One of the main barriers holding back economic growth in Britain is the difficulty gaining planning consent – whether for a crucial piece of infrastructure, a retail centre or housing development. These hurdles fetter wealth creation and act as a major deterrent on employers seeking to recruit new staff. Employees find it difficult to find anywhere affordable to live in London, Cambridge or Oxford, where business is expanding. A median priced home in England is now seven times the median salary. In London the multiple is higher.
This stranglehold on new housing and commercial development dates back to the 1947 Town and Country Planning Act, which essentially nationalised planning approval and established a regime that ignored the economic signals that highlight an imbalance between demand and supply. As professor Paul Cheshire of the London School of Economics points out, “since the planning system...controls the supply of space for all use types, it effectively sets the price of space. But the impact planning has on the prices of housing, offices or shops is deemed ‘not material’ and explicitly excluded from the decisions process”.
Over the 60 years since planning was nationalised in Britain, the country has seen housing become increasingly unaffordable. The greenbelts established by post-war regulations have meanwhile obliged many to commute vast distances simply to get to work. All this commuting imposes considerable environmental damage. Most worryingly, the problem is escalating.
Nick Boles, the planning minister, is the first politician to tackle this impasse in living memory. But his efforts have been greeted by a chorus of criticism from the National Trust, and the Campaign to Protect Rural England. Championed by Sir Simon Jenkins, these critics erroneously accuse the coalition of wanting to build shopping malls and business parks across our green and pleasant land. Yet only one tenth of England is classified as urban – and one half of that comprises gardens. The accusation that Britain risks being built over is a woeful caricature: the problem is over-crowding and a lack of affordable places to live.
Our study advocates simplifying the planning system by merging current regulations into a new Consolidated Act, to address the unacceptable delays involved in winning many planning applications. Planning gains need to be priced and recognised by a planning system that takes into account the economic case for development.
Lessons can be learnt from the successful development of London’s Docklands, where planning rules were relaxed. Once a design framework has been agreed, development rights for new housing and commercial development should be auctioned.
The idea of building more Garden Cities has also attracted considerable interest. While the original Garden Towns, like Letchworth, imposed a straightjacket on development – “as in all utopias, the right to have plans of any significance belonged only to the planners in charge” noted the celebrated writer Jane Jacobs – the concept of new urban centres in under-used stretches of non- prime countryside has much to commend it. Milton Keynes’s success as the fastest growing city in Britain, demonstrated by its diversity of employment opportunities, fresh business startups, and leadership in the number of new patents approved, shows the way in which the UK can promote economic growth and prosperity.
But the involvement of the private sector is crucial. New towns were held back in the past by a focus on rental accommodation for former inner city slum dwellers. There was no place for a mix including owner-occupied houses. Employers left and new towns were transformed into modern slums.
Unschackled from restrictions, the private sector can lead the way in building commercial and residential space to meet demand. A relaxation in regulatory controls combined with competition between builders should also foster better design. People tend to buy or rent housing that is attractive to the eye. They don’t need planners to lay down aesthetic standards.
Keith Boyfield is a research fellow at the Centre for Policy Studies. His report Simplified Planning, co-authored with Inna Ali, is available at www.cps.org.uk