A paper by NNGO – Need Not Greed Oxon (#1)
Planning: the failure of government
Towards a Narrative for The Next Phase (1941)(#2)
“ No manifesto at recent elections promised to hand over local and democratic control of development to private and commercial interests. But that is what is happening – behind a fog of evasion and misinformation. ”
“ … a new-fangled cartel, an almost Orwellian monster, of private interests … ”
September 2017 (#3)
The root of the problem is not just the greed of developers here and there, but the general breakdown of the traditional local democratic control of town and country development. The development free-for-all which now threatens to destroy our communities and environments comes not from random opportunism in this, that or the other Oxfordshire village, but comes from Whitehall.
This is not a party political matter. No manifesto at recent elections promised to hand over local and democratic control of development to private and commercial interests. But that is what is happening – behind a fog of evasion and misinformation.
In Oxfordshire, as in other counties, a new-fangled cartel, an almost Orwellian monster, of private interests mis-called a Local Enterprise Partnership has been appointed by Whitehall to drive through a so-called ‘strategic economic plan’ over the heads, behind the backs and against the wishes of local people and their elected representatives. To be sure it boasts an arm called a Growth Board, on which the leaders of elected local councils sit.
But they have no power to overrule the economic plan, which is written by private consultants, many of whose day jobs consist of richly funded contracts from developers and landowners. The only job of the local council leaders in this scheme of things is to see that the growth plans are implemented; and the growth plans are written to justify the wildest ambitions of the consultants’ real pay-masters for the largest possible number of developments, whether in the Green Belt, in areas of Outstanding Natural Beauty, in green fields or to fill up the open areas that mark the distinctive character and personality of separate towns and villages in Oxfordshire.
The councils which these leaders represent have no say at all in these strategic economic plans. In short the LEPs and their ‘Growth Boards’ are a front organisation for unbridled developers and development – private, undemocratic and unaccountable.
In West Oxfordshire a government inspector has been conducting a public examination into the Council’s Local Plan. The Local Plan is intended to promote “sustainable development that reflects the vision and aspirations of local communities” and balances social, economic and environmental considerations.
However, the large majority of participants in the examination were developers and house builders, represented by highly paid lawyers and consultants, who have no great interest in the future planning of the area. They simply want to ensure that their land will be allocated for development, thereby guaranteeing a handsome profit simply as a result of this allocation.
The people who are really concerned about the future of their area, local residents and indeed the local authority itself, are heavily out-numbered and certainly out-resourced by the development lobby. The most important and contentious matter to be decided is the number of homes that should be built over a twenty year period.
In the past this would have been determined by an impartial technical process involving co-ordination between local and regional authorities to ensure that local needs were consistent with national projections of household growth. Now, determining the housing requirement is almost invariably farmed out to consultants who look only at the area in question and in isolation from the rest of the country.
They are free to make a number of ‘adjustments’ to the household projections to determine what is called in official guidance “an objective assessment of need” (‘OAN’). However, in reality, this is likely to be far from objective. In the case of West Oxfordshire the consultant responsible for the housing requirement – GL Hearn – is, using the description on its website, “one of the UK’s leading property consultancies”. Much of its income is therefore derived from advising developers and house-builders on how best to secure planning permission for their developments.
It is clearly therefore in a consultant’s interest, when working for a local council, to recommend the highest possible housing requirement because this best serves the interests of its most profitable clients. This is a fundamental conflict of interest.
At West Oxfordshire’s public examination, GL Hearn, who had previously produced the local authority’s housing requirement, sat at the table representing Crest Homes, a major housebuilder, and promoting their sites for development.
At a previous stage of the examination the Government Inspector asked GL Hearn’s representative for advice about the “objectively assessed need”, even though the consultant was there to represent Crest. This amounts to being both judge and advocate for one side in a court case.
What hope do local people and the local authority have? This situation is being replicated across the country. GL Hearn has cornered the local authority market for “objectively assessed need”. One of its partners is the Cambridge based SQW consultancy. In neighbouring Cherwell’s public examination a director from SQW sat at the table representing a developer in the morning and moved effortlessly into the council’s seat in the afternoon to justify GL Hearn’s housing assessment.
The Government says it is putting planning back in the hands of local people. In reality it is putting planning firmly in the hands of the developers and their highly paid consultants. The wishes of local people are ignored. It seems to think that by doing this more houses, and especially more affordable houses, will be built. They will not.
The development industry will cherry-pick the most profitable sites, not usually the most suitable ones, and large areas of countryside will remain blighted by the threat of unsuitable and unnecessary development. The outrageous conflicts of interest that favour the developers must stop.
Instead we should have an impartial, co-ordinated and properly resourced planning system under which the housing numbers are generated transparently by public authority duly accountable to those who elect them.
Supporters of the Need Not Greed in Oxfordshire campaign attended not long ago so-called consultation by the Local Enterprise Partnership over what they choose to call a refreshment, i.e. yet further inflation, of their strategic economic plan. It was an insulting farce.
The groups were not allowed to choose their own chairmen and instead had pre-committed ‘trusties’ foisted upon them. We were laughed at for questioning the local and democratic legitimacy of the LEP itself; and our principled objections to its role and to its figuring were brushed aside in anodyne paraphrases which consistently missed the whole point of what we were saying.
You will have seen claims in the local press from time to time that this uncontrolled free-for-all for developers is justified by the national housing shortage and that anyone who opposes it is a selfish NIMBY denying to others the homes that they themselves enjoy. These are lies; and they come not from the mouths of the poor and the homeless, but from the confederates and PR hirelings of the developers and landowners, who expect to make gargantuan profits from ruining the homes and communities and environments of ordinary people all over Oxfordshire and beyond.
The houses these London-based property developers want to build will not provide a home for a single homeless or needy family in our county. According to the government’s own website a person in Oxfordshire on average earnings and with cash reserves sufficient to put up a 20 percent deposit could get a mortgage sufficient to afford a house priced at between £120,000 and £140,000 thousand pounds. Two such average earners in a partnership could possibly afford a house of up to £260,000
How many houses have been advertised in new developments in Oxfordshire at prices like that? Very few, if any. The justification for the free-for-all by reference to the ‘housing shortage’ is a lie. The developers are no more interested in helping the homeless than they are in any other charitable works.
They want profits. And they do not care how many of our homes, our communities and our environments they destroy in the process. Executive mansions and weekend hide-aways for City bankers and SPIVS with well-laundered fortunes, they are the true customers for this sort of development scramble.
Another version of this lie is that the free-for-all in development unconstrained by normal planning principles is justified by high land prices in places like Oxfordshire. But these prices are inflated by the developers themselves and by the racket known as the ‘viability’ test.
There is no lack of land, even in Britain. But developers acquire portfolios of developable land with planning permission from which they then eke out a constrained supply to the housing market at a rate which maintains artificial scarcity and so swells their profits on eventual sales.
More broadly, the supply of developable land has been constrained by the need for planning permission. It is the granting of that permission which generates the astronomic increases ion land value. This is an act of public authority and owes nothing to any effort or investment, let alone labour, by the land-owners.
The argument has long and rightly been made that this increase in value, created by public authority, should accrue to the public, whether through a land-value tax or by otherwise enabling public authority to acquire such land for development at prices which do not include the uplift in land value engendered by the grant of planning permission. There would then be no inflated land value element in the prices at which such housing could be sold – and therefore no circular ‘self-justification’ for a planning free-for-all because of high prices in places like Oxfordshire.
The developers have added another wheeze to the free-for-all racket by arguing that because land is so expensive they should be excused from their normal obligations to provide a proportion of affordable houses or to contribute to the costs of the infrastructure required to service the houses they are building. Because they know this they can and do, offer prices for land which already take into account the benefits they will enjoy as a result of applying this so-called ‘viability’ test.
So, they make the land unaffordable so that they can demand that planning authorities make it affordable by excusing them from normal developer obligations. Very neat !
- decent three bedroom houses in a development can, say, be built for £80-120,000.
- Land values without planning permission would add, say, £10,000, making 10% of a sale price of, say, £100,000.
- With planning permission these houses can be built and sold for £250,000.
- Net of the building cost of £90,000, the land element is now worth £140,000, a capital gain on £10,000 or fourteenfold. That’s leverage, man !
- So, the crafty developer offers the landowner (sometimes himself) , say, £70,000, intending to split the planning gain 50:50.
- The planning authority says that half the development should be ‘affordable’ thus sharing some of the gain with the ‘just about copings’.
- ‘Oh no’, says the developer. ‘Now that I have paid £70,000 per house for the land, my development will not be ‘viable’ if I have to offer ‘affordable’ houses’.
- and he gets economically illiterate lawyers to argue that circular logic to equally untaught courts.
- Often as not he wins the case; and the ‘affordable’ houses get dropped from the development.
- The knowledge that this is likely to happen drives the price which the developer offers the landowner; and
- Hey Presto ! a planning gain per unit of £130,000 per unit (or 1400%) is netted by the developer/landowner on a development which had just been held not to be ‘viable’ if any gain were diverted to ‘affordable’ houses !
- the inability of the system to see the obvious logical absurdity of this circular reasoning (known as ‘the La-La Loophole’) is a powerful contributor to the nation’s housing problems.
- The solution is simply not to allow developers to count whatever inflated price they have promised or paid into ‘viability’ calculations, which should instead be based on an independently calculated pre-development value.
What this free-for-all offers is the wrong houses in the wrong places for the wrong people at the wrong prices. What we need is the right houses in the right places for the right people at prices which those who need homes can afford.
What can we do about it? Are we as usual powerless and bound to lie down in front of this juggernaut as its tracks grind us into the mud?
We can demand what is sensible and in line with the simple principles of democracy and decency which have so long inspired this country.
We can – and we do – make a demand:
We demand that normal democratic and local control over development be restored, striking a proper balance between the genuine requirements for homes and places of work on the one hand and the principles of sound planning, infrastructure and environment on the other.
(1) NNGO = a spearhead group born in Oxfordshire in 2015 of (initially) 14 local environmental campaigns.
(2) Concept: Year 1941 = past the initial phases, but with main heavy fighting still to come on all three fronts and the prospects of victory doubtful.
(3) Peter Jay: Chair, Rural Oxfordshire Action Rally (ROAR); broadcaster, journalist, former UK ambassador to USA.