London is unlikely to be the ‘big winner’ from a range of new government priorities including investment zones and planning liberalisation, while the UK is facing the prospect of a housing crash. But it needs to grasp opportunities where they may arise, seek to diversify housing delivery, press for better-resourced planning, ‘turbo-charge’ small sites for affordable housing and try to convince the government that growth is ‘synergistic’ with net zero initiatives.

Those were just some of the thoughts to emerge from the latest meeting of the New London Sounding Board last week, organised to debate the capital’s response to recent government priorities, as outlined by Stefanos Koryzis of London Communications Agency. A positive, he said, had been the installation of Simon Clarke, the new secretary of state for what is still called the Department for Levelling Up, Housing and Communities. But there were ‘big question marks’ around legislation for planning reform, while investment zones appear to be ‘Free Port light, meets Opportunity Zones, meets Housing Zones, meets a sort of strategic industrial land but also a housing Opportunity area. Nobody seems to know exactly what is in them’. 

Prime minister Liz Truss considers nationally imposed housing targets for local planning authorities to be ‘Stalinist’, and should be scrapped, Koryzis went on.

LCA’s Robert Gordon Clark branded this the most ‘chaotic’ period of government for some 30 years, with the investment zone document ‘reading like a GCSE or A level paper’. One region in the north has submitted 20 IZs, said Gordon Clark, even though just 40 are available for the whole country. But if they were anything like Free Ports, said Tony Travers, ‘they won’t add a farthing to GDP, they’ll just move it around’, something which is currently worrying the Treasury. If you were to follow the logic of government’s main objective of raising GDP, innovation zones would be in places where GDP would rise the most, not in places where they were needed the most for social reasons, he added. ‘They’re less worried about the cutting up of the cake than growing the cake. If you wanted to grow the cake effectively, you’d have one of these zones along Oxford Street an area which could really massively generate GDP GVA if it were given the chance’.

Phil Graham of the GLA said it was important not to be ‘pompous or superior’ about what government was trying to do, and although it was aware of inconsistencies in policy, there are some benefits that could be delivered for London. The GLA is working on a shortlist of potential investment zone sites with London boroughs, which was due to be submitted to government on 14 October. Undoubtedly, the levelling up agenda is in play, and London is not going to be the big winner, Graham conceded. But Clarke has been ‘absolutely clear’ that he recognises that London has a role to play in delivering the levelling up agenda and benefiting from the levelling up agenda. ‘The tone of the conversations we’ve had both with ministers and with officers suggests that there’s a good chance London might get something out of this process’, said Graham.

Some of the tax incentives, for instance, may enable London to take forward infrastructure projects, although the GLA is not ‘signing up wholesale to an as-yet undefined streamlined planning process’.

Stuart Murray from Waltham Forest – one of the areas to have been shortlisted for an IZ – said it was important to try and ‘grab an opportunity for London’ with its potential to accelerate schemes, albeit with planning control needing compromises on both sides. ‘I think we should see what we can get for London’.

Deirdra Armsby of Westminster agreed that London had to ‘go for it’ despite concerns over haste and the potential loss of community consultation, while Esther Everett of LLDC said quality has to be retained, or in fact should move to the top of the agenda on IZs. Climate change too needs to be embedded in this area as a new brand, with IZs a way of helping to hit targets.

But the Bartlett’s Yolande Barnes said the problem planning liberalisation is seeking to solve needs to be identified. She was ‘disturbed’ by top-down macro-economists saying growth depends on supply, and the theory that just increasing housing supply anywhere will do the job of solving the housing crisis. ‘The sort of liberalization that gets rid of Green Belts and just allows a free-for-all results in the sort of PD outcomes that we're probably all only too familiar with’, she said. ‘A drive to the lowest common denominator and some very poor results’. 

What was instead needed was a ‘huge divergence’ in the way we deliver homes – self procurement, self-builds and a greater dominance of SMEs, or face the real prospect of the mini budget ‘severely threatening’ delivery and a ‘high likelihood of a housing market crash’. ‘This is something we have needed for decades, Barnes added. But the irony of getting more players into the sector requires more planning, not less, and the delivery of plots at a fine-grained scale. ‘I see this as an opportunity to make that argument and to be thinking much more about planning whole neighbourhoods and plots for people rather than top-down housing targets’.

Pocket Living’s Thomasin Renshaw said small sites needed liberalisation of planning policy – perhaps schemes of up to 30 or 40 homes on brownfield sites of under a quarter of a hectare with a high proportion of affordable housing, whereby there is ‘super-fast track’ to turbo charge the ‘sadly forgotten’ discount market. This could deliver 30,000 homes a year, potentially delivered by SME developers. We also need to have an ambition to build more affordable housing, said Geeta Nanda, and that there was a worry in the removal of top targets.

But Sunand Prasad had a key message to make when it comes to net zero, especially given Clarke’s long-standing advocacy of the principle. ‘Are net zero and growth really synergetic?’, he asked. ‘Anybody who thinks they are and has evidence really needs to get in there, because it does seem to be an opportunity’. The UKGBC is preparing a response and collecting evidence on the matter.

Other points raised at the session included the expected budget cuts to local authorities (one outer London borough has to save a ‘jaw-dropping’ £40 million off their budget this year). ‘The only thing I’d say about that is that we are very well versed in doing more with less’, said Armsby. ‘We need to drive innovation and these sorts of challenges do tend to accelerate some of that stuff’. A focus here could be on the millions of words spent on planning applications, she added, but ‘customers’ of the planning system who are asked to pay more for services should be more ‘demanding’ about the service they get too. ‘That will assist us in making some of the changes we need to make in the back office’. GPE’s Toby Courtauld said private sector firms are ‘desperate to help’, and doing more with less is going to need the private sector to help. 

 

Following chancellor Jeremy Hunt’s budget speech yesterday (Monday) to withdraw the original VAT-free shopping idea proposed by his predecessor Kwasi Kwarteng, two NLA members had the following comments.

 

“We support measures to improve the stability of the economy but are concerned that the reversal of some of the policies previously announced is short-sighted and will stifle growth. For instance, tax-free shopping was something our members had long called for, as it brings more people back into London and incentivises spending. We recommend that a full economic assessment is carried out, because it is exactly this sort of investment in the West End that could have driven growth and prosperity.”

 

Paul Barnes, Chief Executive of the Association of International Retail, said: “The decision to reverse plans to reintroduce VAT free shopping for international visitors will come as a hammer blow to UK tourism and the British high street. 
 
 “This short-sighted move is based on inaccurate and incomplete projections, and risks putting a brake on the return of international visitors who are vital drivers of economic growth throughout the UK. 
 
 “We urge the Chancellor to pause, reflect and commit to a full cost-benefit assessment before deciding on the future of tax-free shopping, which we know is a key motivator for international tourists when choosing where to visit.