Plans to boost build-outs won't touch root causes, by Joey Gardiner

Planning minister Gavin Barwell is contemplating allowing councils to consider a developer's track record of building out planning permissions when deciding its new applications.

A failure to build out previous permissions would presumably become a serious black mark against future applications. This sounds like a great way to sharpen developers’ focus on construction, and tackle the frustration over large housebuilders sitting on planning permissions.

Of course, housebuilders deny this charge, but it’s not hard to see why ministers want to act. Local Government Association research shows that since 2008 only 57 per cent of consented applications have been built, and that completing a site takes an average of almost three years. In 2013 former Labour leader Ed Miliband warned that land-banking developers would have to "use it or lose it" if Labour got in, threatening the non-compliant with further taxes and compulsory purchase. Barwell’s policy idea is in the same mould.

The problem, as one director of a leading housing think-tank put it, is that "use it or lose it" was always a soundbite in search of a policy. But that lever has proved elusive and, looking at its latest incarnation, it’s easy to see why. The big question is how this policy would distinguish between the cases in which housebuilders are land-banking and those in which there are genuine reasons for not building a development out – such as withheld finance or difficulty fulfilling planning conditions. This would require planning departments to make value judgements about non-planning matters involving finely balanced arguments around business ethics and economics, which planners are not trained in.

The need to monitor and register build-out rates would place a big administrative burden upon authorities. There are also questions over how the legislation could be worded to prevent firms evading it by routeing applications via agents or other third parties.

Above all, the policy would be a departure for the planning process, which is designed to assess applications, not applicants. For a system like this to work, permissions would have to be tied to the applicant, rather than being a blanket approval of a certain physical development in a certain place. As one commentator has said, this starts to sound at best "legally questionable" and at worst a lawyers’ charter.

It is also hard to find people who think it would be effective. It is an attempt to treat a symptom of a flaw in the UK’s development model; that private suppliers are not adequately responding to demand in the way that classic economics predicts they should. But it doesn’t attempt to treat the cause, and therefore risks adding complexity and cost for little benefit. Fixing the development model will take vision and significant public intervention.

Joey Gardiner is special correspondent for Planning


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