Labour should adopt a twin-track strategy for planning reform: quick wins inside the existing system, to buy time for the big planning reforms that the British economy and housing crisis require.
The recent Labour reshuffle has seen Angela Rayner, the Deputy Leader of the Labour Party, appointed to Shadow Secretary for Levelling Up. Rayner’s new role includes one of the most important challenges in English domestic policy – housing.
The appointment of Rayner follows Labour’s embrace of planning reform for a programme for housebuilding, economic growth, and jobs, with Sir Keir Starmer announcing that Labour supports “the builders, not the blockers”.
The background is that the UK has a backlog of 4.3 million missing homes compared to our European peers, because the planning system is a bottleneck on new private and new social homes. Making the planning system less discretionary and risky and more certain and rules-based, as Jacinda Ardern has done in New Zealand, is the key to increasing supply and ending the shortage of homes.
However, recent reports from The Times suggest that while Labour currently has some good ideas that would improve the system, a lot of the more detailed thinking repeats previous initiatives that did not work. Rayner should instead take a twin-track approach on planning reform – aim for the easy and little wins that can be delivered quickly in the current planning system, and use them to buy time for the big, deep changes to planning needed to both solve the housing crisis and drive economic growth.
The Times suggests there are several planks to Labour’s current thinking on planning reform for housebuilding, alongside reforms to the planning process for national infrastructure such as wind farms. These include:
At the core of Labour’s ideas is a recognition that the current planning system is causing England’s housing shortage. It’s a bottleneck on new private and new social homes, and it needs to be reformed for the economy to experience the economic benefits of a large increase in housebuilding. The planning system also needs to provide all the local infrastructure new homes need in the places where they are built.
Building in the most expensive places, like Cambridge, is key for both improving local housing affordability and national economic growth. Allowing more people to live in the places that have the most jobs and the highest wages is good for the entire country.
Releasing parts of the green belt that are suitable for development – brownfield sites, areas in walking distance around railway stations, areas on the fringes of the big cities – is essential if the benefits of new housebuilding are to be felt. Centre for Cities has with the LSE previously shown that roughly 1.7 million to 2 million suburban homes can be built at walking distances around railway stations 45 mins from the centres of the 5 biggest cities in England, on less than 2 per cent of the green belt.
However, Labour’s other proposals are more likely to get stuck.
If the proposed New Towns are to be commuter towns for existing urban economies, then they could complement the drive to build near high-demand cities. But the classical concept of the New Town, a self-contained settlement with little or no out-commuting as an alternative to the growth of the big cities, did not work work well. The Brown Government tried the same idea with a proposal for 10 new ‘eco-towns’, but these never got off the ground.
Likewise, Labour is correct to identify that lining up new local infrastructure is crucial for success in planning and popular acceptance, and to spot that district councils are currently too small to deliver it at scale.
But a push for strategic planning doesn’t solve this. Councils cannot be forced to work together. The failure of the soon-to-be abolished ‘duty to co-operate’, and the abolished Regional Spatial Strategies in the last Labour Government both show that. Even if there was a push for co-operation, the underlying issue with infrastructure – that local plans and local transport plans are different documents drawn up by different levels of local government – would remain unsolved.
Similarly, Governments have been trying to squeeze ‘hope value’ out of development land ever since the discretionary planning system was established in 1947. It has always struggled to do so, as the unpredictable nature of our planning process snarls up land valuations in the courts or arguments over ’viability’. Other countries that use hope value to finance infrastructure for development, such as Germany or the Netherlands, use a zoning system to make the valuation process quick, clear, and fair.
And given how restrictive England’s planning system is, we need a national target to push through its bottlenecks. A planning system which was much more flexible could perhaps dispense with any need for targets, but in order to close the backlog of 4.3 million missing houses, over the next 25 years, England needs at least 442,000 homes per year, or to close it in a decade, 654,000 per year.
Altogether, this indicates that Labour’s current approach to planning reform may slightly improve the performance of the system, but it is unlikely to deliver an end to the housing shortage. Green belt release, streamlining national infrastructure, and a focus on expensive places are real positives, but the other ideas mostly repeat failed experiments, instead of removing the unpredictable, case-by-case processes at the heart of the problem.
A stronger approach would be to think about planning reform on two different tracks – the easy wins inside the current planning system that would deliver a quick increase to housebuilding and buy time for the more complex but deeper planning reforms that are necessary for the permanent and much larger increase to housebuilding the country needs.
On the first track, release of small parts of the green belt, and greater use of Local Development Orders and Development Corporations for urban extensions and regeneration are the obvious tools Government already has at hand.
The Levelling Up and Regeneration Bill currently going through Parliament contains important reforms too. The ‘nutrient neutrality’ amendment, that Labour has already shown quiet support for, is critical here to get dozens of local plans across England back into working order. The new National Development Management Policies are crucial for any Government seeking to make the planning system more rules-based and less of a bottleneck.
On the second track, the aim should be for England to be building much more than 300,000 houses a year by the end of the next Parliament. The key here is replacing our dysfunctional, discretionary town planning system with a new ‘flexible zoning’ system.
Flexible zoning would merge local plans and local transport plans together, making it easier to deliver infrastructure. Planning permission would be guaranteed to applications that follow the rules set out in each zone, which are applied across urban areas and into new urban extensions.
New Zealand has already shown the benefits of flexible zoning and how to get it done. Planning reforms rolled out in Auckland in 2016 led to an immediate boost to housebuilding and started pushing rents down, especially for those on low incomes, before being rolled out nationally.
More housebuilding is crucial for affordability, for disposable incomes, for social housing, for climate action, for public services, for the economy and growth, and for jobs. Planning reform is the only way to deliver it at a national scale. A twin-track strategy for Labour would balance the need to get results as soon as possible with the fact that England’s planning system needs big, structural changes to fix a problem as big as the national housing crisis.
Planning reforms under Jacinda Ardern have boosted housebuilding and affordability in New Zealand, with big lessons for British housing policy.
Compared to other European countries, Britain has a backlog of millions of homes that are missing from the housing market. Building these homes is key to solving the nation's housing crisis.
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