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A wink and a nudge to corruption in our planning system

What do bribery, conflicts of interest, opaque lobbying, weak oversight, curiously timed donations, excessive hospitality, and the revolving door all have in common? They are all corruption risks inherent within our discretionary planning system.  

We should be worrying about the findings made by anti-corruption organisation Transparency International, who found many local authorities lack the necessary safeguards to prevent corruption in our planning system. This begs the question – why is the left not demanding more from planning reform?

Permission Accomplished shows us why because of corruption we should be sleeping with one eye open

Discretion, as opposed to rules, is arguably at the heart of our planning system. This creates inherent risks within the framework designed to provide democratic oversight to the development of our built environment. Not one of the responses to the Planning for the Future consultation made available to date, nor the Select Committee, have focused on the need for planning reform to combat corruption.

The definition of corruption according to Transparency International is “the abuse of entrusted power for private gain”. Corruption can come in many forms. It can be in the form of political donations to local branches of a political party around the same time as a planning application. Or it could be payments for the tuition fees of local councillors’ children.

There have been some high-profile cases in the past few years that have shed light on the flaws of our planning system. Transparency International case studied many of these in their report ‘Permission Accomplished’. By way of example, the report includes an investigation in Liverpool by the Serious Fraud Office (SFO) involving multi-million-pound developments where no minutes of meetings between developer, councils, and officials had taken place.

Assessing corruption risks requires us to look closely at how it occurs in the first place

A case study covered in the report looked at how a Conservative Chair of a London planning committee had become embroiled in allegations of impropriety. He was receiving excessive gifts that had not always been declared. By March 2018, following media pressure, the local councillor had referred himself to the Monitoring Officer. His self-referral warranted formal investigation.

The Investigating Officer found the volume and frequency of hospitality and gifts declared by the individual as “extraordinary”. Important to note that no evidence proved the hospitality had influenced any planning decisions. However, the council did find the actions breached their code of conduct.

Another case study in the report highlighted findings from an investigation by The Daily Telegraph. A Liberal Democrat councillor employed by a public affairs company was said to be using a range of lobbying tactics to secure planning consents for their clients. The councillor told the Daily Telegraph that the firm employed numerous former or present councillors at any given time.

If other councillors refused to talk to lobbyists about a particular planning permission certain ‘tricks of the trade’ could be used to get around this. For example, he claimed he could use contacts to try and replace difficult councillors on local authorities’ planning committees, with more agreeable ones to help secure permissions for clients.

We cannot expect every local authority leader to be followed by the eyes of Argus

Shortly after the Independent Mayor of Tower Hamlets was removed from office for election fraud, a fixer was recorded allegedly requesting a £2m bribe for four incumbent councillors. In addition, the individual allegedly also requested a £15,000 a month retainer for high-end hospitality from a developer seeking planning permission.

Below is an excerpt from a recording produced by the Sunday Times back in December 2017, having regard to an ongoing case noted in Permission Accomplished. The recording demonstrates the inherent weakness and lack of democratic oversight systemic within highly discretionary English planning system.

“We are lobbying certain members to try and approve this development. But of course, then there is the additional bit that we will be doing behind the scenes, and this is where the premium covers that.”

“The site doesn’t have planning on it. As soon as you buy, your team will have to put the application in, and the gatekeepers will bless it. End of.”

“Well it’s the elected members. Politicians that have a show of hands. You have seven people, in this case about seven. If you take out the deputy it is six key votes, six elected members, members that have been elected by people, by the public, they make the final decision”

Sunday Times Recording, December 2017

Labour Mayor John Biggs, who ran on an anti-corruption ticket, called in accountancy firm Ernst and Young to undertake a full and independent investigation of the developer’s claims of corruption. Since becoming Mayor, Biggs says he has fought hard to clean up the borough, and to tackle the corruption and wrongdoing of the past.

The whistle blowers’ allegations of bribery in connection with a planning application was swiftly considered by a Queen’s Counsel (QC) experienced in addressing bribery and corruption cases. Following the QC’s advice, the Chief Executive reported the allegations to the Serious Fraud Office. The case has since been referred to the National Crime Agency where it remains still under investigation.

Panelisation of planning decision-making removes consenting authority of councillors in beady-eyed Australia

In some places in Australia, legislation removes councillors from exercising any consent authority functions. Instead Australia in many places constitutes mandatory local planning panels, namely under the Planning Panels Act 2018. Mandatory local panels were argued to “bring expertise, transparency, and integrity” to the process of assessing planning applications. Planning authorities across Australia had exemplified the use of local planning panels from as far back as 1997.

Local planning panels have become a more conducive structure for development and industry in Australia. In particular following the success of Joint Regional Planning Panel (JRPP) introduced in 2009. These regional panels would be responsible for developments more than $20 million capital value. In effect removing local councillors from the decision-making process. This instead favours an independent decision-making body for regionally significant development applications, significantly reducing the risk of corruption.

Research reveals local authorities lack twenty-twenty vision over corruption risks

In their report Transparency International assessed 50 of 317 local authorities across the countries that have planning responsibilities in England. It found 32 councillors across 24 authorities holding critical decision-making positions in their local planning system, while at the same time also working for or on behalf of developers. This poses the question are we electing local representatives or political lobbyists?

Transparency International assessed how each local authority prevents, protects, and pursued corruption in planning decisions by local councillors. In it they judged these authorities against best practice standards. Developed by Transport International, and using evidence from their research, they built on existing work by the Committee on Standards in Public Life (CPSL) and the Local Government Association (LGA).

Local authorities were scored between zero and 100. 100 being seen to meet good practice. By this measure, not a single local authority taken from the 15 per cent sample demonstrated either a top or second quintile performance. This suggests local authorities are leaving themselves open to serious allegations of improper conduct by democratically elected representatives.

@TransparencyUK found many local authorities lack sufficient safeguards to prevent corruption. Labour should be demanding more from planning reform.

The corneal erosion of institutional checks and balances make the planning system fertile ground for abuse

The report found inadequate oversight to ensure probity in the planning process. It went insofar as to highlight major corruption risks relating to councillors’ involvement in planning decisions in the current system. Low levels of transparency, poor external scrutiny, networks of cronyism, reluctance or lack of resource to investigate alleged wrongdoings, and the sums of money involved provide a fertile environment for those entrusted to make planning decisions abuse it for private gain.

We have seen an erosion of institutional checks and balances on this behaviour. Independent audits of local authorities have been abolished. A universal code of conduct for councillors abandoned for local defined standard. All in combination with the capacity of our media having been watered down. Labour needs to continue picking up the mantle in tackling corruption, as has been the case lately following calls for tougher regulation of suspected money-laundering activities.

Lines between lobbyists and elected local representatives remain terribly blurred

Bob Colenutt, in his book ‘The Property Lobby: The Hidden Reality Behind the Housing Crisis’, makes a good point. He highlights to us the revolving door between local authorities, consultants, and developers is of equal importance to developers lobbying government . Many councillors have second jobs working as lobbyists and advisers to developers and housing associations. Often working in their own or adjoining areas.

Bob pointed to the case of Southwark in 2017. Here 20 per cent of the local authority’s 62 councillors were employed as lobbyists. Almost one in ten councillors in London either work for a property business or have received hospitality from them. Nearly 100 councillors have links to property companies or lobbying and ‘communications’ consultancies involved in planning.

The local councillor is a denizen of the English planning system. It is the discretion of these individuals over decisions that shape our built environment. Is it just a coincidence that our democratic planning system encourages so many councillors to work in lobbying for developers. Or does this need to change?

Local authorities can be more eagle-eyed if they reinforce recommended guidance and best practice

We need to increase transparency, tighten rules to protect the planning process from abuse for personal gain, and to strengthen oversight over councillors to deter behaviour that would bring the integrity of the planning process into question. Transparency International made the following ten recommendations:

  1. Minute and publish all meetings with developers and their agents for major developments
  2. Prohibit those involved in making planning decisions from accepting gifts and hospitality that risk undermining the integrity of the planning process
  3. Increase transparency over gifts and hospitality
  4. Stronger leadership from the industry on ethical lobbying
  5. Improved management of financial interests, which include the repeal of Section 31 of the Localism Act
    • To be replaced with a new requirement removing councillors from decisions where it can be reasonably regarded that they hold a significant conflict of interest that could prejudice their judgement
  6. Prohibit all councillors from undertaking lobbying or advisory work relating to their duties on behalf of clients
    • This should prohibit members from lobbying councils on behalf of paying clients
    • Prevent councillors from providing paid advice on how to influence councils
  7. Manage the revolving door between elective office and private business
    • Prohibit those who have recently worked as lobbyists for developers from sitting on planning committees
    • Or receiving executive responsibilities relating to planning
  8. Provide clear guidance and boundaries for councillors so they can better understand what is and is not acceptable behaviour
  9. Provide a meaningful deterrent for serious breaches of the code
  10. Increase transparency over investigations and enforcement actions

Transparency International’s report raises yet again alarm bells about risks that remain very real. Sadly, local authorities still remain ill-prepared to address them. Labour should give these anti-corruption recommendations serious consideration, put anti-corruption at the heart of its agenda, particularly when it comes to planning reform.

<strong><span class="has-inline-color has-accent-color">Christopher Worrall</span></strong>
Christopher Worrall

Editor of Red Brick. He currently works in land acquisition for Guild Living. Chris currently sits as a Non-Executive Director of Housing for Women and is a member of the Labour Housing Group Executive Committee.

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Good luck to the Green Belt campaigners

Rochdale council, along with nine other councils that make up Greater Manchester, has embarked on an ambitious strategy to plan the future development needs of the whole city region. It is not without its problems and controversies, but Faisal says that is nothing to the devastating impact the Government’s Planning White Paper will have on all our local communities.

Rochdale is part of Greater Manchester, a conurbation of more than three million people. Civic leaders there are grappling with the hugely complicated problem of deciding how many new homes we need to build to meet future demand, and even more controversial, where to build them.

The fancy name of the Greater Manchester Spatial Strategy (GMSF) aims to set out our housing and industry needs for the next 20 years. Our local leaders have been debating and postponing the issue for what seems like an age. Looking that far ahead seems more akin to crystal ball gazing rather than detailed planning calculations and projections.

Debate has led to several “Save Our Greenbelt” campaigns: residents worried about the bulldozers tearing up their local countryside walks, green spaces, and beauty spots. I say good luck to them. There is nothing more worrying than the matter being left to planning officers and housing developers carving up Greater Manchester’s planning map.

Who else will speak up for our precious green belt but those who enjoy and value it? Tens of thousands have made their views known through public consultations – and we are to have yet another round starting this Autumn.

But there is one thing that should worry every single resident of Greater Manchester, never mind every environmental campaigner, that will have a huge impact on future planning decisions for years to come.

Government recently published a planning white paper which proposes reform of the planning system in England. The proposals will see councils lose control of important planning decisions. 

The Bill says it would “streamline” the planning process, cut red tape and make it easier to get new homes for local communities built. But, in fact, it would lead to developments going ahead without any proper public scrutiny and against the wishes of local people.

The Government’s plans mean that areas would be earmarked for development and then there would be no need for planning permission to be granted by local councils. What is worse, it will be using algorithms to decide how many and where up to 300,000 new homes a year will be built.  We all know how successful these computer-led diktats were in setting A-level results.

It will result in little control over developments, overriding local knowledge and circumstances, with local people having no say over developments. The Government has also stated that developments of 50 homes or less would not have to provide any affordable housing. I have been a local Councillor for a long time, and I do not ever recall ever reading a Government report which has annoyed and terrified me more than this one.

Local communities deserve the power to run its own planning system. Planning committees should not be threatened with having its powers taken away. There has been a huge amount of criticism of these draconian proposals all over the country, but the Government is not listening. They want to help their developer friends by sweeping away the local restrictions that keep them under some control.

No parcel of land will be safe from the threat of development, and with fewer affordable homes, many will be too expensive for local families. The Housing Minister Christopher Pincher publicly confirmed that he is looking to loosen restrictions in planning law, to make it easier to push through housing schemes.

And the Prime Minister meanwhile has stated he will be bringing forward the ‘most radical reforms of our planning system since the end of the Second World War. The planning system already favours the developers over communities, and any further loosening of planning laws would be a disaster for towns and cities right across the country.

At the root of all this is local democracy. Local communities and their elected councillors should have the ability to make their own decisions based on local needs. What happens in our local planning committees is extremely important and should be vigorously defended. I will be continuing to campaign for greater local control and I hope our Green Belt campaigners will be doing the same.

People must have the opportunity to make their views known loud and clear, however uncomfortable it is for politicians, whether in the town hall or Whitehall. You have the ultimate power to turn us out. You cannot do that with faceless civil servants and planning inspectors who will be running the show in the future. Not to mention their dreaded computer programmes.

<strong><span class="has-inline-color has-accent-color">Faisal Rana</span></strong>
Faisal Rana

Faisal Rana is a local councillor in Rochdale and sits on the planning committee.

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Labour’s Planning Commission and the Planning White Paper Compared

Similar analysis different outcomes

During the latter stages of the previous government a Planning White Paper was expected almost on a daily basis. Like many other policy initiatives it fell foul of the Brexit stranglehold on parliament. It was partly to ensure that Labour had a response to the long expected White Paper that it launched a Planning Commission in September 2018 to develop a new suite of planning policies in advance of a General Election then expected to be in 2022.

Labour’s planning proposals made it into the 2019 manifesto but as we know Labour did not make it to government. Nevertheless, the Planning Commission’s suggested reforms sit as a powerful antidote to the view of planning and what it can achieve set out in the Government’s White Paper. Having said that the similarity in some of the analysis of what needs to change is striking.

Labour’s recommendations for greater use of digitisation in the planning system to improve accessibility and engagement with planning and the need for more investment in skills and training for planners are mentioned in the White Paper proposals.

Likewise, the need for reform of the Community Infrastructure Levy and putting in place a nationally agreed method of assessing housing need also are also reflected in both documents. Similarly, there is cross-party agreement that the design and quality of what is built need to be improved. There is also widespread agreement that local plan making needs to be simplified, speeded up and subject to statutory time limits.

However, what is massively different is the policy agenda that is envisioned by Labour and the Conservatives to achieve long lasting change to our neighbourhoods, regions and nation, and the values that need to underpin our planning system to achieve development fit for the 21st century and beyond.

Since 2010 the blame for the government’s inability to deliver on housing targets including those for affordable housing was laid at the door of planning even though the numbers of new houses approved through the planning system but not actually built rose year on year.

Alongside this, constant deregulation of planning, greater use of permitted development, sanctions against planning authorities for having too many appeals, contracted out planning services and too many local authorities without local plans in place led to an increasingly undemocratised, technically focused planning system that was increasingly at the mercy of speculators and where plan making and the visionary underpinnings of planning took a back seat.

Communities for the most part felt that planning was done to them and their views on planning were increasingly ignored or bypassed. Place making if it happened at all was the result of developers, planners and residents working together, despite the constraints of the system, to build or rebuild better communities.

And it was the need to build and rebuild strong and sustainable communities that was the starting point for Labour’s Planning Commission. We wanted place making to be at the heart of a planning system that would be value based to tackle inequality and address climate change.

The Labour Commission included representatives from key planning agencies and stakeholder groups and meetings of the Commission were supplemented by regional events with residents, developers and local authorities. The strong evidence base the Commission established documented the democratic deficit and technocratic complexity at the heart England’s planning system and led to proposals for radical change most notably in the need to build good quality homes with supporting infrastructure in genuinely sustainable neighbourhoods.

Thus, Labour’s proposals include recommendations for a new system of building standards to address quality, climate change and safety issues, and suggest putting in place new principles and guidance as well as national standards to achieve high quality design. It argues for a review of permitted development with planning permission being reinstated in most cases.

Labour wanted to see the relationship between what happens in local communities, their wider regions and the country as a whole reflected in a connected planning system with community, local, regional and national planning tiers so that infrastructure, jobs, local services and leisure and cultural facilities could be planned at the right spatial level. This would not only enable people to be properly housed it would facilitate people travelling safely to work with a transformation in greater use of cycles and public transport.

All neighbourhoods would be planned to have a high quality of life with the services they need to promote well-being on their doorstep and with the heritage of the built environment and natural environment protected and where possible enhanced. We wanted to achieve this by giving residents the ability to plan their communities alongside planning professionals who would give advice and would liaise between levels of the planning system.

That the Government’s White Paper says nothing about how to achieve well-being or equity through the planning system is perhaps not a surprise. What is a surprise is how little is said about land availability except for arguing that greater certainty needs to be given by the planning system to enable developers to come forward.

In contrast Labour suggested a radical approach to bringing more land forward by proposing setting up Public Development Corporations with the power to purchase, sell, and develop land to assist with the making and remaking of communities, alongside greater use of a simplified CPO system if necessary.

Labour also proposed introducing a land value capture system that would capture uplift for current and future communities. And Labour sees the  greenbelt not as a land set in aspic but land to be used as part of climate change mitigation and that can help reduce health inequalities.

The Government has argued for change too but their proposals for a new zonal system do little to match the rhetoric expressed in much of the White Paper and will depend on the type of zonal system adopted as well as the details of the plan that goes alongside it. It could result in a development straight jacket without measures to support delivery and the high quality development the Government says it wants to see. Likewise the proposal to support permitted development that is replicable could reduce quality rather than improving it.

Both of these proposals also run the risk of further denuding democratic oversight of, and involvement in, planning. There is no acknowledgement in the White Paper apart from keeping some sort of neighbourhood planning of the need to have citizens actively engaged in planning rather that simply being consulted (and then often ignored) about it.

Labour sought to address the need for active participation by involving  residents in the  first tier of planning – producing their community plan and making it the building block of the whole planning system.

The conclusion of TCPA is that the White Paper does not provide a single new right for community participation or a single new opportunity for democratic involvement in planning. For that reason alone the government should be asked to think again or come back with much more detail on how they will actually achieve the good quality place-making they say they want but cannot deliver through the proposals outlined so far.

<strong><span class="has-inline-color has-accent-color">Roberta Blackman-Woods</span></strong>
Roberta Blackman-Woods

Roberta Blackman-Woods is the former MP for the City of Durham (2005 to 2019) and was the Shadow Minister for Planning until November 2019.

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The ‘Planning White Paper’ and a basis for possible reform

The Government’s Planning White Paper proposes to replace the current regime of local authority determination of specific development proposals by a system of zoning.

Local Plans would define three zones: growth zone (where designated sites have “outline permission”), renewal zone (statutory presumption in favour of development being granted for the uses specified as being suitable), Protected zone (“more stringent development controls”). There is an option to combine growth and renewal areas.

For growth and renewal zones plans would “set out suitable development uses, as well as limitations on height and/or density as relevant. These could be specified for sub-areas” (eg town centres).

For protected areas, plans “would explain what is permissible by cross-reference to the National Planning Policy Framework”.

Development Management policies would be set by National Planning Policy Framework (with an option to have limited development management policies in local plans), plus local design code(s) supported by national design code. There is a national design guide and manual for streets (where there is no local design code, the national one would be applied).

How zoning works in the US

Traditional zoning involves local municipal zones for locales with zoning ordinances (ordinance is a municipal by-law).  These can be by land use and sub-categories within land use – ie different housing types ( single detached dwellings/apartments) or by density (low/medium/high).

There are a number of important variations:

a) Inclusive zoning (includes affordable housing)
b) Incentivised zoning (allows higher density development in exchange for higher local taxation)
c) Form based zoning (new urbanist approach – design based rather than directly land use/functional based)
d) Performance zoning ( based on environmental impacts)
e) PUDs (Planned Urban Development) Zoning sets parameters but individual schemes negotiated between developer and municipality

The Planning White Paper is however unclear on what form of zoning would apply in England.

Current  planning practice in England

Local plans (district/borough wide) allocate development sites  and/ or for specific uses and set both specific policies for designated sites and more general policies for non-designated ones. Local plans set policy requirements to supplement national planning policy requirements and/or facilitate their implementation locally. 

These can set density policies and housing type requirements for different sub-areas or for individual sites. Area Action Plans/ Area Supplementary planning guidance can be determined for development/ redevelopment areas. These can be supplemented by design guidance/ design code, by masterplans (for major sites) and site briefs. Local Development Orders can set specific policy requirements for areas within a local plan area.

UK Land use allocations can be considered to be a form of zoning (though the term not widely used) though not all Local Plans allocate specific land uses to sites and development can still be considered on non-allocated sites. Land use allocations may also not be strictly applied and although in theory we have a plan-led system, alternative uses may be permitted.

Local Plans however set parameters within which individual development allocations should be considered.  This system is comparable with the US PUD system which is also a two-stage system. The distinction between American system as ‘zonal’ and the English system as ‘discretionary’ is a gross over-simplification.

In England, Section 106 planning contributions (s106) can be negotiated on site by site basis in exchange for increased density and Community Infrastructure Levy can be varied by sub area (both in practice similar to US incentivised zoning system).  Affordable housing requirements set in local plan policy, which can vary by area, are parallel to US inclusive zoning approach.

The Planning White Paper would appear to propose a very simplified broad-brush approach to zoning – simplified when compared to the traditional US approach to zoning, which allows much more specific zoning categories.

The key question is whether the proposed English approach to zoning will allow for any of the variable approaches operated in US cities (where zoning is determined by the municipal authority), which are in effect deliverable in practice within the pre-existing English planning regime.

A basis for possible reform

The current planning system and planning practice in England does need reforming. (As planning is a devolved function,  the White Paper proposals do not apply to Scotland, Wales or Northern Ireland). There is a case for Local Plans being much more specific about permissible land uses on specific sites and the specific requirements which would then apply.

This would certainly increase certainty for both developers and local residents. It would also ensure land values reflect permissible uses. However, local authorities, at both officer and member level, need to have the power to ensure that development proposals are fully compliant both with the land use allocations in the published plan and with the policy requirements set out in the plan.

This means that a LA development management function is still required. This will include any decisions as to community mitigation and benefit through a form of scheme specific planning obligations regime, which would, where appropriate, be additional to any value-based form of infrastructure levy.

Objectors should not however be able to block schemes which are fully compliant with the published Local Plan in terms of land use and policy requirements. Moreover, applicants should not be able to appeal against LA planning decisions which are supported by a published Local Plan.

However,  local plan making must be set within a wider strategic context, as many local authorities cannot meet their housing needs within their own area, while other authorities may  resist  helping out neighbouring authorities within their travel to work area. 

The Planning White Paper is largely silent on this critical issue, and in fact proposes to abolish the current ‘duty to co-operate’ with neighbouring authorities and the requirement to produce statements of common ground. 

It is necessary that we re-establish a framework of national and regional planning which links national funding of infrastructure to decisions about the locations most appropriate for both residential and employment growth.

Neighbouring authorities should be required to agree a strategic plan within this national and regional framework. No local council should be allowed to opt out of making a contribution to meeting an area’s housing and employment needs.

Localism on its own is not enough and we need a balance of powers between the different spatial levels of governance and democratic accountability.

<span class="has-inline-color has-accent-color"><strong>Duncan Bowie</strong></span>
Duncan Bowie

Duncan Bowie is a semi-retired academic and strategic planner who has written a number of books on housing and planning.

He is a long-term member of the Labour Housing Group.

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We need a flexible zoning system to end the housing crisis

There are three things which are connected yet almost unique about the British economy. It has exceptionally stark geographic inequality; it has an extremely sharp housing crisis in its most expensive cities; and it has an unusually dysfunctional planning system.

Addressing those regional divides and the housing shortage requires replacing our discretionary planning system with a new flexible zoning system. The new reforms underway are one approach, but there are other examples from abroad which would also be major improvements over what we have now. But there must be fundamental change in how the planning system works if we want fundamental changes in inequality and housing outcomes.

Our discretionary planning system rations new homes

The current planning system is highly discretionary. This means that the planning system is empowered with a great deal of discretion to decide whether a development should take place on a specific site or not. In effect, new homes are rationed by the planning system, case-by-case.

Although there is often a local plan which “leads” development, this is not always true – York has not agreed one since the 1950s. Even when there is a local plan, the real power as to whether new homes can be built or not is in the case-by-case decisions by planners and planning committees. Applying for planning permission to build private homes, affordable homes, or social housing is never certain. One in ten planning applications fail, despite the fact that developers are presenting proposals they believe will succeed.

The discretionary planning system makes inequality worse

This discretionary planning system creates poor outcomes which have previously been set out in Red Brick, and which underpinned Centre for Cities’ contributions to the Labour Planning Commission. It forces new development into the sites with the lowest political costs rather than the sites most suitable for new homes. This is why half of all suburban neighbourhoods build less than one house a year and a fifth build zero, even though these neighbourhoods already have the infrastructure to absorb some population growth over a long timeframe.

The discretionary element also makes inequality worse, as it decouples the local supply of new homes from local demand. Some of the most expensive and prosperous cities in the country, such as Bournemouth and Oxford, build far less housing than cities with weaker economies such as Wakefield and Telford. These local housing shortages mean that the average house in Oxford costs 17 times the average income, and 6 times average incomes in Wakefield.

This mismatch between supply and demand creates terrible housing crises in the cities with the most successful labour markets and fuels inequality. In expensive cities, it widens divides between renters and homeowners. As housing costs for renters in Bristol increase, so does the wealth of their homeowning neighbours as house prices rise.

But it also creates divides across the country. As we do not build enough homes in cities like Brighton to stabilise prices, average housing equity per house in Brighton rose by £89,000 from 2013-2018. But an identical twin of such a homeowner in Sunderland would only have gained £3,000, as local land values have not risen due to the struggling local economy. This is the opposite of levelling up – the planning system redistributes wealth from the poor to the rich.

The discretionary design of the planning system creates a permanent shortage of homes

For reform to solve these problems, we need to understand why the planning system systemically creates them. The explanation lies in the discretionary, case-by-case decision making of the current planning system. Few places abroad have such a system where this feature is so important. Ireland and San Francisco are two locations which do, and accordingly have dire housing shortages.

In fact, England’s discretionary planning system can be understood most clearly by comparing it to the planning systems of the former Eastern Bloc. In these planned economies, production was also rationed by the discretionary and uncertain granting of permits by planners, but for things such as mayonnaise or cars rather than new homes. Many of the behaviours which are sometimes described in England as unique to housing popped up across sectors in these Soviet-style economies – shortages, equivalents to land-banking, absorption rates, endless negotiations between planners and firms, poor quality new products, inequality in access to supply and speculation, among others.

These are more than just parallels. Both the former Eastern Bloc and the UK housing market are “shortage economies”. Their permanent state of undersupply is maintained by how the discretionary design of their planning institutions rations production, and is the defining characteristic of their systems. A few policy tweaks here or there or a little bit more funding won’t solve this core problem.

Instead England’s planning system needs fundamental reform which learns from other planning systems abroad that result in better housing outcomes, and for the discretionary element in our system to be minimised or removed.

England’s new zoning system is a move in the right direction

Moving away from a discretionary system implies a new flexible zoning system, where provided a proposal agrees with the local plan and building regulations so that the new structures are safe, it legally must be granted permission. This is a common form of planning around the world.

The new zoning reforms introduced earlier this month – establishing growth, renewal, and protected zones in England – are a big step in this direction. Within growth zones, there is no discretionary element, as the principle of development is already accepted by the zoning. Developments which comply with a design code and legally must be granted planning permission, after planning has resolved technical elements such as road layouts. This certainty will, within growth zones, end the unpredictable rationing of new homes that the current planning system creates, and by extension, address the housing shortage.

We can argue about the details, but we need a new zoning system to end the housing crisis

There are political choices to be made as to the inner workings of such a new zoning system, and Centre for Cities has previously set out how these could work. Japan is the clearest example of such an alternative framework abroad, where there are twelve different zones which shape the density and use of land while still providing much more flexibility than our current system.

As a result, Japan has much more affordable housing than England, as it builds 900,000 homes a year while England struggles to build 240,000. An English flexible zoning system could achieve this too. We could also make the political choice to provide far more social housing than Japan, or have a greater focus on energy efficiency and climate change, or public realm and design, and the Labour Planning Commission set out some of these areas as priorities.

But while the details of such a new flexible zoning system are contestable, the principle that we need one to solve the housing crisis is not. The discretionary granting of planning permissions is the single biggest systemic problem with our framework. If we want to improve the conditions and affordability of homes across England, we need to do things differently. We need to replace our planning system with a new flexible zoning system.

<strong><span class="has-inline-color has-accent-color">Anthony Breach</span></strong>
Anthony Breach

Anthony is an Analyst who has worked as part of the research team at Centre for Cities since 2017, where he focuses on housing and planning. He won the Thinkhouse Early Career Researcher Prize 2019 for Capital cities: How the planning system creates housing shortages and drives wealth inequality.

Anthony has also worked on research on commercial property in cities, services exports, productivity, and manufacturing. He also has a particular interest in lessons for planning, housing, and UK cities from Japan and the countries of the former Soviet Union. Previously he worked at the Fawcett Society as a Research Officer.