Failure to relax planning rules risks a boom and bust to come

Nimby mentality means the planning system won’t be able to cope when the economy picks up

Column LAST UPDATED AT 09:43 ON Thu 29 Mar 2012

YOU CAN always tell when a politician has lost a big fight, he goes to ground. So it was with the planning minister, Greg Clark, on Tuesday. Clark is not normally a man to duck an argument, but after announcing the final and heavily watered-down version of his much heralded National Planning Policy Framework to the Commons, he sensibly decided that discretion was the better part of valour.

While the NPPF’s opponents, led by the National Trust, gleefully crowded the airwaves, its supporters could only watch in glum silence as their hopes for any meaningful relaxation of Britain’s restrictive planning system melted away.

These battles, though, are never quite as they appear. Clark’s boss, the Communities Secretary Eric Pickles, was never a great fan of planning reform, and at Westminster he is widely credited with seeing it off. He is also reckoned to have done well against George Osborne, who trumpeted the NPPF as one of the keys to growth.

For the increasingly embattled Chancellor, the emasculation of planning reform is another embarrassment he could do without. Yet the NPPF was never going to be all that it was cracked up to be. Even its supporters privately conceded that the controversial first draft, released last summer, was far too gung-ho in the emphasis it placed on development, and the way it played down environmental concerns.

What was much less widely appreciated was that the Framework was not designed to be a law or even a set of rules, but merely guidance to local authorities on how they should draw up plans for their areas. It is these plans, far more than anything the government says, that really count when it comes to deciding whether or not development goes ahead.  

But councils can choose to disregard guidance they don’t like, and ministers do not have many options for over-riding them. If the government really wants to get councils’ attention on planning it has to bite the bullet and change the law, and even this can have unintended consequences.

The current Government discovered as much when, within weeks of coming to power, it scrapped Labour’s housing targets. These mandated minimum building figures for each region of the country, and were wildly unpopular with local authorities of all political colours. The coalition’s hope was that, if the targets went, local planners would willingly grant more planning permissions when and where they were needed – and without the need for prompting from Whitehall.

To seasoned observers that always seemed optimistic, and so it has proved. Instead of boosting their housing allocations, many councils started quietly reducing them the moment they were allowed to.  Across southern England, where the pressure on housing is most intense, well over 200,000 planned new homes, due to be delivered over the next 15 years, have been quietly shelved since the law was changed in summer 2010.

As the main point of planning reform was supposed to be to boost future house building, the contrast with what has actually been happening on the ground is ironic, to say the least of it. Even more ironic is that most of the councils doing the cutting have been Tory.

It is, though, hardly surprising. Anybody who knows the modern Conservative party understands that nimby-ism (not in my backyard) is an integral part of its DNA. The real surprise is not that the NPPF has been emasculated, but that Greg Clark and George Osborne ever thought they would be able to push it through in anything like its original, over-confident form.

In the short term, with so little money available for development, what has happened probably will not make much practical difference. But in the longer term the worry has to be that the failure to reform the planning system now means that it will not be able to cope when the economy does eventually pick up.

For housing, this could be especially toxic. Allowing councils to lock in low levels of home building for the next 15 years, which is what the Government is effectively doing, almost guarantees that when growth and credit do return there will be another damaging house price boom - followed in all probability by an even more destabilising bust.

The coalition misjudged the reaction to the NPPF and Conservative MPs, in particular, will be relieved that planning reform has had to be watered down yet again. But their successors in a decade’s time may regret that the issue has been shelved, not solved. ·