Examination of Witnesses (Questions 80
- 99)
WEDNESDAY 23 JUNE 2004
COUNCILLOR DAVID
SPARKS OBE, MR
DAVID WOODS,
MR MARTIN
BACON AND
MR LEE
SEARLES
Q80 Chairman: So you think that Barker's
recommendations about the role of planning authorities—or
lack of it—threaten the sustainability of the houses that
she is recommending should be built?
Mr Sparks: It is an unnecessary
high risk factor because our experience is that a good, modern
local authority that is totally signed up to sustainability is
in an ideal situation to coordinate all the different partners
that need to be brought together to coordinate all of the activity
so that you do get a sustainable and integrated activity.
Q81 Chairman: Is one of the difficulties
from the Government's point of view that local authorities are
often seen as being obstructive and difficult and getting in the
way and making it very difficult to develop? Is that what really
lies behind Barker's thinking about the role of local authorities
in the future?
Mr Sparks: It is a difficulty
of perception. We would argue that in the majority of cases that
this is not necessarily a problem nor need it be a problem because
local authorities themselves have a vested interest in the sustainability
of their own communities.
Q82 Chairman: Broadly speaking you
are very hostile to the, as it were, marketisation of the planning
system which is what is essentially proposed.
Mr Sparks: We are hostile to anything
like that, yes. We are not going to be in favour of the reduction
in local authority powers in relation to planning.
Q83 Chairman: I take it from that
that you are equally concerned about the proposal to allocate
up to an additional 40% of land as buffer zones for future development
where building can be triggered by market mechanisms.
Mr Sparks: We are particularly
concerned about (a) the statistic of up to 40% and (b) the importance
of judging each individual situation on its merits. It depends
on the circumstances. It depends on land availability in different
areas. That is why essentially we argue that local authorities—because
of their local focus—are ideally placed as coordinators
to achieve a sustainable approach to this problem.
Q84 Chairman: What is the problem
with the 40%? Is it just too big or too blunt?
Mr Sparks: We are particularly
sensitive to any incursion into the green belt, especially given
that we have known the experience of white land, green land et
cetera, et cetera, and people's perceptions.
Q85 Chairman: Given all this and
the difficulties that you have, how are we going to increase the
supply of affordable housing which I think everybody agrees needs
to be done? What plans do you have for that?
Mr Sparks: I have two of my colleagues
here at the sharp end and that is why they are here.
Mr Woods: Can I just say something
about an aspect that I think Barker has overlooked? That is about
the opportunity to use windfall sites and to densify existing
town centres, particularly in the south east of England, and to
take in with that the possibility of regenerating some of the
sites that Councillor Sparks talked about earlier, some of the
60's and 70's estates that need regenerating in town centres,
and housing that needs to be brought up to decent home standards—whether
it is private sector or public sector—could be included
in these regeneration schemes. I think it is often overlooked
that something like 50% of new housing starts in London are on
windfall land and infill land. Most of that is not on anybody's
capacity study so it is not planned for in the type of review
that Barker has done. I think there is a real opportunity being
missed here to build out from areas like the Thames Gateway and
to build out from town centres where community and physical infrastructure
is already there; to maximise land values, increase sustainability
and diversity in communities and if we could somehow capture those
increased values and reinvest them in new areas like the Thames
Gateway that might be a different approach.
Mr Bacon: I am the Managing Director
of the Core Delivery Team for Ashford's Future and under the sustainable
community's plan we have to provide for 31,000 houses, 28,000
jobs for the next 30 odd years. We see it as trying to make the
planning machinery and the money machine work together. We see
that as being very important. As we are preparing our master plan—that
will be available at the end of this year—we are looking
at the financing of this whole development. We have calculated
that the cost of providing the infrastructure to sustain that
level of growth will be something like £1.15 billion. Then
we have looked at the way it might be financed and we have found
that half of that money can probably come from what might be called
mainstream funding: grants from governments, utilities companies
and so on and so forth, those sort of usual funding streams that
one finds. The remainder of the balance can probably come from
the private sector. In Ashford we currently collect about £12,000
per house through the Section 106 system and we think with a modest
increase on that—we are looking at that figure and discussing
it with local land owners and house builders—probably £15,000
or £16,000 could provide the bulk of the rest of the money.
There will probably be a small gap and we think that might be
made up through the Government allowing us to keep perhaps 1%
of stamp duty through the period of the growth plan. All of that
can be done within the existing legislation. It is a question
of doing the financial calculations at the same time as one does
the master planning.
Q86 Chairman: Before you go on, I
am unclear about what the £15,000 or £16,000 refers
to.
Mr Bacon: Basically when planning
permission is granted, if there are barriers in the way to the
granting of that permission, then the developer may contribute
sums of money to making sure that permission can be granted. For
example, the classic thing is roads or sewers and so on, so they
make a contribution to that infrastructure through the planning
process.
Q87 Chairman: You are talking about
an additional £15,000 to £16,000 per house.
Mr Bacon: No. We currently collect
around £12,000 and we think that figure might rise to about
£15,000 to £16,000 per house.
Q88 Chairman: My original question
was about affordable housing; I do not want to talk about putting
prices up.
Mr Bacon: I am coming on to that.
We do think the roof tax would need to apply to affordable housing
to make those calculations work, but we are doing our master plan
on the basis of the regional planning guide, that 30% of that
housing—the 31,000—would be affordable.
Q89 Joan Walley: Could you just clarify
for me the difference between what you referred to as a roof tax
and Section 106.
Mr Bacon: As I said, we collect
through Section 106 £12,000 a year. What we are suggesting
is that if we collected something in the order of £15,000
to £16,000 we could actually meet the infrastructure bill
on top of the mainstream funding plus the stamp duty I referred
to. We would regard that as an infrastructure tariff for the plan.
What we want to see is an infrastructure tariff charged on the
big issues—the big sewers, the big roads, the big schools
and so on—and then have a separate Section 106 for site
specific issues that are well-defined within the site or adjacent
to the site. We think the advantage of that for the development
industry is that they would know that the infrastructure was being
paid for; it would come through and be locally determined and
so on. The point I was going on to make is that for us the problem
is that we do not think it is a problem for the development industry
to finance this, it is the timing of the finance. The developer
cannot make that contribution—whether it is a local land
tax or a roof tax—until they have sold their houses, and
yet the infrastructure needs to be provided. What we need is finance
up front to be provided to pay for that infrastructure so that
what can happen downstream is that the developers can make their
contribution towards that infrastructure later on. What we are
looking at is seeing whether we could establish an infrastructure
company as a public/private partnership with the board in which
the infrastructure company puts up perhaps 10% of the cost of
the infrastructure up front and they roll it through. The risk
on provision of the infrastructure would be with that company.
We feel that can work within the existing legislation provided
the Government maintains a whole emphasis on sustainability community
plans, on providing infrastructure and quality at the same time;
that we do have proper mechanisms to marshal the mainstream funding;
we have support for this infrastructure tariff I referred to and
perhaps we could have a modest increase from the stamp duty towards
those costs. We think then we could make a package to make that
work. The whole affordable housing, the whole of the agenda, could
be made to work within the existing legislation.
Q90 Joan Walley: Just following that
up, what you are suggesting therefore assumes that the mainstream
money that would be coming through from the regional development
agencies or whoever and through the regeneration zone spending
would need to be attuned at this stage in order for that up-front
investment that you were talking about for the infrastructure
to be there. What indication is there that that is there, that
that would be forthcoming?
Mr Bacon: I think the Government
wants to try to marshal its mainstream funding to provide the
necessary infrastructure at the right time. What we are doing
is, as I said, during our master planning process, calculating
the bits of infrastructure we would need, costing them, looking
at when they would come over time. Then we would be going to the
Government and saying, "This is the profile for this expenditure
over 30 years, can we enter a public service agreement between
the board and the agencies on the board with yourself to provide
that funding at the time required so that we can assure the development
industry who are making these contributions that it will be on
time?" If we can do that deal, then we feel that would provide
the infrastructure at the right time, when the local people want
it, the newcomers want it and when the house builders want it.
Q91 Joan Walley: Is that conditional
upon getting permission from ODPM for that to happen, in order
that you get the things in sync?
Mr Bacon: Obviously they would
not have to object to the local development framework that we
are proposing and we require them to support—or the Government
to support—the infrastructure tariff I referred to.
Q92 Mr Francois: On the point you
were making about Section 106 agreements, the slightly alternative
approach that you are talking about is interesting because my
own experience of Section 106 is that they always tend to be weighted
very heavily in favour of the developer. The houses tend to get
built first; sometimes you get the infrastructure, sometimes you
do not. The developers usually have extremely experienced teams
of lawyers who use very artful wording when the agreements are
drawn up. They appear to make a commitment and then when you actually
get a few years down the line they then argue that market conditions
have changed and therefore they cannot always provide exactly
what you thought you were going to get. My experience to date
is that Section 106 agreements normally work in favour of the
developer rather than the community. Also, local government is
often at fault because it does not ask for nearly enough. The
developer makes a massive profit and the local community gets
a relatively small payback for that. Are those factors anything
that outline the alternative approach that you seem to be putting
forward?
Mr Bacon: Yes, they are. What
we are saying is that you must do that calculation up front when
you do the master plan so that you can establish the true cost
throughout the period of the plan and you can then make that clear
to local people and everybody understands; all the land transactions
that go on from that recognise that fact right up front. The second
point about Section 106 is that reform is needed; I think the
LGA and the private sector want a reform. What we are suggesting
is to do a two-bit approach: to have an infrastructure tariff
and a very specified Section 106. Talking to the land owners and
most of the developers in Ashford, they feel that they would like
that because it would take out all the hassle in the planning
process about which land owner goes first, who contributes what
to what score, et cetera, et cetera. It should make it a lot easier
for the planning authority to deliver what it needs to deliver
and to work with the private sector; we need to work with the
private sector to deliver this agenda.
Q93 Chairman: Is there anything in
the Barker review that you actually welcome?
Mr Searles: We did welcome the
recognition by Barker—certainly in the interim report and
it was carried through to the final report—of the sharpness
of the impacts that certainly local development creates, the sort
of development that happens in every local authority up and down
the country and how local authorities are often unable to demonstrate
to the local community that they or the developers will meet those
impacts. It comes back to the point made about Section 106. The
Section 106 negotiations are often tortuous; local authorities
do not often secure from them what they need and then they do
not arrive. The local community see them as either selling or
buying permission, depending on which perspective you are from.
The whole atmosphere is a poisonous one in many communities when
all they see resulting from new housing developments are increases
in congested roads, crowded surgeries, over-subscribed schools
and what have you.
Q94 Chairman: A familiar story.
Mr Searles: We welcome the Barker
review from that point of view. She said it was perfectly understandable
that many communities take a cautious approach in that circumstance.
We have taken from that a cue to try to raise debate about the
issue of how we pay locally for the impacts that arise from development
in order that we, as community leaders—local authorities
acting as community leaders—can better sell the benefits
that development can bring. After all, those houses may well house
the key workers we need; they may house the doctors, the nurses,
the policemen and all the other businesses we need to service
with new housing. We do not have a position precisely on what
changes need to take place, but we are firmly of the belief that
that debate is needed about providing sources of income for local
government to be able to better demonstrate that those impacts
can be met at the time the developments arise or at the time the
plans are made. That argues in favour perhaps of the planning
supplement that is being proposed although we do not yet have
a firm position on that; or other form of land taxes or indeed
different distributional mechanisms. We are engaging in debate
and that is all we can really say about that and we have postulated
a few mechanisms that might be used.
Mr Sparks: I understand we have
sent you a document, a specific discreet document to take the
debate further in terms of finance.
Chairman: We look forward to reading
it. I am getting a little anxious about time; we have had quite
long answers. I appreciate these are not easy issues, but if you
could try to keep your answers as snappy as possible I think we
would all be helped.
Q95 Sue Doughty: I would like to
turn to sustainable communities and the Sustainable Communities
Plan. We have the Government focussing its efforts in the south
east as part of the plan but there are, within that, implications
not only for the south east but for other parts of the country,
particularly when you are looking at Barker's views that housing
should be built where there is the greatest demand. What are your
views on this because you are from differing parts of the country,
not just the south east?
Mr Sparks: It cannot just stop
at the south east. There are tensions within local government
in relation to this particular question. As a West Midlands councillor
I would be crucified back in the West Midlands if I did not say
that the West Midlands authorities are less than happy with some
aspects of the growth proposals in relation to Milton Keynes.
Equally, there are huge questions about the emphasis on a massive
amount of investment in the south of the country at a time when
you have major problems in the northern regions. I think that
is something that needs to be taken into account.
Mr Bacon: In relation to east
Kent, east Kent has had a major problem of getting quality
development, meeting housing demand, getting jobs and so on and
so forth for many years. I think at Ashford we see the opportunity
through the Sustainable Communities Plan to use that growth to
mend the settlement as it currently stands and also to grow it
and improve it and make it a really outstanding settlement. All
I would say is that within the south east it is not one blanket
uniform area of prosperity; it has areas and pockets where this
growth opportunity can be used to help to resolve existing problems.
Mr Woods: Can I just add to that
that in the Thames Gateway I think there is a very real danger
that the current strategy in the Communities Plan which started
off with the Treasury model of envisaging about 50,000 or 60,000
new homes would produce exactly the kinds of problems that Councillor
Sparks talked about before: poor infrastructure, low community
facilities, relatively low density, high environmental impact
or low environmental sustainability. Some work which the housing
directors in east London have had done with the LSE recently and
is just about to be published shows very clearly that if we take
a longer term strategy to developing the Thames Gateway—perhaps
up to 2030—at higher density with infrastructure development
up front something like 120,000 to 150,000 new homes could be
created with much higher environmental standards—aiming
for standards like carbon neutral and so on, a much higher quality
design—and the way to do that is to build out now from town
centres with the existing infrastructure which I referred to earlier
and to take a more measured view about what can be delivered over
the next fifteen or twenty years. I would be very happy to let
you have a copy of the draft work on that, if you would like that.
Q96 Chairman: We would very much
like that.
Mr Woods: I think it would be
very helpful. The second thing I would say is that the same principle
applies really in the south Midlands and elsewhere. On the same
basis, why would you not consider expanding and developing in
Birmingham rather than building in Milton Keynes? In a presentation
that Anne Powers from the LSE did recently she said, "Look
at the Virgin timetable. From September it will be quicker to
get from London to Birmingham than it will to get across London
or out to Milton Keynes".
Q97 Chairman: I will believe that
when I see it.
Mr Woods: I think it is the same
sort of principle. Start with the existing areas, move out, take
a more measured view and you will get more of the infrastructure
funded through the private sector. However, I will stop that answer
and give you the documents.
Q98 Sue Doughty: I had planned to
ask if the Sustainability Communities been a good thing for the
areas that you represent and yet outside of Ashford I am beginning
to get the feeling that you are not seeing it as a good thing.
Mr Sparks: I think it is fundamentally
a good idea; at least it is a recognition that there is a problem;
there is a massive problem and something has to be done. In fairness,
in relation to the point I made about the West Midlands, the argument
from some local authorities within the West Midlands about growth
in Milton Keynes affecting their boundaries is equally applicable
within the West Midlands region. If you are talking about Stoke-on-Trent
or you are talking about the Black Country, they will not necessarily
benefit from some growth proposals within the West Midlands region.
I think that what needs to happen is that we need to have a far
more balanced approach to this particular problem and we must
learn from history. It is ridiculous. One of the big problems
about what we are faced with as local authorities at the moment
is that you have a whole raft of initiatives that seem to have
been invented by policy makers who have never really even looked
at the 60's or 70's, never mind anything earlier. Many of us have
been around long enough to know that we can create nightmares
if we are not careful. We are in danger here of creating bigger
problems than we have ever had before.
Mr Bacon: The agenda has two parts
to it: one is a housing agenda and the second one is very much
a radical, different approach to how we actually plan settlements.
I think we must not confuse the two. It is the housing agenda
and all the concerns about building trash and going too fast,
which cause most concern, but I think everyone welcomes the second
part of the agenda which is the housing plus agenda which is about
getting jobs where houses are, which is providing proper infrastructure,
which is looking at the whole issue of community development and
above all can we make our whole settlements more sustainable than
they have been. I think everybody welcomes that. It is that "plus"
part which other government departments—particularly Transport—are
not yet actually really tuned into. It is a question for the Government
to get its soldiers in a line over the next couple of years to
ensure that that "plus" part is actually brought into
being.
Q99 Sue Doughty: Having said that
about some of the development side of it being welcome, do you
actually agree that the Sustainable Communities Plan is compatible
with sustainable development?
Mr Woods: I think without a guarantee
of the infrastructure being funded and sensible phasing of the
infrastructure, it is impossible to guarantee that it will produce
sustainable development. I think there was a select committee
a year ago that described the infrastructure costs as £20
billion for the Thames Gateway; at the moment we have £446
million plus whatever is in a few other pots. There are two ways
of looking at that: one is to look at it from the view that ODPM
have created a number of pots without many rules so that they
can respond flexibly and innovatively wherever that will work.
A different way of saying it is that there is not a joined-up
plan; they want to put houses up quickly and cheaply and creating
a number of pots will splash some colour in the Gateway over the
next five to 10 years but will not do much more.
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