If they are ever to be built, Britain’s planning system needs radical change. The planning white paper, now out to consultation, aims to streamline applications. But critics claim it does little to stop councils playing politics with housing.
Over the next three weeks, we ask a builder, a planner and a leading housing adviser three key questions: what’s gone wrong, who’s to blame and how can it be fixed? First up, Mark Leftly meets Tony Pidgley, the most influential housebuilder in Britain.
Tony Pidgley says his job is his hobby. If that is the case, it is a time-consuming one: he left the house at 5.40am, had his first meeting an hour later and will knock off early at about 8pm.
It is the second time that Building has met Pidgley this week. On the first occasion, he kept us waiting 40 minutes, but still barked that we hadn’t given him enough time to properly explain his views. He insisted we meet again two days later, shoehorning an hour into his schedule to show us around two of his central London sites.
Pidgley was worried that without being able to see these schemes, we would be unable to fully understand his dismay at the planning system and at accusations that housebuilders including his company, urban regeneration specialist Berkeley, are landbanking.
Housebuilders everywhere are fed up with the planning system, arguing that the politicking of local councillors is consistently delaying and blackballing the schemes they are so desperate to build. And this at a time when the new prime minister has placed housing supply at the top of his agenda.
Gordon Brown would do well to listen to Pidgley. He is the biggest name in the sector, the man all national newspapers seek to quote because of his extraordinary childhood – a Barnardo’s boy later brought up in a caravan by a gypsy family – and his extraordinary ability to predict the housing market. Then there’s his personal wealth, estimated by The Sunday Times to be £123m.
Most importantly, Pidgley won’t pull his punches, dismissing the planning white paper as something that the government has worked on “in isolation”. Will it help improve the system? “No, is my short answer.”
At the second meeting, Pidgley does not start off with a “hello”, but slams down an A4 sheet of paper on the boardroom table at his Chelsea Bridge Wharf development. It outlines his basic argument for why planning is now such a problem.
Basically, he believes the issues today are “infinitely wider and more complicated” than they were 30 or even 10 years ago. Back then, there was no concept of a section 106 agreement. In the seventies, getting permission for a housing scheme was a simple matter of what went where and what it looked like. Now, social goods such as highway infrastructure and affordable housing are being delivered through planning gain, and much the same is being suggested for energy and climate change measures.
This is coupled with the fact that 70% of houses in 2007 are being built on brownfield sites, which are often either polluted or in logistically difficult inner-city locations.
“The whole game has changed,” says Pidgley. “I don’t blame the planners. In their defence, there’s no mechanism to train them, so their understanding [of big regeneration schemes as opposed to greenfield housing] is limited and so is the developer’s – there’s only a small number of us that have built them.”
The section 106 negotiations are what particularly irk Pidgley, as shown by this typically scattergun analysis: “Why should it take us six months after a resolution to grant – which is effectively a planning permission – for a 106 to be signed? I’ve got some that go up to 12 months. Why? We’ve had the debate about it, we’ve been through due process, everybody’s had their input and they’ve had their consultation.
“Once we’ve got the resolution to grant … If the section 106 negotiations take eight months, that’s 12 months in total because you’ve got to then run a judicial review.”
Section 106s look likely to become even more muddied by the expected introduction of planning gain supplements in 2009. This would tax housebuilders on any uplift in the value of the land after permission is granted – a tax that would be difficult to determine.
What housebuilders want is certainty, which is why Pidgley advocates replacing section 106s with a roof tax. This taxes the developer per square metre of development to ensure that the infrastructure needed to service it can be fully paid for. It’s simple and avoids lengthy negotiation.
If they gave the industry the challenge of producing more units, we would rise to that. We simply haven’t got the planning or the land
Pidgley has been involved in a number of delayed schemes of late. Berkeley has owned a 4.1ha site in Honeypot Lane, Middlesex, for five years. The site has been repeatedly knocked back for development, first because it was not commercial and then for being too dense. Now scaled back to fewer than 800 homes, a decision is expected this month.
Similarly, Pidgley has been frustrated in his ambitions to build 2,500 homes at Woodberry Down in Hackney, east London: “I won that a year and a half ago and I haven’t got planning permission and I’m in partnership with the local authority!”
Pidgley believes political in-fighting is the root cause of delay to many schemes, including some of his own, as opposition parties seek to thwart the plans of governing ones in town halls. “Planning has become so political,” he sighs.
But the politicians and the civil service have long blamed housebuilders for the country’s lack of new homes. They have accused the industry of landbanking – buying up land and hoarding it. Pidgley shakes his head: “None of us are landbanking.” He points to his own figures, which show he has enough land to build more than 30,000 units. This, he says, is misleading. For example, the 30,000 includes nearly 800 at Honeypot Lane, although Berkeley is not yet permitted to build there.
He goes on: “We win a big site like Woodberry Down. As a public company we can’t keep it a secret. So in our figures we put 2,500 for Woodberry Down. If we get planning in the next 12 months, I’ll be delighted and we’ll put it into production.”
As he gesticulates at the Chelsea Bridge Wharf site behind him, Pidgley makes another point: sites such as this are too tight to build all the homes at once.
He instructs his chauffeur to drive us to his Grosvenor Waterside development on the other side of the river to illustrate his point. There would be no way enough cranes could get on either of these sites, he says, and 20-30 lorries a day supply materials as it is – any more would involve closing major roads.
“Just because you have planning on a site for 500 units doesn’t mean you can build and occupy 500 units in one year. It’s a physical impossibility.”
These arguments have not stopped the Office of Fair Trading launching a probe into housebuilding, announced last month. The agency said: “There appears to be significant consumer detriment in the form of low supply response to sustained rising prices, low levels of quality and a lack of innovation.”
Pidgley, though, welcomes the investigation.
“I hope they’re going to be thorough and that they’re going to engage with us guys – they’ve got a lot of things to understand.”
For a start, he says, they should see the reality behind the landbanking figures. And then there’s the flaws in the Royal Town Planning Institute’s claim that the top nine housebuilders have planning permission for 225,000 homes, with only 170,000 a year built by the industry as a whole …
Rather excitedly, Pidgley points out that if planning permission was sped up and more land was released as brownfield, the industry could build an extra 250,000 homes a year. “If they gave the industry the challenge of producing more units, we would rise to it. We simply haven’t got the permissions and land to come to the challenge.”
He takes one last swing at the government: “Go back 15, 20 years. The housebuilding industry used to produce 200,000 houses, give or take. The government through the public sector produced another 200,000. Now the authorities don’t produce a single house and they’ve said to the private sector side, ‘Not only have you got to up your production, you’re going to produce affordable’.”
But maybe the government really has been listening to the likes of Pidgley. Less than a week after we meet, Brown announces his intentions for the largest housebuilding programme since the seventies, saying that he will speed up planning. A quick call to Pidgley’s mobile allows him to make the following sage-like assessment: “The government has stopped talking the talk; they’ve started walking the talk.”
Next week, Katrine Sporle, head of the Planning Inspectorate, gives her views.