Oxford has great hopes for its rowing crew’s performance in this weekend’s Boat Race – but rival city Cambridge has the edge in housing delivery. Joey Gardiner reports on plans to boost development
This weekend sees the annual battle between the UK’s oldest university towns for supremacy on the water. In recent years the dark blues of Oxford have more often than not secured the bragging – or braying – rights, winning seven out of the last 10 races. But Oxford’s aquatic dominance has not been mirrored in the development track record of these two uncannily comparable city regions.
Both have dynamic economies boosted by strong university-linked investment and remain the only UK cities outside the capital where average house prices are comfortably above £400k – within touching distance of London. But while Cambridge City has been delivering on ambitious growth plans in its surrounding districts since the days of John Prescott’s Communities Plan, Oxford’s demand for new housing has largely remained unmet. Martin Curtis, associate director at public affairs consultant Curtin & Co, says: “Oxford is a real mirror of where Cambridge is. But there’s an argument it’s playing catch-up.”
Until now. This month the last of the Oxfordshire local authorities officially approved a central government “housing deal” funded to the tune of £215m in chancellor Philip Hammond’s autumn Budget. By accepting the cash, six Oxfordshire authorities have signed up to produce 100,000 homes in the county in the 20 years between 2011 and 2031 (see Oxford’s housing challenge in numbers), despite fierce local opposition to expansion plans. And even more development could be on the cards, given the area is at one end of the Oxford-Milton Keynes-Cambridge growth arc also backed by the chancellor’s Budget.
But actually delivering this scale of development is another matter. The £215m promised includes £150m for infrastructure to support growth. But this is just a tiny fraction – less than 2% – of the near £9bn infrastructure funding gap in the county between now and 2040. There are also concerns that the nature of both the development sites being identified and the housing deal itself could even cause development to slow.
So, what exactly is the scale of opportunity for developers, and how realistic is Oxfordshire’s 100,000-home target?
|Dark blues (Oxford)||Light blues (Cambridge)|
|Population (Source: uk population2017.com)||163,500||141,300|
|Average house price (Source: hometrack)||£425,700||£404,400|
|Housing affordability (lower quartile house prices as a multiple of lower quartile annual earnings) (Source: mhclg)||12.5x||13.8x|
|Average number of homes completed annually in last five years (Source: mhclg)||136||726|
*City council areas only
Unsurprisingly, local politicians are confident. Cherwell council leader Barry Wood says the overall deal is “realistic and based on a sound evidence base,” while Bob Price, corporate strategy and economic development board member at Oxford City council, calls the 100,000 number “realistic, necessary and achievable”. And developers are already responding. Daniel Lampard, head of the Thames Valley Office at planning consultant Lichfields, says: “There is very clear evidence the private sector is buying into this now, with a number of very big sites being promoted in local plans, so much there are competing sites coming forward.” Andrew Whitaker, planning director at the Home Builders Federation and an Oxfordshire resident calls the deal “really positive”.
But the scale of the task is enormous. Over the last five years, Oxford authorities have seen an average of 2,014 homes built per year. To meet the new target, this will have to rise by 150% to 5,000. Lichfields’ Lampard says: “The word is ‘challenging’. But at least there’s now a clear political objective, and the machinery of central and local government is starting to crank up, and the development industry is playing its part.”
In fact, just getting this level of agreement has been no small achievement. Among other similarities, Oxford and Cambridge share a structural problem of being small cities generating huge housing need but without room themselves to accommodate the growth. Traditionally, the mainly Conservative shire district councils surrounding them have been keen to preserve their green and pleasant rural setting. While Cambridge grasped this nettle over a decade ago, in Oxford co-operation on housing is a more recent phenomenon, catalysed by a strong county council and dynamic Local Economic Partnership (LEP), OxLEP. It was the LEP’s economic growth plan, which promised to create 80,000 jobs between 2011 and 2031, that led to the realisation that the area needed more ambitious housing plans.
The 100,000-home figure comes from a jointly-commissioned Strategic Housing Market Assessment (SHMA) conducted by GL Hearn in 2014, predicated on the LEP’s assessment of job growth. Key to getting acceptance for it from the shire districts was a vision of focusing the growth in a number of large urban extensions and new settlements, such as the Bicester Garden Village in Cherwell, to the north of Oxford; Didcot Garden Village in West Oxfordshire; and Culham and Chalgrove in South Oxfordshire. This series of mega-schemes meant development could remain limited in many other areas.
Persuaded by the vision, Cherwell council has already shown what can be achieved with proactive council support for big schemes in the context of an adopted local plan. Pushing forward with schemes like the Bicester Garden Village and setting up its own housing company to help deliver 1,900 self- and custom-build homes at Graven Hill has seen it more than quadruple annual housing completions in four years.
In other parts of the county, however, the authorities, while officially signed up, remain lukewarm. In 2015, West Oxfordshire attempted to get a local plan approved with lower numbers than indicated by the SHMA but was rebuffed by the planning inspector, and right now South Oxfordshire is about to attempt the same – with a draft plan due for submission in which it refuses to take on its share of Oxford city’s unmet need. South Oxfordshire’s leader John Cotton has written of “struggling with spurious SHMAs”.
This apparent lack of enthusiasm is hardly surprising, given the opposition to growth in some quarters. Anti-development coalition group Need Not Greed Oxon says the strategy “is the biggest threat to rural Oxfordshire in our history and its impact would be irreversible”, arguing that the SHMA figures have never been properly consulted on. The group is not without political support. Lib Dem MP for Oxford and Abingdon West, Layla Moran, has publicly called for a review of the plans, and has spoken in parliament of her “grave concerns” over a proposed 4,400-home development around the villages of Kidlington, Yarnton and Begbroke.
On top of this, the publication last September of the government’s standard method for assessing housing need threatened to undermine the authorities’ fragile shared commitment. While in other parts of the South-east, the standard method threw up much bigger requirements for more homes, in Oxfordshire the figure generated is actually smaller – a lot smaller – than the SHMA assessment. In fact, because it doesn’t take into account economic growth projections, it predicts a need for just 68,300 homes, rather than the 100,000 from the SHMA. Unsurprisingly, this is something that hasn’t gone unnoticed by anti-development campaigners such as Moran. Henley MP John Howell has said the proposal “establishes a balance which is currently missing” and “ends the tyranny of the current SHMA”.
Oxfordshire housing deal – what is it?
Six Oxfordshire authorities – Oxford City, Oxfordshire, Cherwell, Vale of White Horse, South Oxfordshire and West Oxfordshire – and the Oxfordshire LEP signed the housing deal. In return for them pledging to plan for 100,000 homes to 2031, the government promised:
1. Funding. The government has committed £215m to the deal, comprising: £150m paid over five years to meet local infrastructure priorities; £60m to fund affordable housing; and £5m to pay for drawing up a joint plan. Funding is to be dependent on hitting to-be-agreed delivery milestones.
2. Planning flexibilities. The government is offering to explore “options to help ensure that the existing housing land supply position is not undermined” and to “adjust the consequences of the housing delivery test.” Barton Willmore’s Knott says this is likely to mean Oxfordshire authorities will have to demonstrate just three years’ land supply rather than five to be judged to have up-to-date local plans, thus protecting them if developers appeal planning refusals.
The Housing Deal
It was in this context that Hammond in November stepped in with his £215m Housing Deal. Michael Knott, planning director in consultant Barton Willmore’s Reading office, says: “It’s not clear whether or not it was the growth deal that persuaded the authorities not to abandon the SHMA numbers – certainly it could have happened.” In fact, Cherwell’s Wood is explicit that the additional government funding was conditional on not giving up the SHMA numbers. While maintaining the high numbers are justified by the anticipated economic growth, he admits that not dropping the SHMA figures “was the price of the deal with the ministry.”
The money is certainly important for local authorities starved of cash with which to pay for much needed local infrastructure. Lichfields’ Lampard says: “After seven or eight years of austerity, the money for infrastructure is seen as a real boost.” HBF’s Whitaker says the authorities are excited about the potential for more government funding. “Things like upgrading the A34 are huge local issues,” he says. “Politicians can now sell the deal as part of getting that done. If you can sell the benefits of growth, then you can shout down the nimbys.”
There is, however, another reason why the deal may have been attractive to the area’s local authorities, one which has the potential to be a major fly in the ointment for developers. Because the deal’s small print also promises as-yet undetermined “planning flexibilities” to the authorities taking part. Barton Willmore’s Knott says this means the authorities are – ironically – seeking temporary exemptions from key government planning policies designed specifically to promote growth. The policies they are seeking exemptions from are the need to produce a viable five-year supply of development land as part of their local plans, and the incoming “housing delivery test”. The rationale for exempting local authorities is that because of the length of time it will take to bring forward the mega-sites currently being identified, they shouldn’t be expected to deliver an uplift in build rates straight away.
But, if agreed, it will mean that developers won’t be able to bring speculative sites forward as they would elsewhere when a local plan fails to provide a five-year supply of land. From developers’ perspectives this would be a major obstacle to speculative applications, but for Oxford City council’s Bob Price, such planning flexibilities would allow the authorities to develop their strategy free from “the spectre of unplanned development”.
Barton Willmore’s Knott says all this puts delivery of homes at risk. “It all seems rather counterintuitive, but housing numbers could even go down. These plans make delivery entirely reliant on these really large sites delivering homes at the expected rate.” And given that former cabinet minister Oliver Letwin is currently undertaking a review of the failure of large sites to deliver homes quickly, it is fair to say this isn’t a given. Knott adds: “You could end up with a very severe shortfall in numbers, but with the planning flexibilities potentially running till 2024, it takes away the mechanisms in the system supposed to address that.”
“The government wants housing, and the local authorities desperately want infrastructure growth, so it all makes sense”
Martin Curtis, Curtin & Co
|Oxford councils||What current plans call for annually||What the government’s standard method for assessing housing need on an annual basis says||Actual delivery - five-year annual average to 2016/17|
|Vale of White Horse||1,028||689||562|
|Total number over 20 years||100,100||68,300||40,280*|
*forecast of actual delivery is current annual average rates remain the same
The funding gap
The other big concern is over the level of funding (see Oxfordshire housing deal, facing page). The Oxford Infrastructure Strategy says a near £9bn funding gap exists, meaning the £150m in the deal addresses less than 2%. To put this money in context, the proposed upgrade to a single junction of the A34 is £100m, while widening the whole route is estimated at nearer £1bn. “The housing deal is a lot of money,” says Curtin & Co’s Curtis, “but inevitably it won’t be enough.” However, Oxford council’s Price points out the housing deal money is additional to traditional funding routes, as well as separate pots such as the Housing Infrastructure Fund, from which Oxfordshire has asked for £500m.
Whether enough or not, the authorities – with only South Oxfordshire still to get its own local plan adopted – are now moving on to the next stage: a single joint spatial plan for the whole area, running up to 2050. Given the fact the 100,000 figure has been factored in since 2014, it is in this joint plan that the impact of government’s recent commitment to the Oxford-Cambridge growth corridor is likely to be felt. Among other things, this corridor proposed a significant new settlement near Bicester, and construction of an “expressway”, which will likely open up numerous development sites along its route. Hence this document – which will take three years to produce – is the real focus of developers’ attention. Knott says: “The real excitement is beyond [the LEP plan’s target for] 2031, on the longer-term opportunities. Given the lead-in time for delivering large sites, they’ll need to be identified in this plan.”
With the chancellor last week announcing the government’s second housing deal, for the West Midlands, the model of cash and planning flexibilities in return for promises on development is likely to become a familiar one to developers. Similar such deals have already been mooted in the Thames Estuary, Greater Manchester, Leeds, and the West of England. But doubts remain over how much difference they will make. Curtis says: “The government wants housing, and the local authorities desperately want infrastructure growth, so it all makes sense. The only hesitation is how much is in the pot.” Time will tell if it’s enough to let Oxford close the development gap with its oldest rival.