Next Gen News

Local people are being given more control over how many homes are built in their area, but there are fears it could escalate the housing crisis. By Peter Hetherington

Housing targets have been removed at the national level. Planning strategies for determining the level of new homes should be in the eight regions, currently with an ax. Public funding of social and affordable housing remains strong. And this is only the beginning.

Housing experts, who believed that the influence of the Liberal Democratic Party in the coalition government will be the mood of the revolutionary enthusiasm of the last Conservative manifesto, are in shock, because they are responsible for key conference housing during the week.

Already these cutbacks are biting. The national affordable housing programme, and other ventures â€" a scheme to kickstart work on sites where building has stalled, and a market renewal drive to turn round older areas of terrace housing in the north and Midlands â€" have faced cuts of £230m since the coalition came to power.

Richard Capie, director of policy at the CIH, fears that another ?? 610 million allocated to the treasury HCA 'this year will disappear, which further undermines the agency' s program. And this is before the next triennial review of the costs starts to bite, the shelter is another blow.

More worrying for Capie and other professionals is the removal of house completion targets â€" a way of measuring progress since the early postwar years â€" under a new planning framework in which councils will have to decide the level of building in their areas. To be fair, the outgoing system â€" "Stalinist", according to Shapps â€" was cumbersome and increasingly out of touch with reality. National targets fed down to regional targets, with little democratic accountability. The previous government wanted 2m homes by 2016, and 3m by 2020, but since the credit crunch three years ago building has fallen so far below these targets that the case for a reappraisal was strong.

Housing experts also have serious concerns that the new planning guidelines that replace those objectives and regional strategies, which already seems to be sending wrong signals to builders and developers, after the letter of advice from the local community and the Secretary of the Government, Eric Pickles - Shapps 'Boss - effectively give them the green light to put the housing plans.

In some growth areas, notably Oxfordshire, two district councils â€" Vale of White Horse and South Oxfordshire â€" are doing just that, to the alarm of private developers wanting to press ahead with new housing. According to the Home Builders Federation, Pickles's letter has created a dangerous vacuum with no clear strategy at a time when the country is facing an acute housing shortage. "The government says it is committed to building more homes, but without urgent guidance this aspiration will not be achieved," warns Stewart Baseley, the HBF's executive chairman.

A third district in Oxfordshire â€" Cherwell â€" is keen to hang on to a proposed new "eco-town" earmarked by the last government, although some in the coalition seem keen to scrap the proposal along with other eco-town developments.

In areas facing new growth pressures, progressive Tory authorities â€" such as Oxfordshire county council â€" see the Cherwell eco-town as preferable to piecemeal housing expansion because development will be concentrated in a planned community. Keith Mitchell, the council leader, has written to Shapps pleading for the Cherwell eco-town to go ahead. Like othes senior Tories in local government, Mitchell welcomes the principal of the planning reforms in which councils will be given the power to determine housing levels. But, along with builders and developers, he is concerned by the speed of their introduction â€" with no transition period.

Bob Neill, planning minister, is adamant that urgent reform is needed because, he insists, regional targets failed to deliver sufficient housing. At a conference this month, organised by the Town and Country Planning Association (TCPA), he told delegates: "It may be controversial, but there is a clear mandate for the coalition to remove the regional planning apparatus, and that will happen. Swift steps will be made to remove targets and take the necessary legislative steps to dismantle those arrangements."

Yet in London, blessed with its mayor and his strategic authority, the picture will be very different. While regional planning and housing strategies will be scrapped in the rest of England, the capital will keep its London plan, housing targets and all. Ironically, the pragmatic Tory administration in the capital is living proof that, contrary to the assertions of ministers, targets do work; this plan has already delivered over half the mayor's target of 50,000 affordable homes by 2012, 60% of them in the social rented category.

"Ministers have made clear they will treat London differently," says one insider close to negotiations with the government. Agreement has been reached to transfer the HCA's functions in the capital, with a current annual budget of around £1.1bn, to the mayor. In turn, Boris Johnson will devolve housing powers to 32 boroughs under a "delegated delivery" programme. It should all be wrapped up before the summer recess.

Elsewhere, however, little, if any, spending in this area is ringfenced.

Yet at the same time, Neill said the coalition was committed to bringing forward new incentives to encourage "responsible and sustainable development". These include the government matching council tax receipts on new developments for six years by creating a special "matching fund" by top-slicing the revenue support grant to local authorities.

"We will match pound for pound the extra money councils get on council tax for six years," said Neill. "Localism is at the heart of our approach to planning because we genuinely believe it is important to give local people control over the shape and the future of their communities. We are determined not to go back to a situation where central government controls the content of local plans."

A year ago, it all seemed so different. The previous government â€" acting irresponsibly, according to the new regime, with little or no "real" money on tap â€" made a housing pledge of an extra £1.5bn to deliver 20,000 new homes over four years, with much of the cash coming from other departments and "underspends" elsewhere. This funding is no longer seen as secure, and the pledge has been dropped.

Up to now, the fragile housing market in England has been propped up by state intervention, in the form of the HCA which has, effectively, rescued much of the housebuilding industry by funding it to build affordable social housing for housing associations. Last year, for instance, almost three-quarters of housing starts â€" 64,811 â€" were partly funded by the agency. It has become a key player in the market.

The National Housing Federation, which represents not-for-profit housing associations, partly funded by government, has already written to Shapps warning that the number of affordable homes in England this year could slump by as much as 65% â€" the lowest since 1990. And this week it further underlined the looming housing crisis in a statement warning that the government's housing budget could be cut by a third over four years, with the loss of 200,000 further construction jobs.

With the government placing all its faith in councils to deliver the level of housing needed â€" and some small authorities have precious little planning capacity and expertise to meet this challenge â€" Capie argues that a commitment to devolve more powers to town halls, and communities, could still work well, given time. But why such a rush? "Local planning has the potential to be good, but managing the transition is not being done brilliantly," he warns. "Central government cannot abdicate its responsibility, and house-builders are very concerned about the [emerging] planning framework. Housing was in crisis before the election, and that crisis looks like it is going to escalate."

Emma Cariaga, head of strategic projects for Land Securities, one of the biggest developers, voices the concern of many private developers. "The view from the private sector is not about change itself," she insists. "But my question is one of time and whether the scale of change is what we need right now." Far better, she thinks, to test the new planning regime in several areas before rolling it out nationally.

In short, the government is embarking on a high-risk strategy at a time when house-building is emerging from one of the deepest crises many in the industry can remember. But Neill insists change is long overdue. "The reason we embarked on [this] is not because we are anti-planning or anti-growth; on the contrary, it's precisely because we recognise the role a good planning system can play in delivering the economic growth the country needs that we are moving swiftly."