1 February 2018
The Draft New London Plan is a sizeable document aiming to revolutionise the capital and deliver for its stakeholders. With a strong emphasis on placing culture at the heart of its success, the mayor wants to protect the capital’s creative spirit.
The House Builders Association (HBA) salutes Khan’s efforts to stimulate appropriate growth. For example, we have long criticised the lack of family-sized homes delivered in the capital and the Plan seeks to address that by increasing the number of habitable rooms and space delivered through the planning process.
A policy tackling the failed delivery of family homes is long overdue, as planners have spent the previous two decades enabling development more suitable for investment or sharing. However, the mayor’s challenges are not simply about the types of homes, but who builds them and why.
In November 2014, a written ministerial statement recognised that SMEs – who typically build on small sites – operate differently from volume developers. The statement consequently exempted affordable homes on schemes with fewer than 10 units, or smaller than 1,000 sq. mt.
SMEs, our local employers and trainers, initially buoyed by the statement found themselves waiting for nationwide implementation because Reading and West Berkshire Council challenged it through a judicial review, which in 2015 they subsequently lost.
Since the judicial review, 27,700 more homes were built in 2016/17 than in 2015/16. In addition, since the ministerial statement, 80,740 more homes have been built every year with house builder output experiencing sustainable increases. These statistics show that increased planning certainty has stimulated industry growth and this is supported by trade federations such as the National Federation of Builders (NFB), who have seen an increase in confidence and membership.
Yet the new draft London plan is recommending the end of this capacity increasing policy and will place further constraints on SMEs and regional contractors who are integral to the construction industry and local economies.
SMEs train and retain two thirds of construction apprentices and prefer to train at higher NVQ levels. Due to operational differences, SME employees are more likely to establish careers in the industry, rather than “one off jobs” and are more likely to upskill. For every £1 invested with SMEs, 90p remains locally to grow regional economies. Therefore, it is no surprise that in London, where the construction skills crisis is most acute and volume development dominates though a more transient workforce, an estimated 60% of employees are from outside the UK.
The HBA is disappointed that, instead of supporting its locally training and employing SMEs, the mayor has chosen to encourage boroughs to “include policies requiring affordable housing from such sites of ten or fewer units in their Development Plans.” This recommendation will further stifle the recovery of London’s construction SMEs and regional contractors and not deliver sustainable opportunities for the capitals local employers.
More affordable homes are needed and we hope the mayor recognises that blanket statements do little to appreciate the delivery differences between Westminster and for example, Bromley.
The mayor has previously called construction a lower-skilled sector, so perhaps he does not feel that it delivers worthwhile careers. Yet with house building output increasing, industry wages being above the national average and a fifth of SMEs operating in construction, we hope the Mayor is able to rethink his position and more fittingly support those stifled London businesses that embody London’s creative spirit that the Draft London Plan hopes to unleash.