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Could regional devolution improve housebuilding?

Efforts to boost housing supply will only succeed when local governments are empowered to plan and deliver homes in the right places, according to one development finance lender.

The comment comes after England’s regional and city-wide mayors called on the government to speed up and extend the devolution process earlier this month.

The areas of England administered by city mayors now account for almost 39% of all British growth, up from 35% in 1997.

The mayors want greater control over public services, including skills, training, apprenticeship services and employment programmes.

How could devolution improve housebuilding?

“My view is that the government needs to provide a planning policy that is fit for purpose to ensure the right houses are built in the right places and devolution to local planning authorities is the right step,” said Sam Howard, COO of Regentsmead.

“The flow of communication between legislators and local councils has traditionally been poor and deliberately vague.

“It’s open to different interpretations as this allows the government to pass on a lot of their responsibility with regards to housebuilding.”

Steve Larkin, director of development finance at LendInvest, also felt devolution could have a positive impact on housebuilding.

"Efforts to boost housing supply will only succeed when local governments are empowered to plan and deliver the right homes in the right places, enabling builders of all size.

“We need to see a diverse range of finance products available to housebuilders.

“Further devolution of powers to local authorities to borrow capital, invest and retain tax receipts will lead to a much-needed increase in local finance opportunities for builders, especially SMEs."

Is devolution enough?

Rico Wojtulewicz, policy adviser at the Home Builders Association (HBA), felt that the simplest way to build more homes and to deliver a more skilled workforce was to enable more SMEs to build.

“With the planning process devolved to local government and volume developers building 80% of the market, the HBA doesn’t believe that further devolution would improve a situation that local authorities already fail to comprehend.”

Michael Dean, principal at Avamore Capital, felt that devolution was a double-edged sword in terms of housing.

“Devolved power transfers the power to make planning policy from one set of politicians to another.

“On the one hand, housing targets should be determined at a local level, however, on the other, hand if those housing targets are politically driven (either too high or, more worryingly, too low), then I don’t see that as a good thing.”

Michael pointed out that the biggest flaw in the planning system was that planning could be refused for politically motivated reasons when there were technically no grounds for refusal.

“This invariably leads to delays, successful appeals and wasted local money.

“Devolving housing policy to local authorities is fine, but policy and decisions should be made by qualified professionals and not by politicians who are more likely to sway housing policy to suit their support base.”

Sam had similar concerns, adding: “Involving the local stakeholders in the planning process can only be a positive, but it does require the local planning departments to have the requisite funding so that they can provide an efficient service.

“Devolution without the right planning infrastructure may take a national problem and just make it local.”

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