In her first speech as Chancellor, Rachel Reeves outlined a number of steps the Government would take to drive economic growth, including restoring mandatory housing targets, relaxing planning restrictions for building on ‘grey’ parts of the Greenbelt, and ending the ban on onshore wind turbines. This announcement also came with the promise of a new draft National Planning Policy Framework (NPPF).
In its manifesto pledges, Labour set out the ambitious target of building 1.5 million homes during this parliamentary term. This equates to 300,000 homes per year. The last time the country saw this many houses built in a year was in 1970, and almost half of these were built by local authorities. Many in the industry claim that the main barrier to housing delivery is the localised nature of the planning system. This places the burden of planning permissions on underfunded local authorities that often are pressured into blocking developments owing to small numbers of organised objections. There is merit in this claim; the average time taken to obtain local authority outline planning permission for a development was a year in 2023, compared to 13 or 14 weeks in 1990. The Government appears to have acknowledged this barrier, reintroducing mandatory housing targets on local authorities and promising to hire 300 additional planning officers across the country.
What has changed so far?
So far, real change in housing delivery has yet to come to fruition – it has only been a month after all since the new government took office. 300 planning officers across the country equates to around 0.8 planning officers per local authority, which is unlikely to have a real impact on the backlog of planning applications at this stage. Previous governments have repeatedly failed to meet manifesto targets for new home building, despite having set mandatory housing targets for local authorities. So it is also unlikely that reintroducing these will have the impact that the Government needs to achieve its targets.
Another barrier to overcome is facilitating the development of the infrastructure that would be required to support large scale housing delivery, such as grid connections, transport links, GPs, hospitals, schools, and more. If the Government is to succeed in the delivery of 1.5 million new homes during this parliament, the country would need about 150 million square feet of additional warehousing alone. With the cancellation of major public infrastructure projects such as HS2, the country has gained a reputation for being unable to overcome barriers when it comes to delivering large scale infrastructure projects.
In order to face planning and infrastructure barriers, the Government has pledged to use greater devolution deals and partnerships with metro mayors. To this end, Deputy Prime Minister Angela Rayner MP (who is also Secretary of State for Housing, Communities and Local Government) has brought together metro mayors from across the country to work together to take on powers in areas like transport, adult education and skills, housing and planning, and employment support. The current Government benefits from sharing political allegiances with influential metro mayors such as Andy Burnham and Steve Rotheram, where previous Conservative administrations would have found partisan divisions.
However, granular detail on how these partnerships might lead to unlocking infrastructure development is yet to be outlined. Those in the industry who call for more radical change to the system have requested solutions such as regional authorities taking on more responsibility for implementing and executing development strategies from a regional level in order to supersede slow and discretionary local authority planning. Alternative methods of fast tracking infrastructure delivery could include expanding the Nationally Significant Infrastructure Project (NSIP) regime to include more infrastructure projects. The Government has so far initiated a consultation to consider incorporating larger onshore wind projects into the NSIP regime. This inclusion would allow for national-level consent decisions through an expedited process.
It is clear the Labour Government has more political will to tackle planning barriers than previous administrations, and this was reflected in the King’s Speech, which saw the announcement of a new bill on planning and infrastructure. The King stated that ‘my ministers will get Britain building, including through planning reform, as they seek to accelerate the delivery of high quality infrastructure and housing’. This speech stands in stark contrast to the previous King’s Speech in November 2023, which made no mention of housing delivery. To overcome the planning barriers and stimulate real progress in housing and infrastructure delivery, the Government will need to enact major policy adjustments to support its strong rhetoric for change. The industry will hope that these changes are included in the new Housing and Planning Bill.
Is real change possible through planning reform?
While the planning system undoubtedly causes delays in development across the country, it is arguably not the biggest problem the industry faces. Building costs have risen by 36% since May 2020, while soaring interest rates have made borrowing far more expensive. The result is that housebuilding is becoming an increasingly risky investment. Labour’s ‘secureonomics’ means that Treasury funding to support development is unlikely to take place on a meaningful scale.
