Pension funds 'could pay for new wave of large-scale schemes'

The expert who advised the Labour government on its eco-towns policy has called for a new town development delivery vehicle which would use pension fund cash to buy land for proposed new large-scale developments.

The coalition’s housing strategy, published last week, announced that the government would next year run a competition for proposals to create new towns and urban extensions, while this week's Autumn Statement announced the aim of attracting more pension fund money into infrastructure development.

Speaking at today’s Town and Country Planning Association (TCPA) conference in London, David Lock, chairman of town planning consultancy David Lock Associates, said that new, locally-based vehicles could marry the two aims.

He said: "This country housed two million people in new towns following the second world war, and got all the money back with interest. It is a long term investment, of the type that pension funds should be very interested in."

But he said that rather than handing a national body such as housing and regeneration quango the Homes & Communities Agency responsibility for bringing forward the new wave of large-scale developments, locally-based vehicles should be established.

He said: "You need people working on these bodies who are eating and breathing the development – you don’t get that with national bodies."

And he called for any such new body to have powers of compulsory purchase to enable the assembly of land. He said: "That is how we did it before. You don’t need to necessarily use the powers, but having them there will encourage land owners to get involved, and to share the profits."

Lock said that the model would work on large development sites which already have planning permission but are stuck in the system for finance reasons.

He said: "The private sector is good at lots of things but not at organising large scale development without public sector help. Thatcher thought the private sector could do everything and we lost impetus for this sort of project."

Emma Cariaga, development director at developer Land Securities, told the conference that development schemes were much more likely to succeed where the public sector had a land interest.

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