21 June 2022

SMEs despondent after Queens Speech

The Queens Speech felt like a tipping point for SME housebuilders, who were keeping their fingers crossed that Robert Jenrick’s ‘Planning for the Future (PftF)’ would not be stripped of its vital, commercial, and regulatory beneficial changes. Sadly, they were left disappointed.

Accepting that development was a key component of solving the housing supply crisis, PftF offered a more competitive environment to bring land forward, build homes where they were needed, have development and design locally led and ensure land values complemented the financing of much needed infrastructure. Instead, the Queens Speech routed us back in the tinkering era, which has been sustaining and worsening the housing crisis for thirty years.

Although the well-liked Design Codes remain, and infrastructure first has been championed, land allocations will remain limited and uncompetitive, ambitious building targets will be scrapped, regional planning strategies disregarded, landscapes proposed as being protected and planning contribution reform will continue to favour landowners, not land developers.

In terms of planning for Britain’s future, the easy to champion ’Levelling Up’ agenda has veered dangerously into a policy to win votes, not secure a better future for regional Britain.

The watering down of planning reform examples this perfectly because while small business are set to lose out to outcome controlling localism and planning politics, the Government has recognised that on capital projects such as high-speed rail, the issues SME builders have suffered for two decades must not get in the Governments way and so have proposed greater powers to bring land and works forward.

Watering down of planning reform is certainly painful for SMEs but when placed alongside 12 new taxes and regulatory changes, it doesn’t bode well for the sector. Concerned at the extra taxes and costs, some have already signified an end to the housebuilding arms of their businesses.

This is particularly true when analysing the Government's renewable energy strategy, which shirks planning reforms for onshore wind turbines and greater grid connectivity, to place a greater emphasis on offshore and on-building strategies, which is predicted to end up another builder cost via solar panels and battery storage.

The lack of cohesive thinking extended to the environment too, as the ambition to do more for the environment is welcomed, but the proposals by SME builders to ensure biodiversity gain was aligned with site design and building fabric was ignored. This has seen the Government continue to persevere down net gained habitats (not biodiversity), which will make many small sites unviable for onsite solutions, and so go through the costly, potentially delay ridden offsite payment process.

On the positive side, educational reforms toward trades and a grater emphasis on water companies solving pollution issue they caused but SME builders are blamed for, has gone down well. However, this Queens Speech has done little to convince SME house builders that they really are on the agenda and instead, has further cemented the concerns that for many, this Government views Levelling Up as headline grabbing policies, not one which understands levelling up in practice or the barriers to doing so.