The Spending Review: 5 key implications

Five key talking points from this week's joint Spending Review and Autumn Statement, including the potential opportunities presented to developers by plans to allow brownfield sites in the green belt to be used for discounted Starter Homes for first-time buyers.

Osborne: set out Spending Review earlier this week (picture: Number 10)
Osborne: set out Spending Review earlier this week (picture: Number 10)

1. Green belt relaxation may present opportunities in areas that previously faced constraints. Antony Pollard, director at consultancy Turley, said that plans to allow previously developed brownfield sites to be "developed in the same way as other brownfield land, providing it contributes to Starter Homes" present an "important opportunity to enable development of houses in areas which to date have been heavily constrained albeit support will still be required from local communities". However, he cautioned: "This is not the quick fix it seems as sites can be more expensive to develop, for example due to access or contamination." Lobby groups differed over the implications of the proposal. Paul Miner, planning campaign manager at the Campaign to Protect Rural England, said: "We’re wary of moves to develop brownfield sites in the green belt - many green belt sites classed as ‘brownfield’ contain a lot of valuable open land, often historic parkland, which should be kept undeveloped." But Melanie Leech, chief executive of the British Property Federation, said: "The sites that will be eligible for this will not be lush green fields, but rather disused scrap yards and car parks which happen to sit within the green belt, and which are calling out to be more productively used." 

2. Standardised viability model could resolve development disputes. BPF chief executive Melanie Leech said that proposals for a more standardised approach to viability assessments "should go a long way to solving some of the disputes around development". Leech said that a lot of disagreements between local authorities and developers arise due to viability assessments. "It is an enormously important step and we are delighted to see it taken forward," she said. Commenting on the plan for a more standardised approach to viability assessments, and the extension until 2018 of the ability to appeal unviable section 106 agreements, David Orr, chief executive at umbrella body the National Housing Federation, said: "It is vital that the process of demonstrating viability is fair and transparent."

3. Delivery test is ‘further stick’ for local authorities. A proposal to establish a new delivery test on local authorities, to ensure delivery against the number of homes set out in local plans, represents a "further potential ‘stick’ for under-performing authorities alongside the implications of failing to identify a five year supply of deliverable land", according to Turley’s Antony Pollard. In a statement, the Home Builders Federation said that the proposed test, "along with measures to increase the supply of smaller sites, will help ensure the planning system is delivering an adequate supply of housing land". But the CPRE’s Paul Miner, meanwhile, said that the chancellor had not been clear on the implications of the test. "We’d remind him that most housing targets are undeliverable because of the reliance on private sector builders to meet the targets set," he said. "A delivery test should therefore apply to developers and the government - through providing necessary supporting infrastructure funding - as well as local authorities." 

4 Warning over impact of local government funding changes and frustration over fees. Lord Porter, chairman of the Local Government Association, said that the Spending Review had handed down a "difficult £4.1 billion funding cut over this Spending Review period for our residents and comes on top of almost £10 billion in further demand-led cost pressures facing councils by the end of the decade". "Even if councils stopped filling in potholes, maintaining parks, closed all children's centres, libraries, museums, leisure centres and turned off every street light they will not have saved enough money to plug the financial black hole they face by 2020," he said in a statement. The BPF, meanwhile, expressed disappointment that the Spending Review contained no mention of a review of planning fees. Chief executive Melanie Leech said: "The planning system still has one big problem – the lack of resources in local authority planning departments. Both the private and public sector have identified this as one of the biggest obstacles for development, and with the private sector willing to discuss how it might be able to plug the funding gap, it is frustrating that government has not engaged on this matter." Royal Town Planning Institute president Janet Askew said that, under current funding arrangements, "we need to be realistic regarding the ability of local authorities’ planning teams" to deliver the Spending Review’s housing commitments.

5. Commercial re-designation ‘creates presumption in favour of residential development’. A pledge in the Spending Review document to release land for Starter Homes which has been allocated for retail or commercial uses but has not been developed could see councils’ local plans overruled, according to Vicky Fowler, partner at law firm Berwin Leighton Paisner. "This could be a hugely important move because it effectively creates a presumption in favour of residential development, as long as that land contributes to Starter Homes," she said. "The measure would overrule a local authority’s local plan, meaning that if a council has not been able to attract investment for retail or employment then it is opens the door to residential development."

Spending Review and Autumn Statement 2015 is available here.

jamie.carpenter@haymarket.com


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