Examination of Witnesses (Questions 246
- 259)
WEDNESDAY 7 JULY 2004
MS TRISHA
GUPTA AND
MR JOHN
OLDHAM
Q246 Chairman: Thank you very much
indeed and thank you for your patience. I am sorry that previous
session overran a bit so we are starting a little bit later than
we wanted to. We are very grateful to you for coming in and for
giving evidence to us. Could you just give us a brief sort of
thumbnail sketch of your view of the Barker report?
Mr Oldham: If I may start, Chairman.
There is much to commend the report and one of the areas we are
particularly keen on are some of the recommendations for trying
to speed up the planning system. One of the things we feel at
times we are engaged with is the planning process not actually
delivering.[6]
Barker in her report suggests the idea of an urban design code
process through local development orders. If that process could
be moved on, I am sure it actually may speed up the reserved matter
planning process. Why we are particularly keen on that, for example,
recently we promoted a scheme for about 400 homes in Cambridge
and it took us two years, on a brown field site on government
land, to go through the community engagement process because local
people did not like the idea of traffic generation. So Barker
is trying to actually introduce quality. I think that is one area.
One area I think we are particularly concerned about though is
this idea of some form of supplemental planning charge, ie planning-gain
supplement. In the report there is an idea of reducing contributions
with section 106 and making it up through the supplemental planning
charge. It seems to us that on three separate occasions this has
been tried since the Second World War in some form of development
land tax and therefore this is not a new idea coming in. But our
experience in building new sustainable communities is that the
section 106 mechanism has worked exceedingly well, albeit today
it may be refined, and it may be refined, again drawing on the
Cambridge experience, in terms of looking at strategic 106 contributions
so you are looking at a wider contribution maybe towards wider
transportation elements, and then site-specific 106 contributions
which may relate directly to affordable housing by way of example
on the site. So there are two examples. As you know, there are
many, many recommendations. For example, we are very interested
in what will happen with revisions to PPG3, for example, on housing,
which Barker puts out in her report as well, but we are going
to have to wait some time for that. Those are two areas. There
is a Ying and Yang approach to it really.
Q247 Chairman: Could you comment
on her opinion that the use of land banks by developers has a
minimal impact on housing supply.
Mr Oldham: I think it is how you
understand land banking. We identify as a company the land that
we have under control, which is controlled by option agreements,
and I think in her interim review she goes through the house building
process and looks at how industry tries to secure control of land.
That may be the case, but the way we land bank is to secure planning
permission and the land often is without planning permission.
We are actually going through the planning process to secure planning
permission. So land banking is a process in which in terms of
large schemes for sustainable new communities it is an essential
process for us because we have to identify land often before the
local authorities identify that land. So we go through the process.
Previously we went through the structure plan process and then
local plans. These days we will be going through regional planning
guidance or RSSs and then through the LDF process. So it is long
term identification of land.
Q248 Chairman: You have got, I think
I am right in saying, 5,400 homes' worth of land in your land
bank. How does that compare with the industry generally?
Mr Oldham: I think it depends
on the size of the organisation. We are not one of the top ten
housing firms, but I think we are probably one of the leaders
in that, mainly because of the way we as a company have focussed
in particular on large mixed use communities, whether on green
field or brown field land, and it is having a long term view about
development. Sometimes the long term view is maybe ten plus years
to secure planning consent and then another ten plus years to
build that development. So that is a particular viewpoint, I suppose,
of our company in that we have focussed in particular on building
sustainable new communities, which means that we have to go through
that land banking process.
Q249 Chairman: Does the fact that
you have been given, I think, some recognition for the sustainable
approach that you incorporate into your work reflect the nature
of the work you are doing to some extent, ie that you are building
mainly in growth areas and in higher density situations?
Ms Gupta: Eight-four per cent
of our development last year was on brown field sites, which is
far in excess of the guidelines, obviously, and I think in terms
of looking at areas of land where we want to be developing the
sustainability issues are very much in the forefront.
Mr Oldham: Just to add to that,
I suppose it is a cultural thing within the business in the sense
that we are trying to think about where we think development[7]
is going in the future at times. So, for example, back in the
late 80s, early 90s, we were looking towards trying to create,
for example, twenty miles an hour speed limitations within our
residential developments. At the time it was seen as quite revolutionary
and we had a devil of a debate with the Department for Transport,
the local county council, etcetera. Today it is common place.
So it is trying to actually bring forward sensible commercial
decisions but also, I suppose, trying to sort of enhance the quality
of the place that we are making and the quality of the environment
we are creating.
Ms Gupta: That is an important
point, because what we are doing is actually adding to the overall
quality of the development, looking at the quality of life of
the people who will be living there and making attractive places
for people to live and work.
Q250 Chairman: So you are driven
partly by altruism, partly presumably by planning controls and
partly by the fact that building well is good for your bottom
line?
Ms Gupta: It adds value to everything
we are doing.
Q251 Chairman: Who within this area
actually drives it on any given site? Is it the planners, the
developers or the architects? You are going to say all three are
you?
Ms Gupta: Within the business,
or as a whole? Within our business or—
Q252 Chairman: Obviously I am talking
about the relationship between your business and outside people
like planning authorities.
Ms Gupta: I think it is driven
by us because that is our philosophy and that is the way we like
to bring forward developments because we know that that is good
for our bottom line, to use the words that you used. We also find
that because we have such a good track record of bringing developments
through the planning process, land owners are far more likely
to want to work with us, so we get introduced to far more possibilities
for future development than we might be. Also because of our reputation
we find that local authorities are quite happy or very happy to
work with us because they know that we are willing to work with
them in partnership, particularly on large-scale developments,
to work to bring the whole thing to fruition. So it is a partnership.
Mr Oldham: Just to supplement
that, an increasing problem though is actually finding anybody
out there in local government because of the skills and resources
shortage in local government and finding enough people with the
skills, because often I think to a certain extent we concern local
government when we come in and suggest a proposal and often there
are tensions within local government. Ideally, as Trisha said,
it is good to try and create partnerships, but sometimes, though,
obviously we are in conflict with local government and some of
those things may not be for professional or technical reasons,
they may be for local political reasons with local communities
in terms of their own particular views about development. So we
plough through the process and just audit-trail and go all the
way through the process to the planning inspectorate if need be,
but what we would like to say at the end of the day is to try
to be best of friends because I think at the end of the day if
communities fight you it is still part of their community and
if we are successful we want to go back and try to actually work
with them. That is one of the things we always try to do and it
is really difficult and it is quite a hard process really to go
through that. It is also in our business trying to actually, I
suppose, train our own people in this sort of philosophy and this
culture basically because we are not necessarily here today and
gone tomorrow, it is a long process.
Q253 Chairman: Am I right in thinking
that you were involved in the Greenwich Millennium Village that
we heard about earlier?
Mr Oldham: Yes.
Ms Gupta: Yes.
Q254 Chairman: Did I not hear somewhere
that there had been some debate between yourselves and an independent
architect whose original plans were somewhat more radical than
those which were eventually put into construction?
Mr Oldham: Actually, that was
a debate between the overarching master planner, who was Ralph
Erskine, a marvellous octogenarian architect whom we employed,
and the project architect. There was a debate about who was running
the show, basically, and it ended in sort of minor tears in that
there was a debate between the project architect, ourselves and
the master planner. That was resolved with us actually settling
with the existing project architect and actually getting on with
the new project architects, while still employing the original
master planner. It goes back to what I was saying to you earlier
on about design codes. The master planner will set the overall
framework for the scheme and the design code—we have got
a design code for Greenwich Millennium Village as well, so we
use that—to which then individual architects will respond
on individual phases of development so it fits in with the design
code and the master plan.
Q255 Chairman: Was the result of
all this that some of the environmental measures originally envisaged
were watered down?
Ms Gupta: Not at all.
Chairman: Okay. Thank you.
Q256 Mr Francois: I declare an interest
in that I am Essex MP and you have built and are building a number
of houses in my constituency. If I might say, your evidence is
fascinating because you are kind of getting right to the nub of
the matter. You talked about strategic section 106 contributions.
Can I illustrate with an example. In my constituency all of my
secondary schools are effectively full up, it is very difficult
to register with an NHS GP, it is practically impossible to register
with an NHS dentist, we have got all sorts of traffic problems
and they are getting worse. The more and more house building that
takes place, the more those problems are likely to be exacerbated
unless there is significant compensatory infrastructure in investment,
and what I say could apply to a number of other constituencies
around the country; I am by no means unique. What contribution
can developers like you really make to that situation?
Ms Gupta: Well, if you take an
example in Essex, which is Great Notley Garden Village, we negotiated
with the local authority a whole package of community infrastructure
items and we were able to plan for a proper sustainable community.
It was not just going to be a scheme of 2,000 houses, we were
providing community facilities, recreation facilities, a new school,
business park, shopping, all the things you really need—the
doctor, the dentist, the vet. These were all part of the Section
106 agreement and were embodied in the concept plan and master
plan, for which we got outline planning permission. Then we brought
this to fruition on the detailed phases. What we actually did,
to ensure the whole thing worked, was to provide up front temporary
facilities. So when we had built a couple of hundred houses we
provided a doctor's surgery in a glamorous version of a portakabin,
but it was basically a portakabin and the local doctors did a
surgery twice a week. What we did, by doing that, was to create
a pattern of living when people first moved to Great Notley. They
would start using the local facilities, and would get into the
habit of it. So instead of travelling into Braintree, which is
the nearest place, by car or bus, they actually had the facilities
they required on their doorstep, and we did exactly the same with
a church, a cre"che, a vet. Having established these patterns,
when all the facilities were provided in permanent buildings people
continued to use them and so it was properly established as a
self-sustaining community.
Q257 Mr Francois: I appreciate this
matter might be in some senses commercially confidential, so I
realise you cannot give a complete answer, but can you give us
at least some feel for what proportion of your profit on the deal
all of that was? The classic criticism is that the house builders
come in, they build the houses, they get away with the smallest
possible section 106 commitment they can make and then they are
off to the next site. That is the classic criticism of the industry.
By the sound of it you went beyond that and you did something
more substantial and in a sense I am trying to give you credit
for it, but I would just like to get some feel for what it cost
you to do that.
Ms Gupta: I have not got an exact
figure, but the section 106 agreement was negotiated before we
owned the land. We had an option on it. The land was originally
agricultural land and obviously the package of community benefits
came off the land value.
Q258 Mr Francois: If you do not want
to say in public, could you possibly write to us and let us know?
It would just be helpful to see that. Do you see what I am driving
at? It is important to understand where someone is doing it the
right way, as it were, what it has cost them to do that because
that might be an example for others.
Ms Gupta: That is an example of
a section 106 agreement acting in the way it should, is it not?
Q259 Mr Francois: Yes, but what I
am trying to establish is what it really cost you to do that.
If you could write to us on that.
Mr Oldham: If I could just add
to that, though, because I think one of the things to understand
is that it is different measures as well in terms of the overall
business, in terms of borrowing money from banks, the phasing
and lending. We often get asked by the communities for the environmental
and social benefits of the scheme without any regard to the economic
benefits of the scheme. So often, for example, a community maybe
wants a local by-pass at a very early stage and to actually make
these things work you have to have money in for money out, so
there is a huge debate about phasing and how you make these things
happen. Can I also say, I think there is going to be a gradual
step change. I think to a certain extent it happened after Bruntland
in 1987. I remember writing a note to our company saying, "Watch
this space, guys, there's going to be a significant change in
terms of our industry and how we to address this." I think
local government now with the next round of LDDs is really trying
to get on the case, as you discussed earlier with the Ministers,
regarding sustainable construction and sustainable communities.
So that measure is going to be very interesting.
Mr Francois: Thank you very much.
6 Note by the witness: By that I mean we should
be going beyond the planning process to address and understand
the development process. Back
7
Note by the witness: By that we mean good planning and
design that creates safe, high quality places that are environmentally,
socially responsive and economically viable. Back
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