Planning and Housing

18.12.18

Letwin Review: A golden opportunity, but does it add up?

Source: PSE Dec/Jan 2019

Lois Lane, policy and research advisor at the Campaign to Protect Rural England (CPRE), analyses the outcomes and recommendations of the Letwin Review, and makes the case for radical reform of the country’s broken land market.

Last month, we argued that the final report of Sir Oliver Letwin’s review of build-out offered a golden opportunity for the government to show that it is serious about tackling the housing crisis and safeguarding our countryside. There is a clear need to build much more affordable housing, especially homes for social rent. Far more also needs to be done to meet the housing needs of rural areas in particular, where average incomes are significantly lower than in urban areas. In his draft analysis, Letwin was clear that the business model of the large developers is causing major problems, delivering expensive homogenous homes, only as fast as the open market can absorb them without lowering prices.

Having identified the problem, we hoped that Sir Oliver might recommend some truly transformative measures to fix our failing system. In particular, we called for reforms to the dysfunctional land market which underpins so much of what is wrong with the way we currently deliver housing.

So, how does the final report measure up? Right now, it is hard to say. Letwin has offered some promising recommendations, but they are full of complexity and detail. It remains to be seen how well they will translate into locally-applicable policy.

The principle of diversifying sites in order to speed up build-out rates is a good one. Homes for social and affordable rent, Rent to Buy properties, specialised housing for older people... the idea is that, by building more of these varied types of homes on large sites, delivery rates could be substantially increased without lowering the price of open market homes.

To this end, Letwin recommends the adoption of “a new set of planning rules […] to provide a diversity of offerings” on large sites, and the establishment of a National Expert Committee to advise local authorities and arbitrate disputes. These recommendations are largely of a piece with what we had been led to expect from the draft analysis. They have been broadly welcomed by the housing sector, though some organisations have voiced fears that a new independent governmental committee is more likely to result in increased bureaucracy than increased delivery.

Perhaps the most interesting of the report’s proposals, however, is that councils should use their new powers to enforce diversity rules to cap the value of land at 10 times the agricultural value on large sites. This would mean that a hectare of land would rise in value in many areas of England from £21,000 in agricultural use to just over £200,000 with planning permission for housing, rather than the £2m or more that it would typically be worth today.

If this proposal is adopted, and if it has the anticipated effect, it would represent a radical shift in the way that land is bought and sold, and in landowners’ expectations of profit.

It is likely, however, that changes will be needed to primary legislation, as well as just planning policy, in order for the recommendation to be effective. Under current compensation rules, set out in the 1961 Land Compensation Act, it is unclear whether local authorities could legally ensure that land values really are capped at 10 times existing use value, even in cases of compulsory purchase.

The Act currently enshrines the right of landowners to be reimbursed for the ‘hope value’ associated with any prospective planning permission they might have expected to receive for a site.

There is an argument that sufficiently clear and well-enforced planning policies would have the effect of removing hope value by removing the prospect of any alternative scheme being realised, but there are bound to be landowners and planning barristers who think otherwise! We might have to wait until 2021, when the proposals would be due to come into effect, to find out whether they are workable.

The impression CPRE has is clear. The public expects fundamental change to how housing is provided in this country. We would have liked Sir Oliver to recommend more radical land reform, but at the very least we would urge the government to adopt his recommendations in full.

Overall, there is much to like in this report. The fundamental recognition that market absorption rates currently dominate the UK housebuilding industry is extremely valuable, as are the recommendations to support local authorities to play a greater role in assembling and masterplanning large sites to improve the variety of homes being delivered.

Yet itʼs hard to shake the feeling that this is a missed opportunity. Having apparently contemplated some truly radical reforms to our broken land market, Sir Oliver has ultimately shied away from recommending an end to hope value.

Whether or not that will ultimately turn out to matter remains to be seen.

Top image: Dominic Lipinski via PA Images

 

Enjoying PSE? Subscribe here to receive our weekly news updates or click here to receive a copy of the magazine!

Comments

There are no comments. Why not be the first?

Add your comment

 

public sector executive tv

more videos >

latest public sector news

Sponsored roundabouts policy earns Bradford Council £128k a year

14/08/2019Sponsored roundabouts policy earns Bradford Council £128k a year

Bradford Council’s policy of allowing businesses to pay for sponsorships of roundabouts and grass verges has seen the local authority bring... more >
Council-owned solar farm generates £1.2m for frontline services

14/08/2019Council-owned solar farm generates £1.2m for frontline services

West Suffolk Council, through its local authority-owned solar farm, has raised more than £1.2m in funds to support frontline services in th... more >
TechnologyOne: Setting the foundation for shared service success

14/08/2019TechnologyOne: Setting the foundation for shared service success

Anwen Robinson, UK Operating Officer at TechnologyOne - an enterprise SaaS company - explains why adopting an enterprise vision is key ... more >

editor's comment

25/10/2017Take a moment to celebrate

Devolution, restructuring and widespread service reform: from a journalist’s perspective, it’s never been a more exciting time to report on the public sector. That’s why I could not be more thrilled to be taking over the reins at PSE at this key juncture. There could not be a feature that more perfectly encapsulates this... read more >

last word

The importance of openness after Grenfell

The importance of openness after Grenfell

Following the recent Grenfell Tower tragedy, Lord Porter, chairman of the LGA, argues that if the public are going to have faith in the safety testing process then everything must be out in the o... more > more last word articles >
Growing in confidence: Meeting the targets of Apprenticeship Levy

15/08/2019Growing in confidence: Meeting the targets of Apprenticeship Levy

Debbie Rayfield, corporate apprenticeship manager at Sefton Council, discusses her role within the council’s Apprenticeship Team and the challenges that can be faced meeting the targets of ... more >
Sponsored roundabouts policy earns Bradford Council £128k a year

14/08/2019Sponsored roundabouts policy earns Bradford Council £128k a year

Bradford Council’s policy of allowing businesses to pay for sponsorships of roundabouts and grass verges has seen the local authority bring in £128,000 a year. With business adve... more >

the raven's daily blog

New rules to change the future of Social Value

05/06/2019New rules to change the future of Social Value

The government has announced the introduction of new rules to change the future of social value and make the way housing developers stump up the money for infrastructure both simpler and more transparent. These regulatory changes are designed to help achieve its ambition to deliver 300,000 extra homes per year by the mid-2020s.  ... more >
read more blog posts from 'the raven' >

comment

Peter Kyle MP: It’s time to say thank you this Public Service Day

21/06/2019Peter Kyle MP: It’s time to say thank you this Public Service Day

Taking time to say thank you is one of the hidden pillars of a society. Being on the receiving end of some “thanks” can make communit... more >
How community-led initiatives can help save the housing shortage

19/06/2019How community-led initiatives can help save the housing shortage

Tom Chance, director at the National Community Land Trust Network, argues that community-led initiatives are a productive way of helping to solve... more >
Aberdeen's green transport fleet attracting international attention

19/06/2019Aberdeen's green transport fleet attracting international attention

Aberdeen City Council’s hydrogen spokesperson, councillor Philip Bell, highlights the Granite City’s determination to play a leading ... more >
A fifth of public sector workers have never received a thank you from the people they serve

13/06/2019A fifth of public sector workers have never received a thank you from the people they serve

A fifth of the country’s public sector workers say they have NEVER received a ‘thank you’ for doing their job as Public Service... more >

interviews

Artificial intelligence: the devil is in the data

17/12/2018Artificial intelligence: the devil is in the data

It’s no secret that the public sector and its service providers need to invest in technology to help make better use of their resources. Bu... more >
Digital innovation in the public sector: The future is now

17/12/2018Digital innovation in the public sector: The future is now

One of the public sector’s key technology partners has recently welcomed a new member to its team. Matt Spencer, O2’s head of public ... more >
New Dorset Councils CEO on the creation of a new unitary: ‘This is going to be the right decision for Dorset’

05/11/2018New Dorset Councils CEO on the creation of a new unitary: ‘This is going to be the right decision for Dorset’

The new chief executive of one of the new unitary authorities in Dorset has outlined his approach to culture and work with employees, arguing tha... more >
Keeping the momentum of the Northern Powerhouse

15/10/2018Keeping the momentum of the Northern Powerhouse

On 6 September, the biggest decision-makers of the north joined forces to celebrate and debate how to drive innovation and improvement through th... more >

public sector focus

View all News