12 Nov 2019
On the 26th October, the Ministry of Housing Communities and Local Government [MHCLG] launched a consultation on Development Corporation reform. It will seek to establish when it is appropriate for Development Corporations to be used and how legislative reforms might ensure that a fit-for-purpose model exists. The Government have simultaneously released guidance on a new ‘Development Corporation Competition’ that invites local authorities to apply for up to £10 million funding to ‘explore delivery models that have been less commonly used in a contemporary context, such as development corporations’. The MHCLG have set out that they are looking for up to 10 housing and economic growth opportunities with a regeneration focus.
The five established Development Corporations
Under current legislation, Development Corporations have the power to acquire (including compulsory purchase), develop, hold and dispose of land and property; as well as the ability to facilitate the provision of infrastructure, create businesses and subsidies, and offer financial assistance. The Localism Act (2011) allowed the Mayor of London to designate Mayoral Development Areas and establish Mayoral Development Corporations. Powers to establish Development Corporations were extended beyond London to England’s first Metro Mayors in 2017, and then again to locally-led new towns in 2018. The five active Development Corporations are set out below [Table 1].
Table 1: Established Development Corporations
Stockport Town Centre West
The ‘Stockport Town Centre West Mayoral Development Corporation (Establishment) Order 2019’ came into force on 2nd September 2019. The Stockport Mayoral Development Corporation [SMDC] is the first in the country to focus on town centre regeneration, with Stockport Council and the Greater Manchester Combined Authority proposing to deliver over 3,500 new homes in Stockport Town Centre West across a 52.6ha area.
Figure 1: Illustrative Vision for Stockport Town Centre West
Source: Stockport Council - Strategic Regeneration Framework
Challenges for Stockport Town Centre West
Delivering 3,500 new homes on predominantly brownfield land under the control of 500 landowners over the next 15-20 years is ambitious. The housing delivery achieved by Olympic Park Legacy Corporation [OPLC] and Old Oak and Park Royal Development Corporation [OOPRDC] in London [Table 2] does not provide means for encouragement, with neither delivering close to their adopted or emerging housing requirements. Outside of London, the only precedents are the South Tees Development Corporation [STDC] and Ebbsfleet Development Corporation [EDC], both of which serve very different purposes to the SMDC. The STDC is exclusively employment regeneration focussed and the EDC is a unique Development Corporation established with sole the purpose of delivering Ebbsfleet Garden City. Furthermore, by not assuming development management or plan making powers, there has been some doubt as to how SMDC can coordinate and deliver such an ambitious project.
Table 2: London Development Corporations Residential Delivery
Source: OPLC Housing Explanatory Note 2019 & OOPRDC Authority Monitoring Report 2018
Financing and Delivery
Most of the initial reservations over the Stockport Town Centre West project have been centred on how investment to deliver the vision set out in the Strategic Regeneration Framework [SRF], which includes a mix of market and affordable dwellings for families, young professionals and retirees across different density ‘neighbourhoods’, would be secured. However, on 1st October, an Investment Strategy Facility Report [ISFR] was approved at the meeting of Stockport Council’s Cabinet. The ISFR sets out the Council’s investment objectives and options, as well as the preferred operating and delivery model for SMDC. In order to deliver the volume and mix of housing outlined in the SRF, clear overarching financial coordination and management will be required. To achieve this the ISFR sets out that SMDC will adopt a range of roles including; promoter, facilitator, direct developer and JV partner with developers.
To achieve the ambitious vision for the project, SMDC will have to make full use of the development and acquisitional powers afforded to it, whilst simultaneously levering in public and private sector investment. The ISFR states that that SMDC will utilise a variety of investment techniques to target commercial and regeneration opportunities. This could include gap funding, land acquisition funding, remediation investment, patient capital, feasibility funding and direct investment. The ISFR also clarifies that the decision not to assume planning functions was taken to ensure that SMDC focuses on leading regeneration through acquisition and development powers.
The launch of the ‘Development Corporation Competition’ and the Government’s consultation on their reform indicates that there will be an increasing emphasis on utilising Development Corporations to deliver regeneration schemes. Ultimately however, eight years since the rebirth of Development Corporations in the Localism Act, there remains an absence of evidence to suggest that they are the most effective mechanism to deliver either major redevelopment schemes or smaller town centre regeneration projects. Nevertheless, if Stockport Town Centre West, or a similar project conceived through the ‘Development Corporation Competition’, is successful it could represent a renewed purpose for Development Corporations as a tool for town centre regeneration.
 MHCLG – Development Corporation Reform  MHCLG – New Development Corporation Competition  Stockport Council – Stockport Town Centre West Strategic Regeneration Framework  Stockport Council - Stockport Mayoral Development Corporation Facility Main Report
11 Oct 2019
Planning for housing is not an academic exercise. An insufficient supply of deliverable housing land means not enough homes will be built. House prices will rise (further). Some people will be left without a home of their own. This is why it is of paramount importance that we have a planning system in Wales that works to deliver housing.
On 9 October 2019 the Welsh Government published its consultation document, “ Delivery of housing through the planning system: Revisions to Planning Policy Wales and associated advice and guidance”. Responses are due by 20 November 2019.
The focus of the document is on responding to the perception that developers are taking advantage of the long-established five-year housing land supply policy (Planning Policy Wales). It implies that developers are disingenuously “querying” the deliverability of allocated sites, thereby reducing local authorities’ five-year land supply figures and swaying the planning balance in favour of obtaining permission on “speculative” sites – coded language for windfall sites, which the Welsh Government implies are undesirable.
Its key proposals are:
To remove the requirement in Planning Policy Wales for local planning authorities to provide a five-year supply of land for housing.
To consequently revoke Technical Advice Note 1 (TAN1) in its entirety.
To replace the monitoring of housing land supply by the monitoring of housing delivery based on the Local Development Plan (LDP) housing trajectory, to be reported through the Annual Monitoring Report (AMR).
These latest proposed changes follow the Welsh Government’s disapplication of paragraph 6.2 of TAN1 in July 2018, which attached “considerable weight” to the lack of a five-year housing land supply as a material consideration in determining housing applications. (N.B. The disapplied paragraph did not state that this would be the overriding factor; in order to secure planning permission, proposals would still need to meet the principles of good planning and be assessed as sustainable.) This move, which was widely opposed by developers, left the matter of weight to be given to this factor to the discretion of the decision-maker when taken in the round as part of the planning balance. The lack of a five-year supply therefore remained (and still is currently) material to planning decisions. This is key to ensuring sites are brought forward to provide needed homes in the short to medium term.
If the requirement for a five-year supply is taken away entirely, there would be no policy basis for supporting development proposals according to their potential to fill unmet housing needs. With 19 out of 25 local authorities currently unable to demonstrate that they have enough housing land in the pipeline to meet needs over the next five years, there is a clear imperative to bring additional sites forward. If this is not happening through the plan-led system, surely measures should be kept in place to support the delivery of housing through other routes?
The Welsh Government proposals would also result in key differences in the way local planning authorities assess how their LDPs are performing and their obligations to rectify any deficiencies. Housing policies would be tested against the LDP trajectory, which would need to be updated each year through the AMR. The trajectory should set out the sources of housing land needed to meet the full housing requirement during the plan period plus a flexibility allowance (identified by the document as 10%). Delivery will be tested against projected annual and cumulative build rates based on the housing requirement (not including the buffer).
There would be no hard consequences for under delivery against the trajectory. Local planning authorities would need to consider performance against all indicators of the LDP collectively and to assess the magnitude of variance (a subjective assessment) before deciding on appropriate actions to be taken. Examples of these actions in the document range from providing training to officers or members to simply conducting “further research or investigation” to triggering an early review of the plan (a process which, as we know, takes years to complete).
The way in which the existing five-year supply requirement policy has been implemented has not proven adequate to deliver a sufficient number of homes through LDPs or otherwise, and this is clearly an issue that should be addressed. However, the proposals put forward in this consultation offer a significantly weaker approach, which is likely to yield even weaker housing delivery than under the current arrangements.
The proposed changes outline a system whereby the impetus for local authorities to provide enough homes would effectively be relaxed, with no hard consequences for failing to deliver and no mechanisms in place to fill the gaps. Instead of identifying ways to make the plan-led system work, they would simply re-frame the metrics to make it look as if the system is working even if it is not and cut off the only available avenue for housing to come forward.
Is the current system so broken that it needs such a draconian restructure? True, changes are needed to support the delivery of housing through the plan-led system – where planning for all types of development can be considered holistically. But is the main problem an overreliance on windfall sites (in sustainable locations), or is it rather that an insufficient number of homes are being delivered to meet the needs of the nation?