Public Sector Focus

Housing devolution: A major key to unlocking economic development

Influential council chief executives recently discussed the importance of devolving housing responsibility to local areas in the future in order to support the country’s economic development. David Stevenson reports from the UK Northern Powerhouse International Conference & Exhibition.

Future devolution of housing responsibility and the ability to plan strategically at a local and regional level will be key to supporting the economic development of the country over the next decade, chief executives at five of the most influential councils in the north have stated. 

During a panel session at the recent UK Northern Powerhouse International Conference & Exhibition, John Mothersole, CEO at Sheffield City Council, which signed a £900m devolution deal last year, called on the government to “stop agonising” and devolve housing responsibilities in the future. 

He said that despite housing being a national issue, it must be dealt with at a local level, a sentiment that Manchester City Council’s CEO Sir Howard Bernstein, Newcastle’s Pat Ritchie, Liverpool City Council’s Ged Fitzgerald and Leeds City Council’s Tom Riordan were all in agreement with. 

Flexible approach to investment 

Pat Ritchie, CEO at Newcastle City Council, and the former chief executive of the government’s Homes and Community Agency, said there is a tendency for national housing programmes to be driven by the acute housing shortages that are in the London and south east. 

“I think one of the arguments we can make collectively is that we need a more flexible approach to investment in local projects that actually takes a bit of risk but also takes a longer term view in return,” she said. 

“We have lost quite a bit of that in the way housing programmes and investment are structured.” 

Ritchie added that given how local authorities are pro-growth it will be important to get the right neighbours at a local level to join up housing and transport. “One of the things I think you need to think about is how you get housing policy and housing investment, and indeed investment into next-economy type developments, and how we get greater flexibility in how government makes its investment,” she said. 

Current outcomes are overheated 

Sir Howard Bernstein, who has been influential in much of Manchester’s growth in recent years and has played a pivotal role in the region’s £6bn health devolution deal, stated that the current outcomes for planning and housing are “massively overheated”. 

“You see housing authorities in London acquiring land in Peterborough, almost in the lower parts of the Midlands, in order to actually provide the houses to support the growth and development of London,” he said. “That is not a sustainable proposition over the next decade. 

“We have to look at the way in which we drive growth, if we are going to meet the nation’s productivity target over the next decade. This isn’t just about the north of England, it is about how England and the UK actually remains a successful economic nation.”

Local housing growth 

Morthersole added that the current way housing growth is supported is “that it is seen as a national issue, as it is, but that the solution is designed at a national level”. 

“But every housing market is local, and it is proving very difficult to get the rate of housebuilding that we want to deliver nationally where the current support is quite rigid and is designed to national level,” he said. 

Mothersole stated that it isn’t just a case of the northern market being different from the London market – “the Sheffield market is different to that of the Newcastle market” – so there needs to be local planning and devolution in place.

Strategic planning at a local level, according to Sir Howard, has been very important in Manchester in order to give the “confidence and sustainability” in the city’s ability to drive employment and to ensure housing is in the right area. 

“The problem we have in this country is that planning is seen from the eyes of the lens of London,” he said. “All of us, in our different ways, are pro-development. What we have got to have are the incentives which help us actually deliver development.” 

Greater integration

Tom Riordan, CEO of Leeds City Council, was in agreement with Sir Howard, saying that the big challenge with the current system is that it doesn’t integrate thinking about the economy with transport and housing. 

“Whitehall is incapable of doing that,” he said. “I’ve worked in Whitehall and I know how hard it is to hook up with another department and make your own department work – let alone all of them. 

“But at that strategic level, which Sir Howard described, you can do that and you can make those decisions alongside each other in a democratic way. I think it is a tremendous opportunity for us, as a country, to make much more integrated and sustainable decisions that will help people. That cannot happen under the current system, which is broken.” 

Regional decisions 

During the debate, facilitated by John Humphrys from BBC Radio 4, the chief executives were asked whether there needs to be a northern development agency. 

In response, Riordan said: “I worked for one of the Regional Development Agencies (RDAs) and there is a value to collaboration at the northern level, but actual delivery takes place locally. 

“I think you have to give the capability to those city-regions to really fire and power on.  But also make sure, at the northern level, that they collaborate.” 

He added that he wouldn’t advocate a massive new agency because this “would likely get a big push back from local areas”. But he did say that there needs to be collective decision-making on the “big ticket” issues, like the development of a northern transport plan. 

Sir Howard added that he wants to see a “complete revamp” in the way big transport schemes are processed and approved. He described the current state of affairs as “just mad” and being “wholly designed to prevent and delay schemes being approved”. 

Making the Northern Powerhouse work 

The local authority CEOs also said that there needs to be greater collaborative working in order to make the Northern Powerhouse work, a sustainable plan must be developed for the future, and political will must remain for the project going forward. 

Liverpool City Council’s Ged Fitzgerald added that in order to support the Northern Powerhouse he would be happy for decision-making to be made for the benefit of the whole region, as opposed to the benefits of the individual cities. 

Discussing how the north could attract big businesses, like Google, to relocate to the region, Fitzgerald said: “I would make sure Liverpool put forward the best possible pitch. However, if Google – for instance – decided Manchester was a better option I wouldn’t get in the way of that. 

“It would be counter-productive to what we are all trying to do in order to grow the northern economy.” 

All the CEOs said they agreed with Fitzgerald on this new type of regional decision-making for big decisions, adding that there needs to be a change in perception that London is the only economic engine in the country. But, in order to facilitate this, the right transport, infrastructure and housing needs to be in place for the local partners.

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