionalised shortages in affordable housing, and the skills shortage in the construction industry, as reasons for the highest house price rises in Europe.
Although the draft version does not make recommendations for action, it analyses the issues, and will make uncomfortable reading for politicians, planners, landowners and many in the development industry.
On the planning process, Kate Barker says: "The planning system is complex, timescales are often unacceptably long, and the requirements of planning can be used to prevent development." The report states that the number of major housing applications refused has increased by 60% in four years, from 51% in 1998 to 25% in 2002.
Planning Minister Keith Hill commented:
"The planning system has the potential to deliver so much for the community, from affordable homes to health centres to parks and open paces. The problem is the system is simply too slow and fails to deliver what's needed when it's needed. We need a radical solution to simplify and speed up the process".
"This new optional charge is the solution. It will give developers a choice. If they wish to negotiate a traditional section 106 agreement then they can. But if they want greater speed and certainty they can pay the charge, leaving them free to get on with things and the local authority the resources to spend on community projects - green travel plans, education facilities or road improvements. That's good news all round."
But some commentators, such as the Campaign to Protect Rural England (CPRE), criticised the measure for fear that it would lead some councils to attempt a higher charge on greenfield land thereby giving councils a financial incentive to support greenfield development. The Town & Country Planning Association is concerned that the new charges might cause inequality between different council areas or lead to inconsistent approaches being taken from one authority to the next.
If you would like more information on this, please contact Gareth Epps on 0118 983 9454.
Pre-Budget Report
TWENTY YEARS of industry lobbying appear to have paid off as Chancellor Gordon Brown signalled yesterday in his Pre-Budget Report that the Treasury is to take steps to introduce a tax-transparent vehicle for property investments. The government hopes that a new investment vehicle would improve liquidity and transparency, provide access to property for long-term savings and could help to expand the private rental sector.
For two decades the property development industry has been lobbying the government to introduce a tax-transparent listable property investment vehicle in order to increase institutional and retail investment in the property market. Although American Real Estate Investment Trusts (REITs) are the most commonly cited examples, similar investment vehicles exist across North America and Western Europe. With France and Hong Kong recently moving to introduce REIT-style products, the UK is the only G7 country without this form of investment opportunity. US funds have grown enormously in the last decade and now have a market capitalisation of over $160 billion.
The property sector has understandably welcomed the move as some sources were predicting that without REITs quoted UK property companies could expect to lose sixty per cent of their value over the next decade. David Hunter, president of the British Property Federation and Chief Executive of Aberdeen Property Investors said of the Chancellor’s announcement, ‘[it] says exactly what we hoped it would say.’
In addition to raising a forecasted £1.1bn for the government if REITs are given the go-ahead the tax-transparent nature of the vehicle would allow pension funds, life assurance pensions business and tax exempt friendly societies to join the pooled funds while protecting individual retail investors from double taxation and some capital gains tax.
A Treasury consultation document is now expected alongside the 2004 Budget and the first British REIT tax-transparent property vehicle could be launched in mid-2005.
Planning Bill - report stage report
The Planning Bill has now left the House of Commons for what could well be a stormy passage in the House of Lords. During its Report stage this week in the House of Commons (the final discussions on any Bill), new clauses were introduced to add flexibility to the Section 106 regime and alter the parts of the Bill relating to compulsory purchase and Crown immunity.
Launching the new 'planning contribution' scheme included in the Bill, Planning Minister Keith Hill said:
"The Government's objectives are therefore to provide greater transparency and certainty for all stakeholders in the development. Our proposals also recognise that the ability to use negotiation to tailor contributions to the circumstances of an individual site is important. We want speed and certainty where possible, and flexibility where necessary".
There was broad support for change, although Opposition MPs raised a large number of concerns about the proposed approach, and the Conservatives voted against the clause. In particular, MPs noted the odd approach of introducing new legislation while the consultation process was still ongoing.
Queen's Speech debate welcomes affordable move
The annual Queen’s Speech debate on local government and housing showed a greater than usual interest in planning and development issues. The returning Planning & Compulsory Purchase Bill is to come back for Report stage next week. Secretary of State John Prescott promoted it as ‘part of the wider strategy to reform the planning system, making it fairer, faster and more predictable’
He claims the bill will both support major infrastructure and regeneration projects and ‘strengthen the opportunity for local people to make their views known and to have a say in the future of the area in which they live’. Both these points were contested by Conservative and Liberal Democrat members.
The report stage will also see a Government amendment introduce the new optional ‘planning charge’ as an alternative to Section 106 agreements. This caused cross-party concern that social housing would be built separately from the other housing. Conservative spokesman David Curry said ‘We do not want to return to the ghettoisation of social housing’.
The Conservatives and Liberal Democrats also criticised the bill for being complicated and taking away powers from local government. Liberal Democrat spokesman Ed Davey said:
‘The […] Bill clearly shows that such powers will not be passed down but will come up from elected bodies to unelected bodies[…]’
Kenneth Clarke agreed, stating that he feared the bill would strengthen the distant and regional aspect of the planning system and make the process more, not less bureaucratic. He also lamented the current system and said that current so-called public consultation attracts only special interest groups to make representations.
Public involvement was further discussed by Dr Ashok Kumar (Labour), who said: ‘For the first time ever, a Government have decreed that all planning authorities will have a statutory duty to state a policy of public involvement in the planning process’
‘We need a concept of involvement and participation that goes further than merely allowing people to let a planning committee know their views about a project that has, for the best part, been predetermined.’
He recommended ‘planning for real’ exercises, virtual technology for the viewing of plans, and planning aid, whereby planners acting in a voluntary capacity give advice on third-party rights and on the merits and demerits of planning applications to communities and individuals. This intends to help communities engage properly with the planning process and develop planning advocacy skills. |
