Meet the developer: your local council

By Scott Harker

A local authority acquires land, proposes to build over 2,000 homes on it, submits a planning application, processes that same application before approving it at its own planning committee. Doesn’t sound like a recipe for transparency, does it?

Last week saw the first reading in Parliament of a Bill that could put a stop to such practices. Paul Holmes, the Conservative Member of Parliament for Eastleigh, is pushing for a new independent process that would come into effect when local authorities act as developers within their own boundaries. This seems a sensible solution to an obvious conflict of interest, but how did we get here and is this really an appropriate fix?

It is hardly news to anyone that local authority budgets have been under strain for some time. Restrictions on borrowing and cuts to funding from central Government have created incentives for local authorities to adopt a more commercial focus. Given the general lack of affordable housing across the country, residential development has been an obvious avenue to explore but some authorities have looked to provide other infrastructure including commercial space and energy projects.

Employing their power as landowners, many local authorities are using the profit from developing their own land to subsidise their services and reduce the need for tax hikes. Such an approach seems to fit well with the Government’s call for local authorities to be innovative in how they deliver services.

Paul Holmes has a particular interest in such developments. Within his own constituency, the Liberal Democrat-controlled Eastleigh Borough Council is bringing forward proposals for 2,500 new homes in the village of Horton Heath. The Council purchased the land from a private developer and is planning a mixed-use development. The outline application and masterplan for the scheme is currently under consideration by the Council’s planning department.

Holmes’ Bill would trigger the independent process if a local authority proposes a development of 300 or more homes within its own boundaries, or if 10% of electors in a council ward petition for it within 30 days of the application being submitted. The developing authority would then pay a neighbouring authority to process the application and make a recommendation according to the developing authority’s own policies. The application would then return to councillors at the developing authority for a decision. To ensure that the application has been appropriately considered, the Planning Inspectorate would then need to sign off on the decision if councillors approve the application.

The Bill has only just landed in Parliament and is likely to be amended. If it progresses further, it is already clear that the scope of the Bill needs careful consideration. Holmes’ proposals are targeted at for profit housing developments, but why do such projects warrant special consideration over energy developments that are also for profit? Does the proposed housing mix change the need for an independent process? The process should also take account of whether voters have elected a council in part because of a party’s pledges to develop more homes and facilities.

Further to this, if money within local authorities is finite, then expertise is even more so. It is difficult to imagine a situation whereby local authorities would want to loan their own specialist officers’ time to consider planning applications that mean little or nothing to their own residents. 

It is also unlikely that local authorities would welcome external officers unfamiliar with their development policies making recommendations on matters within their district or borough. The Bill could kill off one unpopular practice and replace it with another.

The Bill as presented at first reading therefore seems difficult to implement. This does not change the fact that it identifies an area where greater clarity is needed. Local authorities are only likely to become more commercially active. Clear and consistent guidance is required on how such applications are determined, even if a full blown delegated system proves a step too far.