The government’s promise to remove ‘red tape’ to help housebuilders could wipe out effective standards in the name of cost saving. And there is little evidence that it will lead to extra homes
Clichés are nearly always based on a kernel of truth within - that is how they have become clichéd. It is this truth that makes their constant repetition eventually hackneyed. The idea of “red tape” is one such concept that evades scrutiny precisely because it is so commonplace. No one is fighting the corner for red tape. “Stand up for red tape!” is not a refrain you will hear down the Dog and Duck.
So if we are all agreed that red tape is bad, should we not welcome any moves by the government to slay more of it? Especially, one might add, in the midst of a housing crisis stultifying the economy and pushing living costs ever higher for those not already on board the house-price gravy train. This is the narrative underpinning the latest initiative – a red tape review – launched by the Department for Business, Innovation & Skills at the back end of 2015.
It depends, of course, how we define red tape.
And herein lies the danger: nudging the dial away from valueless obstacles to building homes and towards anything that interested parties – housebuilders - identify as a cost. The last red tape challenge resulted in the housing standards review. Some of it was undoubtedly welcome: the Code for Sustainable Homes was far from perfect and needed reform. But does that mean that any higher standards for new homes are bad?
Prospective owners of one of George Osborne’s starter homes may be surprised to learn what has fallen away in the last 12 months: higher energy efficiency, minimum levels of daylight, cycle storage, space standards (aside from a few rare cases), internal recycling bins. And enhanced flood protection.
How are we following up to check that the extra numbers are delivered in return for this lower quality of life that smaller, less well-lit homes will provide?
Meeting these undoubtedly meant extra costs for housebuilders - though some are trivial (one of the complaints, for example, was that builders were required to make provision for clothes to dry. Red tape? Tell that to anyone who has lived in a tiny new-build flat without a bath to hang clothes above). But not all costs are undesirable.
It should be axiomatic that uncertainty is the real villain of the piece when it comes to building homes. Lots of builders built high code-level homes as a matter of course - especially smaller outfits, now in favour and tending to compete more on quality. Indeed, the now-ditched zero carbon homes policy achieved that rare thing: broad consensus. Despite its stretching ambition, builders were able to plan ahead, with eight years’ lead time, and everyone played the development game on a level pitch.
This matters. Taking the wrecking ball to standards for homes in 2016 will achieve short-term cost savings for the volume developers hell-bent on building to the minimum. But uncertainty has costs (never of the desirable kind), and each time standards are dropped, the centre of gravity moves further south. The result is a standard of new homes dictated by the lowest common denominator, and driven by an unremitting pressure to push up the share price over a horizon no longer than a year. Worse, it penalises those who have anticipated 2016 with higher aspirations and commensurate investment. Next time - why bother? If you’re playing a zero-sum game there is only one team it makes sense to be on.
All this is especially galling because cutting red tape will have barely anywhere near the effect intended. Where is the evidence that as a result of these lower standards 30,000, or 20,000 or 10,000 more homes will be built? How are we following up to check that the extra numbers are delivered in return for this lower quality of life that smaller, less well-lit homes will provide?
Hacking at regulations will reduce costs and increase profits for some housebuilders but will not fix an imperfect market that gifts those in a position to restrain the supply of homes the highest margins.
Process and outcomes are two distinct entities. We should cheer any streamlining that aids the process of building many more sustainable homes, more quickly. Outcomes, however, should be all that we concern ourselves with. If the desired outcome from this latest red tape challenge is to maximise returns for the biggest housebuilders, it has a good chance of being achieved. But if it is getting sustainable homes built more quickly – and more affordably – it will be found wanting.
John Stapleton is head of external affairs at Sustainable Homes