9 May 2022

What SME builders want from Queen's Speech

Michael Gove, secretary of state for the Department for Levelling Up, Housing and Communities is rumoured to be rejigging the ‘Planning for the Future’ consultation and announcing a new direction of travel in the Queens Speech on 10 May 2022. Small and medium sized housebuilders have been very clear about what we want but as a final hurrah, we have some guidance.

Broadly, we want the ‘Planning for the Future’ consultation to be improved and substantive, not stripped back with the coherent solutions removed so it can be made politically saleable. Michael Gove’s job is to improve it through improved engagement, not take us back to ‘tweak town’ where adjustments to national planning policies make no difference in practice.

The Government must learn from its mistakes and remember that Local Planning Authorities (LPAs), or councils, are the arbiters of planning (plans, allocations and permissions), not the Government. Anything the Government does do has to be interpreted (or not) locally.

Michael Gove’s Queens Speech rumours which have appeared in The Telegraph and Times, suggest:

  • The design code remains, which is fantastic if it ensures planning application certainty but not if it leaves the window open for statutory consultee delays (eg-water companies) and council ‘Extension of Time’ request abuse.
  • That small builders will get a fast-track planning permission to avoid fees, which is welcomed but SMEs build up to fifty homes and there is no medium sized sites definition, so one is required.
  • A fast-track planning permission still does not solve the major issue of local plans focussing on the allocation of large sites and so leaving SMEs out
  • That councils will not be required to meet minimum housing targets, which would be a mistake as the most affordable areas build well above and the least build well below.
  • That ‘Building beautiful’ ensures local buy in, which for SMEs who have always done just that is a flawed perspective and this has even been proved on a large scale with ‘Poundbury for Kent’ vehemently opposed.
  • A focus on ‘gentle density’ which is welcomed but was tried historically with three and four story townhouses and ended up being dropped due to opposition and ignores the need for proper density in cities.
  • A single fixed levy rather than a negotiated agreement with viability assessment, which without proper reform of planning allocations harms SMEs and simply helps landowners and promoters.

Whatever is announced, if it does not focus on ensuring that the current site allocation process is more flexible and focuses on deliverable sites, it will continue the dominance of big builders, as councils will continue to allocate larger sites outside of communities.

It can do this in the following ways –

  • Medium sized site definitions in planning terms, so we have ‘Minor’ (fewer than 10), ‘Medium’ (10 to 50 homes) and ‘Major’ (more than 50 homes) site sizes.
  • Continually updateable smaller sized site register which incorporates sites of up to 50 homes.
  • National Planning Policy Framework (NPPF) reforms which increase the percentage of smaller sites councils must deliver (currently 10%) and ties them to achieving that.
  • Greater planning powers for HomesEngland to operate in areas failing to meet minimum housing demand
  • Retention of the Housing Delivery Test approach, which exists to ensure councils allocate deliverable sites in their five year land supplies, not those without planning, without a hope of full planning, or which will take a decade to deliver.

The Government must also recognise that behind all of this is planning politics and this will not be solved with more elected Mayors and therefore an individual, or group, who can be held accountable (blamed for ‘overdevelopment’, or for people harmed by the housing crisis, ‘delivering a place to for them to live’), is required. This is what happens in every nation where housing supply meets demand.

Planning reform was never going to be easy but unfortunately, another year has been wasted by not bringing forward coherent planning reforms. The damage to SMEs has already been done by planning and regulatory changes in several areas, alongside new taxes will see more builders go to the wall in the coming year as building just isn’t viable.

If the Government has any hope of fewer SMEs and encouraging new entrants, it must heed the previous decade of debate and recommendations made in this piece and elsewhere. Otherwise, the Conservatives fifteen years (at least) in office will be mired by putting big business before British SMEs and an inescapable part of its evidenced legacy.