Housing Development: Localism Policy - Research Paper Example

How is the planning system changing in relation to housing delivery? Will “localism”, built around incentives and greater local control, deliver moreor fewer homes than a target-based, top down, approach? 1. Introduction Gaps between demand and supply have existed for over two decades in the United Kingdom. This problem has recently resurfaced in more stringent forms than ever before. The United Kingdom has one of the lowest housing vacancy rates in the European Union at some 3%. This problem has also been compounded in recent years by the steady reduction in house building across the United Kingdom. Around 2007 the annual housing completions in England topped at around some 175,550 but only last year this figure fell down sharply to some 102,720 which represents a straight loss of 40% in merely three years. This is not the first time that this problem has surfaced in this form. Various governments in the United Kingdom have been battling the house building problem since 1993. The governments used a combination of planning system approaches in order to stimulate house building but without significant results. Local planning authorities were used to settle housing targets within their RSS (Regional Spatial Strategies) along with Unitary Development Plans / Core Strategies and these authorities were expected to identify and maintain rolling five year supplies of developable land that could be used for house building in order to meet the projected targets (BNP Paribas, 2011). The annual housing completions that took place between 2002 and 2011’s first quarter are provided in the figure below according to geographical distribution. Figure 1 - Annual Housing Completions (2002 to 1st Quarter 2011) (Source ONS) Overall the planning system has been severely criticized on quite a few fronts because of its inability to deliver on the issue of house building to fulfil the exact needs of the local populations. 2. Criticism of the Planning System A critical appraisal of the planning system’s weaknesses must be undertaken to see how the new localism policy aims to solve these very problems. The planning policy has largely been criticised for being a large centralised and bureaucratic system that is too complex for the average person to fully comprehend. The rules, procedures and standards put in place by the large bureaucratic machinery to run the planning system have often been criticised for being incomprehensible to the common person. It is often commented that an expert is required merely to navigate the policy matters in the planning system. As an example some 3,254 new pages of guidance have been added to the existing planning system since 2005 in order to make it more comprehensive and detailed (Lee, 2011). Another reason for criticising the planning system has been its extraneous costs when compared to other house building policy schemes. It is estimated that some 2 billion pounds is squandered annually in the planning system which is around 13% more in real terms than what it was some five years ago. This is still true although the number of applicants for the planning system’s house building scheme have dropped by some 32%. Similarly the planning system has also been criticised for alienating and disempowering communities because of its inherent design. It is argued that many people choose to resist the changes brought in by the planning system because of its disenfranchisement of the local communities. The potential wider benefits projected by the planning system are assumed to be neglected when people feel alienated due to the red tape bureaucratic structure of the planning system. Furthermore a major allegation placed on the current house building approach has been that it has failed to deliver effectively. Though the system has targets and the like but it has delivered one of the lowest rates of house building in the European Union. The failure to deliver as well as delays in processing applications has had associated costs of some 3 billion pounds a year for the national economy (Lee, 2011). 3. Solutions to Current Dilemmas At this point in time the solution to the house building dilemmas can be reverberated on multiple fronts. One of the prime solutions presented by the current government is the Localism Bill that would transfer the current decision making authority and power to the local communities. It is felt that the involvement of the local communities would reflect localised demand that could easily be scaled up to procure fitting funds. Overall this would help to balance the localisation of resources such that resources would be diverted towards communities that most need them. Moreover the uneven developmental model projected by the central authority would also disappear as local demands would be projected to allocate resources. This would allow certain communities to scale down the housing demand while the housing demand would be scaled up by other communities depending on their actual needs. 3.1. Sustainable Growth In addition to this the house building environment would be boosted using incentives that would promote sustainable growth. In order to go for sustainable development, the Presumption in Favour of Sustainable Development has been initiated. Moreover the National Planning Policy Framework has been initiated in order to develop a comprehensive plan for house building. In order to sustain the growth for house building, the Growth Review has also been taken into consideration and the changes envisioned by this review would be incorporated into the current system in order to improve its performance. 3.2. The Decentralisation and Localisation Bill In a bid to improve the current situation, the Queen’s Speech set out the Coalition’s legislative program for the current Parliament on the 24th of May 2010 which announced over 24 bills (Number 10, 2010 a). The most important and relevant of these is the Decentralisation and Localism Bill that has been designed in order to devolve more power to councils and neighbourhoods as well as providing local communities more control over housing and planning decisions. 3.2.1. Major Provisions The major elements of the bill that are (Number 10, 2010 b): Abolishing the RSS (Regional Spatial Strategies) (UK Parliament, 2010); Retuning the decision making power to the local councils for housing and planning decisions; Abolishing the Standard Boards regime; Providing the councils with a general power of competence; Providing the residents with the power to instigate local referendums on any local issues along with the power to veto any excessive council tax increases; Providing greater financial autonomy to local government and community groups; Creating Local Enterprise Partnerships as a replacement for Regional Development Agencies which will act as a joint local authority to promote business bodies that would promote local economic development; Complete abolition of Home Improvement Packs; The creation of new trusts that would provide simpler ways to provide homes for local people; A review of the Housing Revenue Account. 3.3. Decisions on Housing Supply In addition to this the Chief Planners throughout England have been informed by the government that decision of housing supply (as well as provision of traveller sites) would be available with the Local Planning Authorities and it would exclude the framework of regional plans. Furthermore the government provided a 1.66 billion pounds grant to the already 6.2 billion pounds Local Government Contribution savings. This package also included a 146 million pounds cut in the allocation for Housing and Planning Delivery Grant which represents a 100 percent of the allocation that was announced by the previous government (Town and Country Planning Association, 2011). Moreover the Local Planning Authorities have been provided with a wide range of authority on excluding private residential gardens from the category of developed land from Annexure B. The national indicative minimum density of 30 dwellings per hectare has also been revoked from paragraph 47 so as to allow local councils’ greater freedom in deciding what housing density would be required in a particular community (Open Source Planning, 2010). 3.4. HMOs The local councils have also been granted far more power in managing shared homes in their respective areas. The Local Planning Authority will decide where landlords need to provide planning applications in order to rent their properties out to unrelated tenants. These properties will be known as Houses in Multiple Occupation (HMOs) and the local councils will decide on their status. The housing dilemma has also been resolved by allowing the relaxation of planning laws and building regulations for new schools. The current laws for deciding which buildings could be used as schools are being changed so that it would become easier to convert existing residential and commercial buildings into schools. This would provide far greater flexibility to local housing councils to decide what buildings ought to be used for what purpose without having to fit into a larger regional picture of any kind (Clark, 2011). 3.5. Local Housing Trusts The creation of Local Housing Trusts has also been facilitated in order to develop trusts that would make it easier to provide community led affordable housing. These proposals would ensure that the local housing trusts would provide communities with planning grants themselves without having to indulge in large bureaucratic procedures. The devolution of statutory planning procedures would ensure that initially around some 90% of the community’s support would be all that is required to circumvent planning procedures from the centre. In this manner the local council would be able to plan its course without having to lodge any applications for planning permissions (TCPA, 2010). 3.6. Closure of the National Housing and Planning Advice Unit The National Housing and Planning Advice Unit have been closed down with immediate effect in an effort to support house building as a bottom up activity rather than a top down activity. The transformation from a centrally planned system to a locally run council has its advantages and disadvantages at the same time. The central planning function in the previous system ensured that localities in threat of a low level of development would be taken care of as well. However areas such as those experiencing urban decay would need to be protected as the local councils may not be as effectively organised. In order to protect the interests of the local councils that would be vulnerable to be left out of the current house building initiatives, the current government has provided a Regional Growth Fund totalling some 1 billion pounds. Areas and communities that are at particular risk of being affected by public spending cuts have been propped up using these measures that would operate for three fiscal years initially (2011 to 2013). This will particularly help areas that are dependent on government led employment and as the current developmental model turns to private sector led development such steps are necessary to ensure sustainable development. 4. Impacts of the New House Building Mechanism Although it is too early to reliably determine the exact consequences of the new house building mechanism but efforts are already underway to gauge the effectiveness of the new system. A study was conducted by BNP Paribas Real Estate, a leading real estate developer and seller throughout England in order to assess the impacts of the new house building policies. The study comprised of some 291 local authorities and each authority was investigated for their RSS housing target as well as the subsequent increase of decrease projected as the new house building system came into being. The intention was to investigate if the new system’s implementation had created the much talked about impact of changing the local house building targets at all as the house building and planning functions shifted to the local authority from the RSS. The study found out that around half of England’s local authorities still had the same targets for house building as carved out in the RSS plans. This indicates that housing targets for around half of all localities remained unchanged and for authorities that registered a change, only some new 85,000 houses were added as demand. In addition to the above, another 14% of local authorities confirmed a change in their housing targets while only some 2% increased their targets while another 12% made cuts in their previous RSS housing targets. When the overall change is considered for housing targets (for local authorities whose targets have increased and decreased) it becomes apparent that the overall housing demand has received an overall cut of some 20.6%. To make things simpler, this means that the new system has resorted to slashing one fifth of the RSS’s settled housing targets. Other than authorities that have confirmed changes, there are local authorities that have not made any decisions yet and these contribute to some 36% overall. However most of these frozen local authorities (some 90%) have made it clear that when they make a decision, there will be changes to the previously available RSS housing targets. Figure 2 - Change in housing targets for English local authorities (Source BNP Paribas Real Estate) It can also be argued that if the existing trend for cuts amounting to some 20.6% is taken as applicable to the remaining undecided local authorities then the total decrease in demand all across England comes out to be some 31,400 houses annually. This decrease in house number represents a cut of some 13% overall when seen in relation to the overall RSS targets. Moreover when this figure is put relative to the actual completion levels then it would signal a loss of over 30% for the overall housing targets. 5. Major Areas for House Cuts It is important to consider where these changes are taking place in order to realize if the centralized housing planning functions were not really functioning. When these cuts are considered in terms of regions it becomes apparent that the variations are markedly different from each other. The regions of South East and South West have had the greatest cuts at some 18% and 27% respectively while there are still a large number of local authorities in these regions in stasis at some 50% and 34% respectively. Overall the decrease in housing for these regions will be at some 16,712 and 5,822 per year respectively. On the other hand the North East and the Midlands would see cuts of some 3,419 and 3,838 houses respectively. The local authorities located in the North West were the most active in confirming their targets with only 20% local authorities in stasis although the number of confirmed reductions is high at some 18% and the overall housing cuts are estimated at 1,616 houses per year. The overall change for housing cuts is represented in the table below. Region Cuts to Date Local Authorities in Stasis Total Housing Loss per year North East -1.9% 45% 3,419 North West -17.9% 20% 1,616 Midlands -6% 26% 3,838 South East -18.2% 50% 16,712 South West -26.5% 34% 5,822 Total -20.6% 37% 31,407 The research also showed that in the provided climate the best possible area for development was the South East because the loss of potential housing was the most severe here at some 53%. It was indicated that some 16,700 homes would be lost per year in a region which already saw just 49,200 new house completions in 2010. It must be kept in mind that completions and targets are not the same thing. The original RSS targets for England were some 240,000 houses per year but only 43% of these houses were delivered in 2010 which effectively reduced the actual turnout. The local authorities created to handle this issue are all in favor of reducing the already inflated house building figures projected by the RSS. The addition of the localism agenda will provide residents with greater input in planning decisions as well as the specter of “NIMBYsim” that has been raised in regards to the new development. Overall this indicates that the house building targets in England are being reduced by local authorities to reflect the actual house building capacity. In the longer run this will provide for a fairer assessment of actual demand and supply and thus the gap between them to be identified. The local authorities would end up providing better services to residents as the housing demand and supply projections would be reflective of the situation on ground. It is also clear from this research that the housing demand projected by the RSS policies was unrealistic and could not reflect demand and supply in proper measure. 6. Manchester City Council’s Role The Manchester City Council is the local governmental authority deputed with the duties of looking after affairs concerning the city of Manchester as well as neighboring boroughs that constitute the Greater Manchester region in England. The council is composed of a total of ninety six councilors with three councilors representing each of the total thirty two wards in the region. At the present time the council is being controlled by the Labor Party under the directions of Sir Richard Leese. Most of the council’s staffing is based in the Manchester Town Hall though other staff is placed in the actual localities and neighborhoods. Along with the rest of the country Manchester is also involved with the acts of localization of governance when it comes to housing as well as other forms of service delivery. One such initiative on the part of Manchester’s City Council was conducting Early Years Consultation that was an online survey designed to gauge the expectations as well as problems of residents who would likely require housing and other social solutions in coming years. The contention behind the survey was to establish an accurate housing forecast for the coming years along with seeking people’s one on one attention over the new localization trends. The results are expected to be announced in February 2012 after which policy making initiatives for the localized neighborhoods will actually begin. 7. Conclusion The long implemented centralised planning top down approach to house building by the government failed to produce the desired results though it spanned some two decades. In order to deal with an unusually high demand and supply gap between house building the current government has embarked on the devolution of the existing house building structure. The major exponents of this new structure are the provision of new power to local housing councils that would be able to decide on local housing problems including decisions on commercial and school based buildings. In order to protect the interests of communities and areas that were protected under the centralised regime, the current government has allocated a three year long support program. Throughout all of the new structure the emphasis lies on involving the local communities to deliver fitting local solutions that are sustainable. However it must be noticed that the duration of the support program for sustenance is rather short at this point in time. In order to allow long term sustainability of the new house building approach it would be necessary to support the entire scheme for a longer period of time that could be decided according to factors on ground. Overall it can be said that the new house building approach would certainly allow for the creation of more reflective housing needs but it would need more support from the government in order to take off the ground. 8. Bibliography BNP Paribas, 2011. Housing the Nation. [Online] BNP Paribas Available at: HYPERLINK "http://www.insidehousing.co.uk/Journals/1/Files/2011/6/24/ilzi-housing_the_nation.pdf" http://www.insidehousing.co.uk/Journals/1/Files/2011/6/24/ilzi-housing_the_nation.pdf [Accessed 5 December 2011]. Clark, G., 2011. Local planning for sustainable development, CPRE Annual Lecture by the Minister for Decentralisation. [Online] Available at: HYPERLINK "http://www.communities.gov.uk/speeches/corporate/localsustainabledevelopment" http://www.communities.gov.uk/speeches/corporate/localsustainabledevelopment [Accessed 5 December 2011]. Lee, M., 2011. Localism Bill - Planning Reform. [Online] Communities and Local Government Available at: HYPERLINK "http://www.planningaidforlondon.org.uk/uploads/london/mainsite/downloads/publications/leaflets/Planning%20Aid%20Slides%20June%202011.pdf" http://www.planningaidforlondon.org.uk/uploads/london/mainsite/downloads/publications/leaflets/Planning%20Aid%20Slides%20June%202011.pdf [Accessed 5 December 2011]. Number 10, 2010 a. Queens Speech 2010. [Online] Available at: HYPERLINK "http://www.number10.gov.uk/news/queens-speech-2010-2/" http://www.number10.gov.uk/news/queens-speech-2010-2/ [Accessed 5 December 2011]. Number 10, 2010 b. Decentralisation and Localism Bill. [Online] Available at: HYPERLINK "http://www.number10.gov.uk/queens-speech/2010/05/queens-speech-decentralisation-and-localism-bill-50673" http://www.number10.gov.uk/queens-speech/2010/05/queens-speech-decentralisation-and-localism-bill-50673 [Accessed 5 December 2011]. Open Source Planning, 2010. Policy Green Paper 14. [Online] Conservative Party Available at: HYPERLINK "http://www.conservatives.com/news/news_stories/2010/02/~/media/Files/Green%20Papers/planning-green-paper.ashx" http://www.conservatives.com/news/news_stories/2010/02/~/media/Files/Green%20Papers/planning-green-paper.ashx [Accessed 5 December 2011]. TCPA, 2010. The Future of Planning Report: Distilling the TCPA Roundtable Debates. [Online] TCPA Available at: HYPERLINK "http://www.tcpa.org.uk/data/files/tcpa_futureplanning_report.pdf" http://www.tcpa.org.uk/data/files/tcpa_futureplanning_report.pdf [Accessed 5 December 2011]. Town and Country Planning Association, 2011. Policy Analysis of Housing and Planning Reform. [Online] Town and Country Planning Association Available at: HYPERLINK "http://www.tcpa.org.uk/data/files/tcpa_jrfpolicyanalysis_final_report.pdf" http://www.tcpa.org.uk/data/files/tcpa_jrfpolicyanalysis_final_report.pdf [Accessed 5 December 2011]. UK Parliament, 2010. Abolition of Regional Spatial Strategies. [Online] Available at: HYPERLINK "http://www.publications.parliament.uk/pa/cm201011/cmselect/cmcomloc/writev/abolition/arss66.htm" http://www.publications.parliament.uk/pa/cm201011/cmselect/cmcomloc/writev/abolition/arss66.htm [Accessed 5 December 2011]. Read More