Committing to growth
Author: Chris Webber and Catherine GlossopDate: 27/03/2009
Publication: Planning
The government published its response to the Killian Pretty Review last week. Put together by Joanna Killian, the chief executive of Essex County Council, and David Pretty, the ex-chief executive of Barratt, the Review came up with no less than 17 headline recommendations on how to speed up England's ponderous planning system. Many of the suggestions made perfect sense and the government was right to welcome them.
But the report also underplayed a couple of crucial and interrelated problems that need further attention. The first is that political and community attitudes towards physical development are still too hostile in many UK cities. And the second is that stronger financial incentives need to be developed to encourage and enable the timely delivery of infrastructure. Changing attitudes to growth and getting local incentives right - a key focus of the Conservatives' recently published decentralisation plans - will be essential components of any effective reform process.
The government has been trying to reform the planning system for a long time now, but little real progress has been made. According to a recent World Bank report, the UK currently comes in at 61st in the world on its effectiveness at dealing with construction permits - down from 54th in the world in 2008. In comparison, New Zealand currently comes in 2nd, Germany 15th and the USA 25th.
Planning delays and blockages are partly the result of system design problems examined in the Killian Pretty Review, but they're also strongly linked to political and community attitudes about development.
Politicians invariably commit to economic growth in their corporate plans. But there's often a mismatch between strategy and action. When confronted with the choice they're too often unwilling to approve the developments - like transport infrastructure, housing and business space - needed to support economic growth. In Brighton, for example, councillors have recently blocked two important investments despite the fact that both proposals were recommended by officials and complied with the city's development plans.
Cities can't have it both ways. Economic growth cannot come without development and a commitment to new infrastructure. Political leaders, and the communities they represent, need to adopt coherent attitudes towards planning that reflect this reality.
The Killian Pretty Review made some useful recommendations in this area, including getting councillors more involved in pre-planning discussions and providing more training on election. We've made similar recommendations in our work with cities across the UK.
But a lot more needs to be done. Getting council leaders to take personal responsibility for leading on development might help give infrastructure investment the political support and leadership it deserves. Clearer commitments to development in Local Area Agreements would also make sense. And in the longer term, introducing city regional mayors could help to knit together and overcome planning challenges across functional economic areas.
Perhaps most of all, national government needs to work on getting the incentives for development right. There's currently an imbalance between the short-term financial and political costs that cities incur through enabling development and the longer-term, indirect economic benefits that are accrued in the form of job creation and labour market flexibility.
Government has made several attempts to address this disconnect between the costs and benefits of physical development, including the introduction of Section 106. More recently, new models have emerged, including the Community Infrastructure Levy and Business Rate Supplements.
None of these tools, however, cover the full costs of development and many are not considered viable in the throes of a deep recession. Furthermore, these tools are short-term measures that fail to motivate long-term changes in planning decisions. What's needed is a planning system that allows cities to retain or share in more of the longer-term financial benefits from consenting to growth.
Inspiration can be drawn from some European cities, where planning systems are often used more proactively to attract workers and businesses, encouraging economic growth. In Germany, council planners have more incentive to develop land for residential and commercial use thanks to the local allocation of central government grants. Local councils are incentivised towards developing land for residential and commercial use by the local allocation of central government grants (linked to population growth) and through tax-raising powers. Similarly, in Switzerland, local autonomy to determine local tax rates provides an incentive to ensure adequate land for development - or risk losing inhabitants, and therefore tax income.
All major parties need to come up with workable incentives that will encourage cities to embrace development. The Conservatives have made a head start on this - calling for a localised planning regime, for councils to keep the full increase in council tax from new housing development, and the increase in business rates from new commercial development for six years.
The Killian Pretty Review is a valuable contribution to a reform process that will rumble on for years. The deficiencies in our planning system put us at a competitive disadvantage that we can ill afford. Local authorities will continue to wrestle with the pressures of growth and change as these twin challenges evolve over time. The UK needs to have a planning system with the technical features that can cope with these pressures efficiently. What local leaders also need is the attitude and the incentive structure to rise to the challenge.
A version of this article first appeared in Planning.
