10 July 2024

Britain is paying for decades of poor planning policy


The new Chancellor’s commitment to building more homes we need is obviously to be welcomed. However, we must hope that she has learnt the lessons from our history of failed attempts at planning reform before she finds herself in a quagmire.

It goes without saying that Britain faces one of the worst and longest-running housing shortages in the developed world, with a backlog of at least 4.3 million unbuilt homes. As a result, across England, the average house costs more than ten times the average salary and vacancy rates are below 1%. It is bitterly ironic that this housing shortage is entirely self-imposed.

Since the Second World War, the British government has enacted increasingly stringent planning legislation that empowers the blockers of nearly all construction, with little incentive to permit it. As a result, even at their peak, post-war building rates never reached pre-1945 levels and have been in steep decline since the end of the 1960s, despite skyrocketing house prices.

Why was legislation restricting housebuilding introduced and why have successive governments maintained it despite the economic and social costs? New research by the Adam Smith Institute has shed light on this process, in a handy guide on the evolution of the modern planning system from its inception in 1947 to the present day.

Our current malaise began with the 1947 Town and Country Planning Act. This was instigated due to the political demands to curtail the unpopular suburban expansion of the interwar years. The designers of this system envisaged a delicate balance in which further urban growth would be prohibited by sprawling greenbelts and would be accommodated instead by new towns. However, despite initial success, the New Towns programme became too unpopular for the state to implement at a sufficient scale after 1950, while the greenbelts remained and expanded further.

The Wilson administration attempted to bring land forward for development by setting up the Land Commission and reforming local government boundaries. The Thatcher government gave greater scope for developers to overturn rejected planning applications by appealing to the central government. The Blair government set up regional spatial strategies to impose greater housing targets on local authorities. Recent conservative administrations have also attempted to impose housing targets and streamline the planning process. However all these attempted reforms have been reversed due to sustained opposition.

Planning reform is essential to Britain’s future. So, it is imperative that the incoming government must remember the bitter experiences of the past, and learn the lessons from these attempts in order to avoid repeating such mistakes. It is therefore essential to understand why earlier attempts at planning reform failed.

I suggest that there were two major problems with the design of these earlier reform attempts. Firstly, governments have attempted to impose planning reform by setting up third party planning organisations such as the land commission or regional spatial strategies. These bodies take too long to set up and their action is hampered by large-scale opposition meaning that they achieve little before they are scrapped, usually after a change of government. Any planning reform that has a chance of real material impact must be implemented directly and immediately by the central government.

Secondly, any general reform of the planning system cannot succeed unless it provides some benefit for local authorities, and the local voters that elect them. Targeted planning liberalisation using development corporations is possible and desirable in or very near high-wage urban areas.

Reform to the planning system on a national scale must solve the underlying political calculations that lead to tight planning restrictions in the first place. When local communities obtain no direct benefit from new housing, but bear all the costs, local residents and their elected representatives have every incentive to restrict new housing.

Therefore, the best avenues for widespread potential planning reform are those which allow communities to benefit from new development. In particular the policies of estate renewal, Community Land Auctions and a Homes for All scheme, under which local residents are given shares in local developments, should be immediately implemented by any incoming government.

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Samuel Watling is the author of 'Learning Lessons: A History of Bad Planning Policy' and a researcher and staff writer at Works in Progress.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.