Will Labour's New Towns be the answer to the housing crisis?
Angela Rayner this week announced at UKREiiF that if elected Labour would:
Labour pledged last year to deliver 1.5m homes within its first 5 years, most likely as an increasing target over that period rather than a flat rate 300,000 homes/annum. For context, this target has not been met in the last 50 years, so should be treated with extreme caution. The ONS states that between 2014 – 2023, the annual average for housing completions in Great Britain was 180,000.
Invoking the spirit of post-war housebuilding refers to the Attlee government that built over 1.2 million homes between 1945 and 1951, of which 80% were local authority houses and flats. This was formed within the New Towns Act 1946, quickly followed by the Town and Country Planning Act 1947. The former enabled the model for building public sector housing for rent, reflecting Labour’s societal ideologies. This housing programme alleviated chronic overcrowding in cities but resulted in shortfalls in the supply of homes for sale.
Her reference to a strategic approach could mean different things:
Strategic = Regional Planning?
It could be the reintroduction of regional planning, as advocated by ‘The Commission on the UK’s Future’, established by Sir Kier Starmer and chaired by Gordon Brown. Two decades ago, ‘Regional Spatial Strategies’ were introduced under Labour, replacing Structure Plans (County-led) and Regional Planning, only to then be revoked by the Conservative/Liberal Democrat coalition in 2010 as part of the Localism agenda. RSS’s provided a regionally specific vision and strategy for a 20-year period, including directing housing and employment targets for their districts, boroughs and unitary authorities. RSS’s considered environmental, transport, waste and investment priorities, and negotiated cross-boundary considerations.
Labour seems clear in its approach on decentralising and devolving power, in that to enhance democracy and improve the economy of towns, cities and regions, empowerment will need to be offered to make decisions not just about social priorities but about economic renewal in the local area. It has vowed to introduce a new ‘Take Back Control Act in the first Parliament. Labour has indicated support for the collaboration with globally recognised leaders in the field, to show a clear direction of travel for further work by locally representative ‘Growth Boards’ made up of existing Local Enterprise Partnerships, Mayors, Local Authorities, development corporations and other interested parties. Labour proposes to ‘turbocharge’ mayors with access to new powers over transport, skills, housing, planning, employment support and energy, supported by long-term integrated funding settlements. There are currently 11 Mayoral Combined Authorities and the Greater London Authority across England – all bar one is in Labour control.
Strategic = Large Scale Development?
New Towns are an obvious headline-grabber for an incoming government, as they offer large numbers when set against a housing requirement. However, their planning and completion rate will only favour a very long-term national approach to housing supply.
The 32 New Towns delivered under the New Towns Act 1946 are home to around 2.8m people. This would suggest an average size of 35,000 homes per New Town. Each New Town had a designated Development Corporation to tackle land assembly, delivery and long-term stewardship.
The Town and Country Planning Association, through its review of the New Towns programme and lessons learned for future New Towns, notes that ‘modernised Development Corporations are the most effective way to deliver large-scale new communities. History has shown that the private sector alone cannot deliver at scale. For larger new settlements, Development Corporations provide the right combination of powers, speed and commitment to quality. The relevant legislation is still on the statute books but requires modernisation in terms of participation, climate resilience, and a commitment to the Garden City principles’.
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Government could lay important foundations in pursuing a new wave of New Towns, but these are unlikely to make much of an inroad on the 1.5m new homes needed over the next 5 years. These are projects over decades rather than Parliamentary periods.
In terms of potential locations for New Towns, The Guardian has reported that areas around Nottingham, Stafford and Northampton are under consideration, due to Labour-controlled constituencies. Consideration might also be given to the Wolfson Economics Prize 2014, which asked ‘How would you deliver a new Garden City which is visionary, economically viable, and popular?’ The winning entry from URBED, argued for the near-doubling of existing large towns in line with garden city principles, to provide 86,000 new homes for 150,000 people built over 30-35 years. The entry imagined a fictional town called Uxcester to develop the concept and applies that concept to Oxford (2011 population: 150,000) as a case study, showing how Oxford could rival the strategy adopted by Cambridge for growth and expansion. It was argued that there may be as many as 40 cities in England that could be doubled in size in this way, such as York, Norwich, Stafford and Cheltenham. 20% of new homes would be affordable housing. This would still be radically different to the ‘gold standard’ 40% approach suggested by Labour, that would seemingly require public investment to achieve. ?
To supplement a New Town approach, Labour may also be thinking about a flurry of other smaller-in-scale ‘Garden Villages’ in its reference to ‘beautiful garden settlements’. A number of our local (Cambridgeshire/Suffolk) new settlements, of varying scales, include Kennett (500 home ‘Garden Village’), Cambourne (6,600 homes), Northstowe (10,000 homes) and Waterbeach (although both are described as ‘New Towns’), with others planned. The Kennett example was proposed in 2018 on the back of a draft allocation and is now under construction. All others have been brought through the local planning process (i.e. local plan allocation, planning application dealt with by the LPA), and many of the homes delivered through the private sector, rather than needing a Development Corporation role. However, like New Towns, planning and delivery (unless already currently advanced in policy) will mean limited contribution to housing numbers until at least a second Parliamentary term.
New Towns and Garden Villages should be an important component of a long-term national housing strategy. But to achieve a 5-year target of 1.5m homes, the priorities are more likely to be on already-advanced Garden Villages, large-scale urban regeneration, expansion of towns and large villages, and greater funding for public sector housebuilding. ?
How realistic is this housing target in the current system?
The Competition and Markets Authority ‘Housebuilding Market Study’, February 2024, identifies the well-known (and significant) obstacles (the planning system, land market, land banks, build-out rates/prices, drivers for quality and innovation, access for SMEs) constraining the market.
In terms of the planning system there are huge challenges affecting the speed of decision-making of planning applications, including local authority resourcing, out-of-date Local Plans, nutrient neutrality and water supply considerations. ?
Local Government Chronicle research in 2023 found that only 1 in 10 local authorities were fully staffed. According to the RTPI, despite income from planning services increasing over last years, direct public investment in planning has been decreasing, resulting in a fall in real net current expenditure. The recent rise in Planning fees is expected to slow the decline in LPA resourcing, and the Planning Skills Delivery Fund will help to a limited degree, however these will not be sufficient to reverse the overall decline. The speed of decision-making for Majors within statutory timescales dropped from 85% in 2009 to 49% in 2021 and is now considered to be closer to 20%.
Underfunding of planning services makes it impossible for local authorities to pay a fair market rate for the professional expertise of planners. The inability of councils to compete on salary is underlined by the results of an RTPI survey in 2023, where 82% of respondents working for local authorities said their employer had had difficulties hiring planners in the previous 12 months. Approximately 50% of planners now work in the private sector, especially in consultancies. Public sector employment has declined.
Labour has said it will strengthen requirements to approve new homes in areas that do not have an up-to-date plan and will intervene to approve new homes in poorly performing areas, including using call-in powers in the most extreme cases. It is understood that approximately 2/3rds of local authorities don’t have an up-to-date Plan at the moment.
Given the resourcing challenges currently being faced by local authorities, both in its plan-making and development management functions, it seems implausible that housing targets will be met unless there is a significant step-change in funding made available to local authority planning departments.