Will devolution get more homes built?


Does devolution have the potential to offer locally led negotiations to drive the development process, avoid disputes and compulsory purchase and speed up house building? asks Majeed Neky.

The Cities and Local Government Devolution Bill establishes a formal framework for the concept of bespoke devolution ‘deals’ with local areas. Leaving aside whether more profound constitutional change would have been desirable – touched on in previous posts, An enabling bill – but what does that really mean? and The Queens’ Speech  – it is clear that the Bill offers a serious opportunity for more localities to secure decentralised powers and responsibilities. However, it is also clear that the continuation of the ‘deal’ approach keeps the onus on local partners to demonstrate how devolution can drive public service improvements, economic growth and fiscal benefits. Simply invoking subsidiarity will not be sufficient; devolution, in short, must be seen to have a point.

Thus far, the main arguments deployed for devolution – most successfully by Greater Manchester – hinge on the potential of place-based working to address complex or intractable problems: supporting families with complex needs to become more resilient, helping people experiencing long-term unemployment into work, reducing the ‘skills gap’, integrating health and social care. Through the integration and coordination of different services and budgets across organisational and professional siloes, it is posited, localities can create more coherent and human ‘customer journeys’, improving the effectiveness of state expenditure in achieving outcomes and reducing the need for state intervention.

This argument has a crucial intuitive appeal, contrasting the remote Whitehall machine with the human-scale ways of working and relationships which the city-region can supposedly deliver. However, it has limitations. The integration narrative is underpinned by a tacit assumption that everyone wants to achieve similar outcomes, even if we disagree about how to get there or some of us are slower to realise it than others. The challenge is to realign different incentive and performance frameworks and ways of working to reflect this shared interest. But how about an area of policy where everyone’s interests do not align?

Along with health and social care and the web of social issues relating to mental health, family breakdown and unemployment, affordable housing is unquestionably one of the ‘wicked issues’ of our age for public policy. Yet housing delivery is not (any more) driven principally by state organisations, but by a complex set of interactions and negotiations between public, private, third sector and community interests. As KPMG and Shelter point out in a milestone report: ‘The reasons for this systemic failure [to build sufficient homes] are many and complex, because house building is a complex, time-consuming and expensive process. Crucially, it is one that takes place at the intersection between three markets: in land; construction; and home sales.’ By identifying and resolving failures in those markets, cities and regions could outpace national policy. But do they have the will to push the boundaries?

For example, one of the significant but largely overlooked new policy tools won by Greater Manchester in its latest ‘deal’ has been the ability to implement a statutory spatial planning framework at the city-region level. Previously, this was available only to London, whose Mayor is responsible for a ‘London Plan’ which sits over the individual plans developed by London boroughs. Yet simply adding another layer of planning policy – much as it may help to align and integrate the delivery of transport and utility infrastructure, community facilities and housing development – will not solve the fundamental conflicts between different interests which characterise the planning process and which planning as a discipline aims to resolve. Investors, developers, NIMBYs, conservationists, those struggling to afford a home – all want different things from the system.

It is telling that the only substantive comment on planning throughout the Second Reading of the Cities and Local Government Devolution Bill, from Baroness Wheatcroft, focused on how an elected Mayor could help resolve conflicts within a regional plan-led system. But what might an innovative, devolved approach to resolving such conflicts look like, and could it deliver results?

A core principle to bear in mind when exploring potential solutions in this area is that development inevitably creates ‘winners’ and ‘losers’ – contrast landowners extracting additional, unearned economic rent simply by owning property near new Crossrail stations, with householders losing their homes or facing years of disruption due to the construction of High Speed Two. Yet the suggestion that ‘winners’ should be able to negotiate with and compensate ‘losers’ – an economically conventional and frankly grown-up approach to compromise – is dismissed as bribery, with no legitimate place in a supposedly objective planning system. Could a local mechanism to facilitate such negotiations between individuals as part of the development management process help to reduce objections, increase approvals, reduce appeals and costs on all sides and boost housing delivery?

The sluggish, inflexible compulsory purchase system illustrates the delays, costs and acrimony generated by attempting to deal with essentially dynamic situations – the ebb and flow of property values, changing infrastructure plans, local housing needs, public opinion – through the application of static rules. Difficulties in assembling urban development sites, from several brownfield sites in fragmented ownership, has consistently been recognised as a key constraint on development viability. There are no policy tools available to address this, short of full compulsory purchase of sites by the state – at an often-disputed market value – which risks adding both conflict and bureaucracy and failing to strike the right balance between the individual and collective good. Given the freedom to innovate and develop a more collaborative approach, could localities do better? The idea of land assembly districts, proposed in the USA, demonstrates the kinds of alternatives that could be explored. Landowners in an area would come together to negotiate a price for their land as one single package, voting on whether to accept a proposed deal for the combined land parcel, with the deal proceeding (backed by formal compulsory purchase powers if necessary) only if there is a majority in favour.

Empowering different interests to mediate between themselves – much like integrating disparate health and social services around individual needs – is something that is, clearly and intuitively, best done at the place level. The bones of another compelling devolutionary narrative begin to emerge. But again, as with public service integration, the bolder the proposed solution, the stronger the case to devolve: a sub-regional plan which adds little to existing national and local policy is unlikely to be a game changer. Housing and planning, and more broadly, new approaches to mediation between conflicting interests, must be an area in which cities contemplating devolution seriously push the envelope. Otherwise we may find ourselves ten years hence, devolution deals all but forgotten and still mired in housing crisis, and wondering: what was the point of devolution?

Majeed Neky is an LGiU policy briefing associate.

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    1. Really good thought out blog. I like the idea of devolution but can’t get away from my mistrust of the Government. I keep seeing it as a way to reduce costs and also as a form of privatisation.

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