Thursday, 10 March 2011

Planning in Wonderland


‘Curiouser and curiouser’ said Alice. ‘The antics of the coalition government seem to become ever more bizarre. Have these people any idea what they are doing?’ It is just as well this blog only discusses planning matters; it would be impossible to cover adequately the whole range of nonsense emanating from ministers on education, the health service, local government, the countryside and now even foreign affairs.

The latest piece of insanity comes from Vince Cable, wearing his hat as Secretary of State for Business, Innovation and Skills and President of the Board of Trade, but who seems happy to trample on the turf of any other ministry if the subject matter might vaguely be interpreted as having anything to do with business / economic development.

Cable’s latest wheeze (which is an idea that seems to have been knocking about within the Lib Dem party for some years past) is a procedure by which landowners wishing to develop their land would state in a sealed bid delivered to the local Council the price at which they would be willing to sell their land. The landowner would be bound by that price, and the Council would have the right to buy the site at that price for a prescribed period. It is assumed that a Council might receive offers from several landowners, and would then choose to buy one or more sites, depending on which sites they would wish to see developed. The Council would then grant planning permission for the development of the chosen site (or sites) and would auction the land off to developers with the benefit of planning permission. The theory is that the local Council would get most of the increased land value attributable to the grant of planning permission.

One obvious flaw in the theory is that landowners can be expected to build the full ‘hope value’ of the land into their offer price, so that the uplift attributable to the subsequent grant of planning permission may be tiny or non-existent. There might perhaps be some element of competition between landowners seeking to get their sites selected for development, but the location of the site and its identification in the Development Plan as a site for development are likely to be far more important factors in persuading a Council to buy, rather than the asking price.

There is a distinct possibility that if a Council were to misjudge the market for development land, they might find themselves paying more to the landowner than they can subsequently realise on auctioning it to developers. A much more likely scenario is that landowners may sense a ‘stitch-up’ in this proposed system and will simply hold their land out of the market until the scheme is dropped, thus slowing development even further until it becomes a mere trickle.

I don’t share the view expressed by at least one other commentator that this is in effect a re-run of the nationalisation of development values under the 1947 Planning Act, which was scrapped by Churchill’s incoming Conservative government in 1951, not just for doctrinaire reasons but primarily because the market in development land had almost entirely dried up as a result of these provisions in the 1947 Act. But the practical effect might possibly be the same.

Cable’s outpourings on this subject seem to be no more than a kite-flying exercise, and I am not aware that it is officially adopted policy of the coalition government. Something tells me that it might not go down too well on the Tory back benches; and ‘Sir Humphrey’ will no doubt whisper in the Minister’s ear if it were to get anywhere near being formulated as official policy. So I don’t think we need get too excited about this particular piece of silliness. However, this may prove to be yet another nail in poor old Vince’s political coffin, and I would not be at all surprised if he were to be put out to grass when Cameron and Clegg have their first cabinet reshuffle later this year.

© MARTIN H GOODALL

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