In November, the Chancellor’s Autumn Budget announced the first in a new generation of housing deals between central government and local authorities. Oxfordshire’s six councils signed up to a provisional accord under which they will commit to a housing target in return for additional government infrastructure funding.
The Budget announcement revealed that similar deals are already being negotiated in other parts of the country. Why did Oxfordshire find itself at the head of the pack? And what are the implications of the Oxfordshire accord for other local authorities?
Ian Hudspeth, leader of Oxfordshire County Council, says local officials got wind of the fact that central government was keen to do a growth deal just after the general election. "They gave an indication that they would be open for a deal," he said, speaking to Planning in December. "Before the end of July we were given the go-ahead to develop this proposal, and by the end of September we had done it."
Oxfordshire’s councils already had a track record of working together on economic development and housing issues through the Oxfordshire Growth Board, a body comprising the county council, five district councils – Oxford City, Cherwell, South Oxfordshire, Vale of White Horse and West Oxfordshire – and the Oxfordshire Local Enterprise Partnership. It was with the Oxfordshire Growth Board that the government struck the deal.
The councils’ side of the bargain consists of producing a joint statutory spatial plan by 2021 that will support the delivery of 100,000 new homes between 2021 and 2031. For its part, the government has agreed to provide £150 million for infrastructure to unlock housing sites, to be paid in £30 million instalments over the next five years, plus £60 million for affordable housing and £5 million to boost plan-making capacity.
The deal is conditional on the agreement of a delivery plan that will show how the money is to be spent. "Before they send the cheque over, they want to know that we are going to work together," said Hudspeth, speaking in December. The government told the councils to submit the plan by the end of last month, a timetable Hudspeth described as "incredibly tight".
However, last week, it was revealed that this timescale had slipped by several weeks. A growth board spokesman told Planning that the authorities were still working with government officials to finalise the plan and it would only be submitted to the Ministry of Housing, Communities and Local Government once all the constituent councils agreed, which the board says will happen this month.
The Oxfordshire deal forms part of a broader government move to boost housing delivery in the sub-region. In the Budget, it also backed the recommendation of advisory body the National Infrastructure Commission that a million new homes should be built in the Cambridge-Milton Keynes-Oxford growth corridor by 2050. James Stevens, director for cities at the Home Builders Federation, says the government’s intent is clear: "It is a dynamic part of the country where the economy is most likely to grow and the houses are needed. That is why we are seeing this concerted action on behalf of the government to at least anchor one end of that corridor."
To increase delivery, government has had to take on board local authorities’ concerns about their ability to plan for more housing without the provision of supporting infrastructure, argues Catriona Riddell, strategic planning specialist for the Planning Officers Society, which represents local authority planners. "There has been a reality check for government, which has realised that local authorities’ complaints about the infrastructure deficit were genuine and they were going to have to tackle that or nothing was going to happen," she says.
Oxfordshire’s strategic housing market assessment, carried out in 2014, recommended that up to 106,500 homes were needed across the county by 2031, a total that has been incorporated into the county’s adopted and emerging local plans. Therefore, the target enshrined in the housing deal is no more than that to which the councils were already committed. However, it is considerably more than would be required under the government’s proposed new methodology for calculating housing need, argues Robin Shepherd, a partner at consultancy Barton Willmore.
"Under the standard methodology, the numbers go down by about 35,000 homes, so the timing of the funding in relation to the introduction of the standard methodology is interesting," he says. "It could be seen as an extra sweetener to say: ‘Carry on as you were, don’t provide for less.’"
The other housing deals revealed by the chancellor to be under negotiation are in areas where there are combined authorities or metro mayors (see below). Riddell says the Oxfordshire deal is significant because it is not a combined authority and therefore it opens the door to other groups of councils in the south of England with similar loose arrangements. "The original plan for housing deals was that they were part of devolution packages," she says. "In the southern half of the country, there is less appetite to go down the combined authority route, but that is where there are big challenges around housing delivery. So the government is now saying that non-combined authorities are going to get access to these deals, but there are certain things you need to put in place in order to do that."
Chief among those is the joint statutory spatial plan. "That is quite a progressive step," says Antony Pollard, economics director at consultancy Turley. "A number of the conurbations and large joint planning areas are debating whether to go for statutory or non-statutory status. There is a clear expectation from government that there will be a statutory plan as part of housing deals, and that authorities must recognise they will be held to account for higher delivery figures."
In Oxfordshire, adherence to a statutory plan should help tie the various councils to a common set of objectives, say commentators. In September last year, South Oxfordshire broke ranks with the other members of the growth board and declined to sign a memorandum of co-operation on sharing housing provision.
"You can’t have a joint statutory spatial plan where different parties have different housing numbers," says Hudspeth. "We have got to agree those numbers and come to the table. There will be compromises from all areas to get an agreement. Government is keen for us to stop having those arguments and be talking about delivery rather than numbers."
Oxfordshire’s district councils declined to speak to Planning about the housing deal before the delivery plan is agreed. Given that each authority has to approve the finalised deal over the next few weeks at full council meetings, agreement is not a foregone conclusion. Oxfordshire’s councils have an accord on the table because of their past record of co-operation, but there are still likely to be some difficult conversations to be had before all of the signatories to England’s first housing deal are ready to put pen to paper.
Where will the next housing deals be struck?
In the Budget, the chancellor announced that "the government will support more strategic and zonal planning approaches through housing deals in the South East". Home Builders Federation director for cities James Stevens believes that other areas within the Cambridge-Milton Keynes-Oxford corridor, including Cambridge and Peterborough, are likely to be among the next to sign up.
The Planning Officers Society’s Catriona Riddell predicts authorities in the Thames Estuary, another area the government has earmarked for growth, will follow suit.
The Budget also revealed that housing deal negotiations are underway in areas including Greater Manchester, the West Midlands, Leeds and the West of England. However, few details have yet been made public of how those deals are progressing.
In response to the Budget announcement, West of England mayor Tim Bowles confirmed his region is "working towards an ambitious housing deal with government", without divulging any further particulars. Meanwhile, a spokesperson for the Greater Manchester Combined Authority told Planning that discussions with central government on a housing deal are ongoing and it is hoped that they will conclude in 2018.