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What the new housing strategy means for local government

On 21 November David Cameron and Nick Clegg launched Laying the Foundations: a Housing Strategy for England.

The strategy received widespread coverage. New initiatives that are of particular interest to local authorities include:

  • empty homes: a further £50 million to tackle areas which have the most acute concentrations of empty homes, to be match funded by local organisations
  • a new deal for older people’s housing: part of the deal includes encouraging local authorities to make provision for a wide range of housing types across all tenures including specialised housing for older people
  • locally planned large-scale development: the strategy supports the development of large-scale development, backed by incentives, in areas where communities wish to see this
  • custom-build housing (previously known as ‘self-build’ housing): councils to assess demand for custom-build housing in their area and help to increase the amount
  • consultation on section 106 planning agreements: government to consult on reducing the length of time that must elapse before developers can seek to renegotiate section 106 agreements with local planning authorities
  • design: government to fund the Design Council to ‘support communities in shaping development in their area’, which ties in with the formal start of neighbourhood planning in April 2012.

Perhaps we should see it as a measure of how seriously government takes housing that its strategy runs to 88 pages – it only allowed itself a maximum of 52 to write the national planning policy framework.

Certainly, the housing sector has welcomed publication of a housing strategy – launched by the Prime Minister and his Deputy – as a welcome sign that housing is now a priority for this government.

The strategy pulls together existing and fresh policies and initiatives, and attempts to weave a coherence between them by arguing that, taken together, they tackle problems with both housing supply and demand, and will ‘get Britain building’.

Some, such as James Pargeter, Partner and Head of Residential Projects at Drivers Jonas Deloitte, see real cause for optimism: ‘the strategy seems to gather together combined thinking in a way that should mark the start of renewed opportunity to get housing right in this country’.

For others, there is unease beneath the relief that the strategy exists at all.

Not surprisingly, the main criticism has been that, given the scale of the crisis facing housing in England, the strategy does not go far enough. Abigail Davies, Assistant Director of Policy and Practice at the Chartered Institute of Housing, pursues the analogy between the strategy’s title – Laying the Foundations – and building a house by concluding that the housing system set out in the strategycould end up being ‘a wobbly structure’.

At a strategic level, schemes such as a government-backed mortgage indemnity programme that allows buyers to, in effect, take on more debt fails to tackle the underlying problem of the high cost of housing relative to average earnings. It’s a scheme for housebuilders not homeowners, suggests the commentator Jules Birch, who writes that ‘it must be trebles all round in the boardrooms of the major house builders.’

There are concerns too about the ramifications of the strategy at the local level. Take it’s proposal that local authorities should renegotiate section 106 agreements on planning agreements for new developments because developers now say they are no longer viable in the current flatlining economy.

One of the key components that will have been hammered out in these planning agreements will be the percentage of affordable housing that the development should include. So it is conceivable that local authority planners will be forced to reduce the amount of local affordable housing that developers provide at the same time as other parts of the council – or even other officers within their own department – are introducing new measures to increase supply of the very same thing: affordable housing.

There are also tensions between the national exhortation to kickstart the housebuilding industry and the localism agenda – so recently enshrined in legislation – which extols local authorities and neighbourhoods to take more control of their local areas. Nowhere is this more evident than in the section on locally planned, large-scale development.

The drafting of the strategy does its best to marry the neighbourly language of localism with the arrival of an adjacent new community complete with its own school, shops, transport and other infrastructure. It’s not inconceivable that there are communities out there frustrated at their lack of ability to get serious development going on their doorstep, but as the previous government’s eco-towns drive showed, it is unlikely that there will be many of them.

(As an aside, there are still four ‘first wave’ eco-towns sites working their way through the planning process in the areas of Cherwell District Council, Broadland District Council, Cornwall Council and East Hampshire District Council.)

Much will hang on the actual detail behind some of the proposals set out in the strategy. For example, the policy that all social houses sold under right to buy will be replaced by another affordable dwelling threatens to undermine the self-determination agenda that lies behind self-financing and the decision to put local authorities in charge of the investment decisions they make about housing locally. But this, along with other changes to right to buy, is still subject to consultation over the winter.

Like a number of the government’s planning and housing proposals, at first glance it is possible to see the problems that the housing strategy is designed to solve. But it does not take long to spot a range of unintended consequences. Perhaps the government will say that there is still time to get the detail right. After all, the strategy’s action plan includes a bulging list of consultations. Local authorities will need to monitor the outcomes of these to see how much the fine print differs from the strategy’s initial headlines.

This post is based upon an LGiU members briefing by Andrew Ross – Laying the Foundations – a housing strategy for England. For more information on the benefits of LGiU membership, please click here

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