Knife-edge politics

Optimism about development is difficult to muster right now. A quick glance at the number of planning applications in England’s nine largest regional cities indicates that they have dropped between 7% and 30% between March and September this year. Major planning applications have fallen furthest, with a big decline in large mixed-use regeneration schemes, housing development and offices.

All this will have a serious, long-term effect on planning departments. As income falls, local government is losing experienced planning, design and engineering staff. This mirrors experience throughout the property sector, where staff at housebuilders are at skeleton levels and experienced property advisers, lawyers and designers have been laid off. This all adds up to a major loss of manpower and capacity and creates a potential skills gap for the future. When the upturn comes, we will have a hard time responding.

But is this upturn on its way? Not from where planning officers are standing. Although planning agents report more enquiries from clients and more firms buying industrial sites for redevelopment, few of these have turned into fully worked up schemes. For most planning departments, income is likely to continue to fall.

With private sector enquiries still languishing, new applications are almost all from the public sector, such as PFI schemes and education. But even this income looks shaky

With private sector enquiries still languishing, new applications are almost all from the public sector. But even this income looks shaky. All political parties are talking about spending cuts and the current level of publicly funded construction activity is unlikely to continue. One indication of the budget difficulties facing local planning authorities is this year’s Housing and Planning Delivery Grant, which has yet to be announced by the communities department – and the Conservatives say they will abolish it altogether. Revenue for the larger councils could fall by up to £3m this year.

This isn’t to say planning departments aren’t busy preparing core strategies and looking at how section 106 agreements can be renegotiated to take account of cash flow and the realities of the market. Where possible, local planning authorities are supporting bids to the Homes and Communities Agency (HCA) for Kickstart funding for residential developments. They are hard at work building the risk-sharing relationships with developers and housing associations that will be required to underpin regeneration. But only so much can be done without secure income and experienced staff.

Despite some positive signs, the economy remains delicately poised. Government decisions now will tip the balance between recovery and prolonged decline within the sector. Those decisions need to back the work of the HCA, which has a critical role to play in providing market stimulus. Oh, and as a recent speaker at the Resi09 conference implored: now is not the time to cut public spending on capital projects.