Select Committee on Environmental Audit Minutes of Evidence

Examination of Witnesses (Questions 1 - 19)



  Q1  Chairman: Good afternoon, Dr Ellis. I am sorry we have kept you waiting. Thank you very much for the substantial memorandum which you sent in, for which we are grateful. We have looked at that memorandum, and it is clear that you are not happy with several important aspects of the Barker Review. One of the issues you raised is that the review is based uncritically on the "Treasury's macroeconomic idea of a `golden arc' of growth" in the South East. Can you elaborate a little bit about why you disapprove of the "golden arc of growth" and the emphasis that the Treasury has placed on that?

  Dr Ellis: Yes, I can. There has always been, in planning terms, since the last war a major structural inequality in the nation in terms of economic growth performance, and that has had huge implications for social justice and for the environment. The issue has come to the fore now again simply because the Treasury "golden arc" model is a simplistic idea that says essentially that the broader South East is our economic driver, vital to ensuring our economic competitiveness in the global economy. All of this, of course, is fine but it begs important questions about environmental quality in the South East and how that is to be sustained, and about quality of life. Essentially, it delivers a vision of the nation which has a North in "managed decline", which is a phrase which has been used more and more in government policy, and a vision of the South of "uncontrolled development", and Barker is, I suppose, the final expression of that policy initiative. Ultimately, neither economically, socially nor environmentally can that kind of policy be sustained, and in fact I would go further to say that although the nation faces many issues of sustainable development and challenges, there is no greater issue in spatial terms than that regional inequality. Unless we can sort it out, the environmental and social costs for the South in terms of congestion will be overwhelming. I do think, reading Barker, that in relation to urban policy, the effective acknowledgement of the abandonment of some communities which "no longer have an economic purpose" is a price too high to pay in every possible terms: politically, socially and environmentally. The fact that the Treasury persists with that model, despite those other issues, makes it very difficult to plan strategically for sustainable development, I think.

  Q2  Chairman: There is also in Barker a reference to unused open space having little social value, which is the flipside of what you have been saying. Do you have thoughts on that?

  Dr Ellis: I think underpinning Barker is a view that planning is no more than opportunity cost of land and that all decisions can be boiled down essentially to that cost/benefit question. One of the grave drawbacks of Barker is that it is a report that does not understand planning history, nor the planning system. That kind of cost/benefit analysis was tried in the Sixties with the third London airport, for example, and actually the nuclear programme, and what people discovered was that it is impossible to place those kinds of costs on land, because planning is a complex process of community, political, environmental, social and economic views, that have to be discussed, mediated and traded off. Putting those values on land is essentially meaningless. It does not help us in policy terms to make good decisions.

  Q3  Chairman: I am a South East Member of Parliament, and it will not surprise you to know that your approach finds a lot of resonance with my constituents. But is there not a case for looking more closely at the economic argument? Is there not something of merit in the idea that you knock down houses where people do not want to live and maybe create some kind of environmental improvement as a result, and build houses where they do want to live?

  Dr Ellis: The planning system has always been sensitive to those economic pressures broadly. I think Barker has two layers of implications which are very negative. One: as a nation, are we willing to accept what is in the Communities Plan about the Pathfinder renewal project? We can take an urban area in Liverpool or Newcastle, demolish high-density, terraced, poor property and redevelop at low density, and we end up still with a community, but there is a logic beyond that, a macro logic in Barker, that says that when the economic purpose of communities no longer exists, managed decline is what we will do. My question is: what is the limit of managed decline for the North? Not only is the logic of Barker that we do not plan, because it is a price-sensitive issue, but that that decline will be prolonged. It will not be a question of five to ten years; it will follow the structure of the golden arc and be prolonged. All I can express is that, in relation to the examples of the decline of coalfields, for example, I think it is unacceptable to say to a community, "Since your economic purpose has been removed, your social purpose is also removed." In some ways, that is a point way beyond environment, and goes to the heart of how we organise our nation. In relation to the South East, the flipside of that is: how much land do you think you can identify for how long for this growth to continue? What is the limit of growth? That is a question which neither Barker nor the Communities Plan nor the Government is willing to answer, and it is a very difficult question, and fundamental. The second tier in Barker which I think is important is this issue of price sensitivity. Barker is suggesting that we do not plan. While the Barker team has said many things after the report to say "We should have thought more about the environment," the essential implication of a price-sensitive planning system is that we release land over and above need in areas of high demand, 40% more than need in areas of high demand. That means we concentrate development in the South East. That is the net effect of that. Remembering that the Local Plan process now is a three-year review process, so we go on allocating 40% more land on a three-year cycle. Where does that leave us? Ultimately, where does it leave the North? The report says we will not use this mechanism in the North because there is relatively lower demand there. That is a recipe for regional inequalities on a hitherto unseen scale, not really since the 1930s, before we had planning. I think on all of those levels we as a nation have to be able to strategically plan so that the communities in the North have a future, so that the communities in the South have sustainable development in a way which upholds quality of life. That means biting the bullet and saying we need a national spatial framework which in part is redistributive, which is, again, a very hard question.

  Q4  Joan Walley: The Chairman is an MP for the South East; I am an MP from north of Watford. I would just like to ask you about the strategic approach and whether or not, turning it the other way round, you see the prospect or the opportunities for the Treasury, having commissioned the Lyons report jointly with ODPM, as a means of kick-starting economic growth in areas where the economic basis of those communities may already have disappeared. How do you see that linking to this wider spatial issue about planning and the contents of the Barker report?

  Dr Ellis: I think the content of the Lyons report is very positive. In fact, it takes us back, it seems to me, to perhaps where we were in the 1960s, when the last big decentralisation of public services took place. This is a very crude generalisation, but some communities really would not be there if it had not been for that decentralisation of public services, such as Vehicle Licensing, for example. That decentralisation can be very positive, and it provides, I suppose, an economic purpose for these communities. I think decentralisation is very positive. The question, of course, comes when you move from public to private sector and how that is to be achieved. That is the hard question. I think decentralisation of public services should be seen as part of the national strategic framework, certainly for England, as we stand at the moment. I do not think Barker fits into that. Barker is working in the opposite direction.

  Q5  Joan Walley: That was my point. Could there not be an opportunity for the objectives of both to be reinforcing each other in an ideal world? Should that not be what is happening?

  Dr Ellis: In an ideal world. I think at the present they cross on the train at Watford, in the sense that Barker is opening the gates for unrestrained growth in the South East, and Lyons is attempting to say that we can restore administrative purpose and social and economic purpose to communities in the North. There is a myth going round that the regional policy in the Sixties and Seventies was a complete failure in this country and the attempt to redress the structural imbalance was a disaster. I do not accept that. Much of the regional policy did give communities in the North effective purpose for some time, but if you turn the tap off in 1982-83, then you live with the consequences of no regional policy for 20 years, and that has caused a tremendous amount of damage. I think Barker is a distraction from the Lyons Review; it is a distraction ultimately actually from the Communities Plan and other major initiatives because of the simplicity with which it approaches the problem.

  Q6  Mr Challen: In your critique of Barker's reforms, you have said that "they question the core principles of democratic planning" but is it not really the case that, at the local level at least, planning decisions are a complete mystery to most people? I represent a seat in the south of Leeds, the golden arc around the south of Leeds, I have to say, and we have had a Unitary Development Plan recently adopted, last year. It took 10-12 years for that plan to come to fruition, and it reflects previous plans, and only the planning anoraks really understand what the process is and where it is at. Would it not make a lot of sense for some of these so-called democratic principles to be looked at very seriously?

  Dr Ellis: I see no problem at all in making planning efficient and open and participative. In fact, probably in the last two years of my work with ODPM, the planning system has come into disrepute because of delay and complexity, and you are absolutely right that it is a mystery to a lot of communities, but I do not think that is a reason to dismantle the core principles in the way that Barker is suggesting. I think that is a different question. Making planning accessible is about making anoraks like me speak in normal language, and making the system easy, with real opportunities to participate in meaningful ways. I think we can make plans more related to community needs by engaging communities more, but at the end of the day, local politicians are the absolute safeguard of public accountability. That is their core function, and if you take them out of the system, you are left with a major problem about who decides what the public interest is for the south of Leeds or the South East in general. Who is going to decide that?

  Q7  Mr Challen: I was trying to bottom that question of accountability really in my first question, whether there was any accountability as such in this UDP process that I have mentioned. The policy that everybody wanted actually was what John Prescott announced in PPG3, protecting greenbelt, and as a consequence of that national decision, a lot of local land in my constituency was returned to the green belt, I think against the wishes of many local politicians or their offices, more to the point. So where is the accountability?

  Dr Ellis: I can see the point. It is a very complex question, because there are layers of it. Clearly, central government retains very directive powers on planning in relation to the way that it can or cannot endorse a plan or set policy. In some ways, that question, which does need sorting out, is in my mind separate to what Barker is talking about. Barker is saying "Let's make planning non-planning; let's make it price-sensitive." The system is imperfect at the moment. There is no doubt about that, but at least you can object, at least you can have your say, at least you can talk to a local councillor, and ultimately at least you can lobby at higher levels on planning issues, but if you take up Barker's suggestion by saying that we start to locate and release and decide the amounts of land purely on price, how will communities respond to that? They are essentially being told "Your needs are the same as price." If we get to that position in planning, which is essentially the heart of Barker, we have put ourselves back 40 years, and we have said that sustainable development amounts to no more than speculative desire for land prices. I would say that the track of making planning more accountable to the local level, which is the subject of an ODPM publication that came with PPS1 on community involvement in planning—that paper was very good and contained a lot of material that helped address those questions, but I think it is separate from stripping away those principles altogether. We should be trying to make them work rather than removing them.

  Q8  Mr Challen: Some people hold to the view that markets are the most democratic things ever. An estate agent who says, "Location, location, location" is simply describing a democratic process whereby people choose where they want to live, and it just happens that a lot of people want to live in the same place and therefore the price goes up. I am being the devil's advocate to a certain extent, but surely you see some merit in that argument.

  Dr Ellis: Am I allowed to say no? No, for two reasons. Firstly, price is not a function of need. Price is the result of, for example, people buying to let or speculating in land, or not bringing forth housing units on land they have planning permission for and therefore increasing unit prices and therefore increasing land prices. Social need is what planning deals with. In a funny way, I think that planning has always tried to say, "How many houses do we need in an area? Let's plan for that." It has never tried to say, "Let's not try and plan for need." If we wanted to change the nature of need, that would be fine, but let us be clear: that is not what Barker is suggesting. Barker is suggesting "Let's have need and then let's have price sensitive on top of need, over and above that." What is so frustrating about Barker in relation to the social justice question is that the report is written about stabilising house price inflation and says virtually nothing new about social housing need, certainly nothing new that is meaningful, and that is an important question. I would say one thing more on price, just because it could be the end of all anoraks. If we accept that price is the core and only determinant of social welfare, there is no logical basis for a planning system, which is why Barker is so damaging. Barker may not want to think that she has had that implication but the implication is absolutely clear in the report.

  Q9  Mr Challen: In the context of simplifying the planning system, have you found anything of benefit in her report?

  Dr Ellis: On balance, you could only say that of her discussion of some fiscal change to the way that planning operates in relation to betterment tax and land tax. Some of that is useful. Nothing else in the recommendations has any merit as far as I am concerned because it would be so damaging to the nature of the existing system and so contrary to the ideas of delivering sustainable development.

  Q10  Mr Challen: Do Friends of the Earth propose a system which would ensure that there was a good supply of affordable housing in the right locations?

  Dr Ellis: We would begin by admitting, as we have indeed admitted in front of this Committee before, I think, that our sector has not been as socially responsible as it needs to be on social housing need. We would go on from there to say that social housing need should be met everywhere, and there is no question about that. What we argue with is whether general demand should be met everywhere at all times. The real issue about delivering social needs housing is that at the moment it is delivered very inefficiently through cross-subsidies from the private sector, through s106 obligations, squeezing affordable housing out of units of housing of higher value. If you want to deliver social housing, it is very simple: you have to pay for it. It is a financing issue, not a planning issue, that is restricting the development of social housing. When local authorities controlled social housing, it was integrated into the planning system. Land was purchased and houses delivered and paid for by the state. In sustainable development terms, in terms of land use, that is the most effective way of delivering social housing. Our view actually is an old-fashioned one, which is that we should return, not solely but largely, to meeting social needs housing out of public investment. The private sector may have a role to play in that. The management of social housing had to change, and in our view that was the flaw in it for many years.

  Q11  Mr Challen: It would be a return to council housing?

  Dr Ellis: It would be a return to the provision of housing by local authorities, but the management of housing in a much more effective and participative way by tenants. That is as far as we have got with the debate, but what we are absolutely sure of is that you cannot efficiently deliver social housing in the South East by saying to the private sector "Please provide 10 units out of 100", because the amount of land you have to allocate to effectively deliver social housing goes up and up because you are only getting a small proportion of cross-subsidy in any one go.

  Q12  Mr Thomas: We know that we live in a very unequal country where regional inequalities are greater than they have been at any stage since the Second World War. We can see the underlying problems with that, but in the answer you just gave to Mr Challen you suggested that we can deal with social housing, but that surely does leave a large number of people chasing after scarce housing in the South East—nurses, teachers, whoever—who would not traditionally have been thought of as people in need of social housing, who are tied into the economic system, who have to be here. You may want to change that system in order that they do not have to be here in 20 years' time, but they are now, and we are also facing this huge problem of affordability. A report came out today again underlining that gap of affordability. Surely there has to be some prescription that meets private housing demand as well. That is what Barker tries to do, albeit she has failed in your opinion. I do not think it is enough to rely on social housing.

  Dr Ellis: No, it is not, and I do not think that we are arguing that we would not build in the South East. What we are saying is that the scale of development that Barker envisages is not sustainable in all sorts of terms. We have a planning process which we can define need through, and that is what we have been doing for 60 years, but the reason that that has stopped working is because we go back to the golden arc problem. I know what you are saying; it is inadequate for me to say "Let's solve the golden arc, but what do people do now?" and I am not sure I have a full answer for you. Ultimately, the answer is that unless we get a grip on moving the drive to that demand out of the South East, then nurses, doctors, police officers, will be confronted with that problem, an unintended consequence, if you like, of a Treasury macroeconomic idea.

  Q13  Mr Thomas: What about the environmental argument about what tends to happen now—and I am not a South East MP, obviously—people who are actually commuting great distances, having an environmental impact in having to live 100 miles from London and trying to do their jobs in that way? That has to come into the picture as well, does it not?

  Dr Ellis: It does. It is a complex picture, but again, on balance, it would be more sustainable and better if there were a more even pattern of development so those commuting distances did not have to take place. The solution cannot always be that we simply accommodate all that growth as a result of that commuting pattern in the South East. This is a classic wicked planning problem, in which it is difficult to see where the winners are, but we return to that central point that all of these are unintended consequences of that model. We have to deal with those drivers, and we probably have to deal with them urgently, in relation to making sure that we decentralise economic activity in a way which is fairer for the nation and relieves those pressures.

  Q14  Joan Walley: You have been quite scathing in some of the comments that you have made. I just wonder whether or not you would look at the outcome of the Barker report or at the remit that the Treasury gave for the Barker report. Do you   think there was a sufficient sustainable development brief from the Treasury in the first instance, or do you see it as wholly and solely arising out of the actual report that Barker made?

  Dr Ellis: There are a couple of points there. Kate Barker has said since that the remit was very tight, to discuss a particular defined issue about house price inflation and housing supply in a particular area. My comment on that would be that her remit was tight, but she strayed from it in other areas to an incredible extent, particularly in questioning the democratic basis of planning, which did not cause the review team any problem. The issue of whether or not the remit was set in the first place in the place it should have been—Barker is in a long line of  Treasury-inspired reports, beginning with McKinsey, which are anti-planning, that see planning as a brake to economic competitiveness, and that misunderstand the fact that it is trying to do a very complicated social, economic and environmental process. You could take a step back even from there and again, speaking with my anorak firmly on, we approached the regional issue of over-development in the South East through the Communities Plan before we had ever decided what the environmental limits of the South East were. The Defra report only arrived two years after that point. So the process of strategic planning for England has been to accept large-scale growth in the South East as a political decision, then to begin to implement that in all sorts of ways, then to commission an economic study from the Treasury on Barker, which in fact doubles that growth, and then Defra come along very belatedly and say that there might be one or two problems with that. Then at the very end we might actually begin to think about how transport infrastructure and various other things, which should have been central to the planning process, might only be delivered years after. Can I say that that is not in any way how we should have approached the strategic planning of England or the UK in any shape or form. What should have happened is that the principles of the Sustainable Development Strategy should have guided the process where those Departments worked together collectively to deliver a plan that was much more balanced and much more strategic.

  Q15  Joan Walley: I think we will come on to some of those points in a minute, but just before we do, you say in your evidence that the building industry has been let off the hook by Barker. I am not quite sure why you reached that conclusion.

  Dr Ellis: I think the interim report, in tone at least, was quite a lot more critical of the building industry than the final report. For example, in the interim report, in my reading of it, there was a more balanced view that planning was one element of the difficulty, but the industry bringing forward development at the right place, delivering the right kind of units, was also an issue. What has happened in Barker, perhaps leaving tax aside for the moment, is that the final set of recommendations—there are so many I just describe them as the ones in their late 30s—are essentially a voluntarist approach to persuading the industry to do what would be desirable, and unlike the planning system, where major reforms, radical reforms, are suggested, there is no such radicalism in relation to the building industry. Essentially, we are still left with the problem of how to encourage an industry which has skills shortages, which has some degree of interest in not building low-cost units—it has an interest in delivering units at the highest profitable value to themselves, and that is not always socially desirable.

  Q16  Joan Walley: So are you saying that someone got at the report between the interim and the final? Do you think there was intensive lobbying on that?

  Dr Ellis: I am afraid to say Friends of the Earth have no effective conspiracy theory to offer you. All I can say is I find it very surprising that the tone of the report changed so that the emphasis of the report was largely aimed in recommendation terms on nailing the planning system and a much more voluntarist approach in relation to the industry. It may well be, of course, that it is simply easier to nail up the planning system in relation to recommendations than to deal with the private sector building industry.

  Q17  Joan Walley: Do you agree with the view of the Barker report that it is not a problem to have stock market listed developers with landbanks from 2.8 to 6.8 years before that land is released for development? Do you think that is a problem or not?

  Dr Ellis: I believe it is a problem.

  Q18  Joan Walley: Why do you believe it is a problem?

  Dr Ellis: Essentially, it has to do with motivation. The industry's desires and motivations do not coincide with the public interest all of the time, particularly in relation to the release of land when it is most needed. At the moment we have a housing crisis in terms of delivery. There is land with granted planning permission out there. The question is why could that not be delivered? In relation to the control of that land, we have to find a way of drawing the private sector much more into decisions about the numbers of houses and where they are built than they are at the moment. Essentially, they can get permission for land for a considerable amount of time and sit on it, despite social need.

  Q19  Joan Walley: Will private developers release or build affordable homes unless there is some element of compulsion?

  Dr Ellis: No, they will not, and I think that is why we are more and more convinced that the public sector should do that job. If the public sector were to take a stronger role in delivering social housing, these problems would not be anything like as severe. It would also, of course, have a positive effect on house price inflation.

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