Housebuilding – another great failure from the Coalition

Not even the New Year yet and there is another dire warning about the housebuilding collapse – this time from one of the Government closest thinktank friends, Policy Exchange.  In between Xmas and the New Year is an unusual time to publish a report, but I guess they know what they’re doing.

Their report is exactly what it says on the tin.  It’s called ‘Planning For Less’ and it concludes that the abolition of Regional Spatial Strategies (and therefore regional targets for housebuilding) has resulted in local authorities planning for 270,000 fewer homes than before.  PEx say that the Government’s expectation that abolishing the RSSs would lead to more homes being planned has proved profoundly wrong.

Well over half of all councils have used their new powers  to scale back previous plans.  And worse – the report shows that the cuts in planned housing figures are highest where the need to build is greatest.  Targets have been cut by over 8% in the south east and by more than 18% in the south west.

In response to the report, DCLG made the obvious point that the targets set under the RSS system were not being met anyway, inferring that it doesn’t matter that the targets have been slashed.  PEx say emphatically that it does matter: the lower figures chosen by local authorities are important in political terms. They are seen by many local people, councillors and MPs as more legitimate than regional planning figures, or other figures imposed by the centre.’   The new figures, they argue, will act as a ceiling and will  give succour to those who wish to resist development.  The development process will be the same – just with smaller numbers in it.

The abolition of the regional structure is the disastrous result of political dogma, and was done just as the RSSs were beginning to have an impact (any system would have been overwhelmed by the financial collapse in 2008).  The maintenance of the regional system in London – where the mayor has the powers – illustrates a contradiction in the Government’s approach.

Regional targets were only ever one part of the answer but they reflected detailed assessments of need and demand and set the benchmark and expectations for what should happen in each area.  Of course targets in themselves do not improve the economic circumstances within which builders are operating, nor do they impact on developers’ decisions on whether to use or sit on their land bank.  These are the areas where the Government should now be focusing its attention.  Instead they pursue failed policies like the New Homes Bonus – which seems to be being used by most councils to fill holes in their budgets rather than helping with housing development.

The RSS system may not have been very popular but it was based on a rational assessment of evidence.  What we are left with now is a system that is dependent on local political pressures and increasingly hysterical exhortations to build from Ministers.

There is a crumb of comfort for the Countryside Alliance wing of the Conservative Party, as the report concludes that ‘The widespread fear that the Coalition is set to concrete over the countryside with new housing is, in the light of (the) report, not borne out.’

The Government is floundering about, trying to talk up housebuilding whilst adopting policies that will reduce it further and failing to act on the real barriers to development.  It is one of the Coalition’s greatest failures.

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  5. One of the main reasons that the RSS were abolished, is because the relevant RSS proposed more than 10000 more dwellings in Grant Shapps’ Constituency, Welw.yn Hatfield which he did not agree with and had campaigned against. More important to pander to NIMBY’s than address housing need. Why was he made Housing Minister ? Completely inappropriate choice as he proved.

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