With proposed developments in places such as Bedfordshire, Manchester and Leeds, and ambitions to deliver between 15,000 and 40,000 homes per site alongside schools, healthcare, transport links and green space, the intent is clear — albeit narrowed down from the previously committed 12 new towns last year, in a reflection of viability and environmental constraints.

The programme remains central to Labour’s ambitious 1.5 million homes target, with ministers aiming to commence work on at least three of the new towns during this parliament.

But as those of us in the sector know all too well, announcements like these are just the beginning. The real test will be whether the planning and delivery system is set up effectively to turn these ambitions into reality, particularly when it comes to enabling SME developers to play their full part.

At Paragon Development Finance, we work with hundreds of SME developers across England, Scotland and Wales. Since 2018, we have funded the delivery of more than 13,000 new homes and provided over £3bn in lending to support developers building the communities the country needs. From our experience working with developers UK-wide, we know that if the new towns programme is to succeed, SMEs must be central to delivery, not peripheral.

Large, planned settlements naturally lend themselves to phased development, smaller land parcels and a diverse mix of house types, all areas where SMEs excel. But this only works if planning frameworks actively support multiple developers operating side-by-side, rather than defaulting to models that favour the largest players. Diversity of delivery is ultimately fundamental to speed, resilience and quality.

This is where effective deployment of Section 106 contributions by developers is crucial —ensuring that funding for roads, schools, healthcare and community facilities is delivered early and transparently, so local communities can be brought along the journey. When infrastructure is brought forward in alignment with development, and when local voices are engaged with, trust and support can be earned when residents are able to see the wider community benefit.

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In our consultation response to the National Planning Policy Framework’s (NPPF) proposed reforms, submitted in March, Paragon called for the government to set clear national expectations on proportionality, decision?making timescales, Section 106 completion and viability practice, with accountability where local authority delays impede delivery.

In recognition of the uneven playing field our customers continue to navigate compared with national housebuilders, we also urged policymakers to agree a clear, formal definition of an SME housebuilder within the planning framework. This would provide a consistent basis for linking eligibility for mediumsite flexibilities and Building Safety Levy exemptions to genuine SME delivery, using criteria which reflects the scale, funding structures and risk profiles typical of smaller developers.

Alongside the new towns announcement, the Government also recently launched a consultation on introducing a national default fee schedule for planning applications, aimed at moving planning fees closer to cost recovery and improving local authority resourcing. In theory, planning departments which are better funded should mean faster and more predictable decision making, something our customers have long been calling for.

We must acknowledge, however, that higher fees only work if they deliver tangible, better outcomes. For all developers, but SMEs especially, rising costs at the beginning of the process must be met with clearer timeframes, consistent decision making and fewer delays once applications are submitted. Otherwise, higher fees just become yet another barrier to entry.

This is where I bang my drum about the one, very crucial thing that's still missing from planning policy — accountability. Currently, there are few deadline incentives, or penalties, for local planning authorities to determine applications, appeals or even spend unallocated Section 106 contributions within agreed timeframes. Without clear, enforceable deadlines, decisions stall, leading to uncertainty for developers and undermining confidence for lenders assessing risk.

Effectively resourced planning teams, realistic phasing and transparent local fee structures can reduce risk and unlock finance. If we can ensure planning reforms effectively support and enable the ambition of housing developers, the capital will follow.