Spending Review

30th November 2015

Last week’s Spending Review heralded big changes for the economy, northern business and planning and development especially. Managing Partner Robyn Peat and Richard Garland, who heads up our planning and development department, share their thoughts on the Chancellor’s speech.

Northern Economy and Business

From a business and economic perspective, the Autumn Statement reinforced the government’s commitment to ensuring its Northern Powerhouse agenda remains on track. Decentralisation was a key theme and George Osborne revealed more details around greater devolution powers, with local authorities gaining control of extra fiscal powers including authority over business rates, local services and creation of more job opportunities.

This will provide great impetus to address the North-South economic divide and enable the North to put in place the foundations required to equal the economic dominance of the Capital and South East. Indeed, the Chancellor confirmed that the North has grown twice as fast as the South and that the Midlands is creating jobs three times as fast as London and the South East. What’s more, Osborne pledged that one million extra jobs will be created in the North over the next five years – encouraging signs of the progress the northern economy is making.

The Chancellor’s pledge to spend £150 million on transport for the North demonstrates that there’s a genuine attempt from Whitehall to generate economic renewal in the North. It’s not just a lot of ‘pen pushing’ activity to “be seen to be doing something” about the long-term neglect of the North.

Planning and Development

In terms of planning and development, the Chancellor placed a big emphasis on accelerating housing supply with an ambitious aim to build 400,000 new affordable homes in England. 200, 000 of which will be Starter Homes and 35,000 will be Help to Buy: Shared Ownership homes. He also announced that the housing budget would double from 2018-19.

Through reforming the planning system the Government hopes to incentivise housebuilding. In other words, make it easier to build through less red tape, better funding and a more simplified planning permission process.

Of particular significance is the change in the assessment of brownfield sites – with those in the greenbelt being assessed for development in the same way as other brownfield sites, as if they were not in the greenbelt – providing they contribute to Starter Homes and subject to local consultation. A relaxation of planning policy towards smaller sites will also be made with a view to benefitting SME building firms. This will occur alongside reinforced pressure on local authorities for housing delivery and further use of Neighbourhood Plans to bring forward housing development in excess of that allowed by Local Plans. Funding for small-medium scale developments is still a big issue for SME builders. While this has been recognised in an extension of the Builder’s Finance Fund, we do think the impact of this will be localised and not address some wider industry issues.

The changes could have meaningful effects for landowners with appropriate land holdings across the country. As per previous reforms, it is likely that the majority of the changes will be implemented quickly by the recently established National Planning Policy Guidance (NPPG), which we are seeing as a key influencer on the new look planning system.

Summary

The announcements made in principle will bring sweeping changes if put into practice. The government now need to see through its pledges and promises – 2016 and beyond provides a lot of opportunity for progress, especially for the acceleration of the Northern Powerhouse agenda and the new approach to planning and development.

Cameron and his cabinet now need to follow through on ensuring decentralisation happens so that the North really can make real steps in becoming an economic stronghold for the UK not only nationally but internationally too. In terms of planning and development, it all depends on how the new polices will play out under the NPPG. We’re all aware that the existing planning system is outdated and in need of reform. There’s a lot of hope resting on the new planning structure but landowners and those looking to enter the planning system are wise to be prudent until the proposed changes start to take place in the real world, outside of the House of Commons.

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