Companies say red tape is a serious danger to industry

HOUSEBUILDERS wilting under a mortgage drought and a savage recession appear to have finally run out of patience with the UK’s planning system.

Gripes over a bureaucratic and lengthy target-driven planning process were never far from the surface even at the height of the housing boom.

But with the number of housing completions during 2009 at its lowest since 1946, many builders now argue planning delays pose as much threat to recovery as the problems in the banking sector which crippled lending.

The 118,000 homes built last year were less than half the 240,000 pledged by Gordon Brown on taking office to tackle the UK’s housing shortage – but the average housing scheme is taking more than a year to get planning permission.

Redrow chairman Steve Morgan attacked the “sheer levels of bureaucracy and red tape” – and a list of supporting documents required by planners which “verges on the comical” – in the builder’s recent results.

His brutal verdict was: “It is reflective of the system that Redrow, as one of the UK’s largest home builders, now spends more money on planning and planning related fees than it does on bricks.”

Taylor Wimpey voiced its own concerns about a “very complex and convoluted” system, while the industry trade body – the Home Builders’ Federation (HBF) – said land approved for development through the planning system “has been falling steadily over the last 10 years”.

This has a real economic impact as planning delays have been estimated to cost the UK economy at least £700m per year, according to the 2008 review of the system by former Barratt boss David Pretty and Essex County Council chief executive Joanna Killian.

Furthermore, the HBF claims every new home built provides 1.5 direct full-time jobs, as well as up to four times that many in the supply chain.

The Government has made some progress on planning through the Infrastructure Planning Commission, an independent body set up to decide on nationally significant infrastructure projects, which began work last October.

This aims to avoid a repeat of scenarios such as Heathrow’s Terminal 5, which opened for business more than 16 years after the original planning application.

But it is on the nitty-gritty, such as housing schemes, where too little has been done, the industry says, as developers are buried under mountains of paperwork at every turn.

Policy and regulatory demands by central and local government on new homes are “increasingly unrealistic”, according to the HBF.

Its director of planning, Andrew Whitaker, says it is often a question of “money and manpower”.

He said: “On the anecdotal level, local councils are risk-averse and they ask all sorts of things just in case something is taken to a judicial review.”

Builders preparing a major scheme usually hold a pre-application discussion with planning officers to discuss the sort of information which will be required with the application.

These are drawn from a local list of around 30 topics ranging from site plans and elevations to archaeological and wildlife surveys – which can only be carried out at certain times of the year.

Compiling all this information takes time and the developer is only considered to have submitted a “validated” application when it has all been received.

After this, the 13-week deadline for the council to begin considering the application begins, with consultations with bodies such as the Highways Agency and Environment Agency as well as local residents.

If permission is granted, it will rarely come without conditions.

The council will also often grant permission subject to a “Section 106” agreement, where the developer agrees to provide leisure facilities or affordable housing as part of the scheme.

Section 106 negotiations – thrashed out between lawyers on both sides – are not run concurrently with the planning application because the council may reject the application.

The Killian Pretty review identified serious flaws with the current process, under which planning grants for local authorities emphasise the eight or 13-week deadlines for deciding applications.

Planning authorities can put pressure on developers to withdraw applications with the threat of refusal if they go over the target deadline, while the ticking application “clock” allows little flexibility for negotiation and chance to improve schemes.

The system can also lead to a “Bermuda Triangle” syndrome, where applications which are out of target are given a low priority and get lost in the system.

Stuart Milligan, Redrow’s head of land and planning, is a weary veteran of many years struggling with the planning system.

“The process is just incredible compared to what it was,” he says.

He recalls a major scheme in South Wales where Redrow was required to spend an extra £9,000 supplying 18 copies of its environmental statement to consultees before the application could be submitted.

Another council, in Essex, asked it to withdraw the application for a scheme so the authority could meet its 13-week deadline – and then rejected the resubmitted proposals.

Research from the National Housing and Planning Advice Unit (NHPAU), published last month, found the average time taken by 45 authorities to consider applications during 2005- 06 was 43 weeks – although, including the time the application is with the developer, the total stretches to 66 weeks.

The NHPAU highlights a vicious circle as developers currently need to apply for more permissions than if they could rely on obtaining consents in reasonable time, putting extra burdens and costs on them and planning departments – and adding to the problem.

From drawing board to key in the door, the development process can take up to five years. The NHPAU warned: “Such a long period will inevitably discourage investment in bringing forward new sites in the period following a recession, as developers will want to be certain that a strong recovery is under way before they make any such lengthy commitment.”

Conservative planning minister Grant Shapps has attacked the “tidal wave of bureaucracy” in the planning system and claims that the Government has issued more than 3,200 pages of national planning guidance since 2005.

A recent Green Paper called for bottom-up decision-making rather than centrally imposed housing targets, with local incentives for development and planning decisions as “local and democratically accountable as is practicably possible”.

The industry have given this a luke-warm reception so far as a “high-risk” strategy, as while most people recognise the general need for more housing, the principle often wavers on their own doorstep.

Ian Baker, managing director for housebuilding at Galliford Try, said: “The next government should focus on addressing the already shockingly low levels of housing supply by implementing a radical overhaul of the planning system that tackles ‘Nimbyism’ on the ground, not contributes to it.”

A Department of Communities and Local Government spokesperson said improvements, such as cutting the information required for applications, will save more than £120m a year.

“Proposals to get councils and developers working together before applications are submitted, and to reduce the number of conditions applied to planning permissions, will give developers clarity about the decision-making process, and certainty about when and how new developments will be delivered,” he said.

But there is more than a whiff of mutiny in the air from an industry fed up with the current situation and has clearly decided that enough is enough.

Politicians face a delicate balance between giving locals a voice and meeting housing needs, but they can’t have it both ways.

Mr Milligan adds: “If the Government wants to get housing numbers up, then they need to swing the pendulum back in favour of development.”

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