OBR approval is central to new Planning and Infrastructure Bill amendments

Ministers and their civil servants were apparently working through the weekend to produce wording for new amendments to the Planning and Infrastructure Bill  - which is already making its way through the processes at quite a pace.

This comes following Steve Reed’s big splash as new housing secretary at Labour Party Conference: he signed MAGA-style red caps and bucket hats emblazoned with ‘Build baby, build!’.

The following amendments were unveiled earlier this week, for tabling in the Lords on 20th October:

• The Secretary of State to have the power to issue ‘holding directions’ to stop local authority refusals before the decision is issued while they consider using ‘call-in’ powers. Currently, the SoS can only do this when councils are set to approve applications. This has the potential to reduce the need for full-blown appeals. We would expect the hold to be available to the SoS between a resolution to refuse, but before the legal decision is issued.
• Non-water sector companies to be able to build reservoirs, which would be automatically considered as nationally significant infrastructure projects. The idea is this could unlock housing.
• Planning permissions no longer at risk from being timed out during lengthy judicial reviews.
• Allowing the Nature Restoration Fund to support the delivery of marine development, securing better environmental outcomes for marine habitats whilst accelerating the construction of coastal projects.
• ‘Streamlining’ Natural England’s role by allowing discretion only to issue responses on applications that pose higher risks or present stronger opportunities for nature recovery. Local authorities will be provided with standard guidance for non-complex applications. 

The government’s aim, as ever is to speed up approvals and delivery, through de-risking the process. But quite beyond the attempt to hurry towards the 1.5 million new homes target which seems a long way off, the late-stage amendments tell us a fair bit about the chancellor’s situation as she enters the budget in November. The Office for Budget Responsibility (OBR) – created following the 2010 election to be an independent ‘fiscal watchdog’ check on government – is the modern Oracle, and chancellors must meet with its approval to keep the confidence of the markets. The pre-election pledges on tax and spending also box Rachel Reeves into a fiscal black hole of £20-30 billion. An OBR forecast of growth would also provide political relief.

This is where the amendments are designed to help. The OBR rated the original Bill at providing £3 billion in tax receipts. The message from the centre was clearly that more was needed from the sector marked out early on as a primary growth driver in the economy. Hence the weekend work. The hope is that after re-assessment on the basis of these amendments, the word will come from on-high (the OBR) that, yes, this will improve the national balance sheet by a few more billions in tax receipts, give or take. 

At the same time, negotiations are still progressing between the Mayor of London and MHCLG to produce area-based policy changes for London to enable the target affordable housing delivery to be reduced from 35 percent down to around 15 to 20 percent. This is clearly targeted at the viability crisis of which everyone in the industry will be aware. The FT on the weekend noted under 4,000 housing completions in the first six months of the year. The target is 88,000 a year, so we are running at around 9% of the target. The government was keen to quote business leaders in the planning amendments press release. But they will know that viability and the ability to fund projects, as well as process de-risking, is crucial to delivery for this industry.