Post-election debate report part two

Image: Curzon Street Station, Birmingham - courtesy of Grimshaw

In the second part of our post election debate we invited Federated Hermes / MEPC Development Director, Rob Groves, Marie-Claude Hemming, Head of Operations at the Civil Engineering Contractors Association (CECA), and James Stevens, Head of Cities at the Home Builders Federation (HBF) to talk about the promises on house building by the new UK government, the difficulties that need addressing in the planning system and whether the key to a world-class economy is investment in world-class infrastructure.

Rob Groves began by saying that the UK is now at the point of needing new rail infrastructure:

'Our rail infrastructure is over 100 years old and it is tired out. I am not a great believer in the plans that wanted HS2 going North, it think that was a wrong decision. We do not need speed but we do need more rail across the UK. HS2 not being delivered further than Birmingham is not a problem for the city, but we need to keep up the perception that development is happening. When Grand Central was created over Birmingham New Street station, it didn't provide more capacity but the quality of the design and build changed the perception of the place and that attracted further investment.

'I come from the South East originally and when we think about these 1.5 million homes that the new government wants, we cannot sustain that type of development in one region. We need it across all regions. The problem is that there has been no investment in rail infrastructure in the past years. As a developer we are getting into more and more residential development in the centre of cities. You need investment all around the outside of these homes and offices to make the developments work. By that I mean what happens on the ground floor of buildings but also on a larger scale investment in schools etc. It's expensive and cities cannot afford it. You need much more investment from the public sector, but developments have been compromised by the lack of that and many projects have been too inward-looking. We need to work at a collaborative planning system with the private sector helping on investment as well. As developers we are very successful in workplace development creating an interesting experience within the floorplate, what is on the ground floor and what can be offered to the public. But it is when people step outside that it is important too. How will you look after high-quality public realm? The public sector is very challenged here. You need the right long-term partners. Too many times I have seen investment in public realm, only to see five years later, it is a mess.'

Birmingham's Grand Central with one of the entrances to New Street Station (Photo by Brian Lewicki)

One of the major problems for the UK is that many infrastructure projects have been paused commented Marie-Claude:

'The new government needs to get things going. A lot of the manifesto from Labour was very positive as it was with the other parties, but we now need a clarity of direction in the first 100 days of the new government. There needs to be a clear statement of intent on where to go in the infrastructure sector, giving confidence to the market to deliver. We need to know when the next financial events will be - which probably won't be for another three months. Of course we are living through reduced money in these times, but a lot of work can be delivered if the government commits to best practice. We have the Procurement Act and other tools available which perhaps are not being used as deeply as possible. We need clear procurement practices and these tools don't require additional money. Yes, some of them are new but they need to be used better. The creation of NISTA, combining the NIC and IPA might be a good thing if it drives improvement and streamlining, but any new organisation will need time to train up staff.'

James Stevens of the HBF, who has worked on local plans all over the country, said that there are key problems in the planning industry that need to be worked on if the required 1.5 million homes that the new government suggests it wants, can be delivered:

'The big problem is with resources in local authorities. We just do not have enough planners on the ground in planning departments to deal with processing housing developments. Decisions on planning are supposed to take 13 weeks, but currently are taking two years. The three hundred planners that the new government has promised works out at less than one for each local authority. We need another solution. Perhaps to let fewer schemes go through planning committees? But that is a political battle. Zoning? Perhaps deemed consent for applications for certain types but this is difficult. Poor local plan coverage is another issue but that will need five years to solve. There is also an inability for registered providers to contract for Section 106 Affordable Housing because of financial pressures - they cannot get them approved - and we need some kind of cascade mechanism.

'On cross boundary planning, the metro mayoral system is underpowered, except in London. There is the potential for the government to publish a spatial strategy, indicating where the housing needs are, and provide that leadership. Outside London, you need full unanimity of all local authorities in a metro mayoral area to get agreements through. That's difficult. We need legislative change to alter that and it might be better through policy change instead.

Oxfordshire like other counties has looked at cross-boundary planning. Above image: ARC Oxford Business Park and housing at Cowley on the outskirts of the city by the BMW Mini plant, courtesy of ARC Group

Associate Professor Alan Mace from the London School of Economics, who contributed to the first part of the discussion, added that capturing land value was really key to getting the quality of development needed. But he explained that this takes time:

'Making changes to the existing planning system generates further changes and causes delay while departments are up-skilled. We have a once in a generation opportunity to take blocks of green belt to signify to developers that we are serious about housing and create a change in their psychology. If digital mapping is useful here, why not?'

Rob Groves responded:

'Across most of the country there is no value in the land and you don't want cheap developments. Long term planning is needed to bring poor areas up for development and that needs to happen fast. I am concerned about development on the green belt, because city centres get left out.'

Andrew Whalley, Chair of Grimshaw - who again contributed to the first part of our discussion - suggested that work needs to be done in rundown areas of cities that are blighted, where there are large parcels of land and with subsidy, create new residential. That, he said, would make a real difference.

While James Stevens questioned who should pay for infrastructure:

'There has been a tendency for the public sector to be forced to capture some land value but that is now at breaking point. We need longer term management of housing estates. We didn't have these problems in the 1960's and 70's, and it is a reflection of the decline in our British economy. We need to raise the general level of productivity and taxes. Water and power are the greatest problems for future housing development. Electrical capacity will need to improve greatly as we move towards net zero otherwise our housing developments will be on hold.'

Investors and developers still have an appetite for investment added Ciaran Gunne-Jones, Senior Director and Head of Economics at Lichfields who also contributed to the debate:

'But they call for more certainty. We are about to enter a new period of planning reform. Constant change in planning has been seen as a revolving door and acts as a barrier to patient capital and investment. We need clear reform for better long term planning and need to ask where the key sectors should be. There should be a framework for local authorities for funding long term settlements. Currently the funding is too short term. This hasn't helped competition between places. We do not want reform for reform's sake, we need a clearer direction of travel.'

Maire-Claude Hemming concluded:

'Currently there is a challenge of money, planning and delivery. The way we deliver projects is by consent and process so these are always substantial blockers. GDP has taken a tumble. There has been no commitment to long term infrastructure. Investors still want to come to London rather than other areas, because of the existing infrastructure which is still better than elsewhere. We need world-class infrastructure if we want a world-class economy.'

Future Cities Forum would like to thank all our contributors for their expertise and insight in this important discussion following the election of the new UK government.