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The Economic Impact of House Building

The Economic Impact of House Building

Sarah Fabes 13 Aug 2018
The Government has set out its stall for tackling the housing crisis, as emphasised most recently by the new revised National Planning Policy Framework (NPPF), which whilst covering all land use planning matters, was nevertheless firmly focused on boosting housing supply. But new housing doesn’t just address the housing crisis. It has an economic benefit too. Lichfields was commissioned to undertake research on behalf of the Home Builders Federation (HBF) to quantify the economic contribution of house building, and in particular, quantify the ‘economic dividend’ that could be realised by delivering the Government’s broad ambition for c.300,000 new homes per annum. Our analysis updated a similar report we prepared for the HBF in 2015. Our 2018 report - The Economic Footprint of House Building in England and Wales – was launched on the 24th July, the same day Government finally released the new NPPF. Our report details the key economic implications and benefits of new house building activity within England and Wales. It highlights how the delivery of 224,000 new homes last year in England and Wales resulted in significant contributions: The investment and expenditure spent on new land for housing development amounted to nearly £12 billion (£11.4 billion in England and £500 million in Wales). In 2017/18 house building generated £38 billion of economic output to the Great Britain economy. The number of people directly employed in the construction of domestic buildings in England and Wales equated to 239,000 in 2016. The majority of these jobs (224,500 or 94%) are based in England, with the remaining 14,500 (6%) based in Wales. The industry contributes to the Exchequer through a range of taxes such as Stamp Duty Land Tax, Corporation Tax and Value Added Tax (VAT). The house building industry also provides significant contributions towards infrastructure development and the provision of affordable housing. Across England, over £804 million of S.106 contributions are made each year towards funding these facilities and services, with a further £37 million of contributions made in Wales. Financial contributions are also invested in providing education facilities, sport and leisure facilities, community facilities and open space. New housing development also offers an opportunity to increase local expenditure as residents spend their money on goods and services in the local area. But these already will significant benefits will increase further if annual house building was to increase to just over 300,000 to broadly match the Government’s ambitions for England and projections for Wales. This would result in the following benefits: Our analysis shows that boosting house building will be good for our economy as well as helping to address the housing crisis. Our footprint report for the HBF builds on Lichfields’ track record of economic impact assessment and support to our clients in helping them to maximise and clearly evidence their contribution to economic growth. Both on individual projects and across their corporate footprint, we work with some of the largest and most successful companies in the property sector including commercial developers, housebuilders, retailers and industry bodies, to help them assess their economic contribution. To find out more, have a read of our new report and get in touch with Sarah Fabes.

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Safely landed? Is the current aerodrome safeguarding process fit for purpose?
Safety is of course fundamental to the aviation industry. Aerodromes, which are hubs for a wide range of aviation activity, must be able to operate within a safe environment. But how well is this requirement to safeguard operations and protect people living and working near aerodromes being applied, when proposals come forward for new development? The civil aviation and planning regimes set out a system to meet this safety objective; it is a complex system that often gives rise to uncertainty as to its application. Under the civil aviation regime, all licenced aerodromes must ensure that the aerodrome and its airspace are safe for use by aircraft. Yet only a select few are officially safeguarded under the planning regime and they benefit from Statutory Direction. But it is unclear how this arbitrary group of officially safeguarded aerodromes has been identified. The remaining licenced aerodromes can only seek voluntary protection and this is at the discretion of the local planning authority. Lichfields has reviewed the local plans of all of the local planning authorities (LPAs) in England with a civil licenced aerodrome to see how well (or indeed if) each aerodrome is appropriately safeguarded. The research has identified a flawed system with evident gaps in policy, meaning not all aerodromes are appropriately protected. How well does the safeguarding Circular work in practice in England? 92 local plans, relating to 82 corresponding aerodromes, have been reviewed. Our research has identified that only 50% of licenced aerodromes are protected in some way under the planning regime, with either an official or voluntary safeguarding status. Of the select few that are officially safeguarded under the planning regime, not all have a safeguarding policy in place within the local plan, despite the requirement to do so. In fact, a worryingly 32% of officially safeguarded aerodromes do not have a safeguarding policy in place. More positively, 13 ‘not officially safeguarded’ aerodromes have secured voluntary safeguarding with their LPAs and have policies in place in their local plans, indicating that these authorities and the aerodromes concerned understand the importance and value of safeguarding. Is the safeguarding Circular being applied to development plans in England? The national safeguarding circulars are outdated and no longer meet their intended use. Since adoption, the policy environment has changed significantly, particularly with the introduction of localism (2011), the National Planning Policy Framework (2012), a new aviation policy framework (2013), an Industrial Strategy (2017), and Brexit. The aviation industry continues to experience growth and play an important part in the UK economy. These factors all give greater weight to the need to protect an aerodrome’s ability to carry out safe and efficient operations. A review and update of national advice and how safeguarding is implemented at a local level is required, with new guidance being issued. Government, with LPA and aerodrome support, could take safeguarding policy further with a review and update to Circulars 1/2003 and 1/2010. Many of the LPAs reviewed are yet to adopt post-NPPF local plans, meaning that the current safeguarding policy – if there is one in the first place - could be more than 10 years’ old and will be likely not to reflect the current position of the aerodrome and its operational status. But these deficiencies create an opportunity for aerodrome operators to seek to incorporate safeguarding policy in reviewed and emerging local plans – it’s important for the industry to act on this now. From our work advising aerodromes, local authorities and developers on schemes at or close to aerodromes, we are familiar with the complexities of the land use planning safeguarding process, and the policies that might be put in place to meet this safety objective – both in terms of how they should be applied and the issues that arise in their application. If you would like to learn more about our research on aerodrome safeguarding please get in touch.

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