We can fix the planning system, but we must manage risk first

It will come as no surprise to those in the development industry that the Competition and Markets Authority (CMA) has identified the planning system as a root cause of the housing crisis.

According to the CMA: “the complex and unpredictable planning system is responsible for the persistent under delivery of new homes.” 

Planning rules which encourage nimbyism, a lack of resourcing, and little incentive for underperforming authorities to improve have all been identified as playing a part.

Importantly, the CMA found developers were not ‘banking land’ and preventing development. In fact, the need to hold limited ‘land banks’ at all was found to be a symptom of a complicated and adversarial planning system which makes long-term business and financial planning almost impossible.

Land promoters and developers are acting rationally – they are managing risk.

At its core, it’s an issue of certainty. Developers and land promoters cannot plan because they cannot predict when the planning system might grant them a decision. For large developers, pooling risk across hundreds of sites can make this somewhat manageable.

However, for smaller developers with a handful of sites, delays can be ruinous. This is where mitigating risk in other ways becomes critical – not least engaging an experienced professional team from the outset.

At Newton LDP, we know the pitfalls and where we can we work with local partners to inject pace and energy into the process. It means responding quickly to queries, leveraging relationships, working in partnership, and pitching opportunities well. This can help mitigate a slow and burdensome planning process wherever possible.

Of course, this does nothing to solve the fundamental problems. What can be done to solve the issues holding us back?

For a start, the next government should be prepared to enact legislative change. This could include re-visiting compulsory housing targets, which in recent years have been downgraded to ‘advisory’ only.

Significant resource must also be allocated to local planning departments. The backlog across so many local authorities due to a lack of skilled resource is enormous. It severely delays the start of housebuilding projects, but also contributes to a vicious cycle where talented planning officers leave for the private sector at the first opportunity.

Planning Committees across the country should also be given better training. Too often councillors are asked to make important judgements on issues or processes they do not fully understand. Whilst there is value in democratic oversight, it should be grounded in proper understanding.

There also needs to be an improved system for rewarding local authorities that do deliver against their Local Plan, and penalising those which consistently under-deliver or which do not have a Local Plan in place.

The CMA has rightly identified the issues the sector faces every day. The Government and local authorities must get a grip on this issue and give councils the tools they need to move applications through the process so developers have certainty and can build the homes this country needs. In the meantime, the onus is on the sector to manage and mitigate risk wherever possible.