Since taking up your role as planning minister in September’s reshuffle, you’ve been very outspoken about the need to build more homes. Where does that ambition currently stand?
We’ve undertaken a series of pretty big, fundamental reforms. The good news is that people welcome them – including the development community and most local authorities. I’m cautiously optimistic that by radically simplifying national policies and ensuring that the responsibility for local plans passes to local authorities, we’re putting the emphasis in the right place.
I’d like to point out that we shouldn’t underestimate the extent to which the previous system failed. The past decade was one of boom, of loose credit conditions, of stable or low inflation and interest rates – yet in no year did we build enough homes to meet the demand for new households, which is around 250,000 a year, by the way.
What was the main cause of that failure – the focus of the planning system or a lack of political will?
There were two fundamental problems, the first being that the whole system was just too complicated, too difficult, far too slow to navigate. Time is expense; people lost the will to continue. The second, critical, problem is that the last government hadn’t managed to build strong incentives for communities to accept development, so there was an inbuilt resistance.
We need to be clear about something: the planning system has not delivered for about 30 or 40 years. Our reform is crucial and I am confident that, with simplicity, clarity and incentives, it will work. The difficulty in the short term is that we can’t tell whether it’s working until market and credit conditions become more normal.
But for the time being, house-building rates remain pretty discouraging under this government. So where does the problem lie?
The previous system has failed. In no year did we build enough homes to meet demandThe main reason why there are still too few new houses is that people can’t afford mortgages. The banks are now insisting on 15-20 per cent deposits, which is way out of reach for many people, even those earning very decent salaries. Obviously, the NewBuy and FirstBuy policies we’ve brought in attempt to deal with that, ensuring that people can access 95 per cent mortgages despite the market conditions.
But between 2000 and 2010, we had the most benign credit conditions you could imagine – stable, low interest rates, easy credit and high loan-to-value ratios available – and we still didn’t build enough houses. The short-term problem is one of credit; the long-term problem is one of supply. And we won’t discover whether we’ve fixed the long-term problem until we’ve dealt successfully with the short-term problem.
Regarding the long-term problem, do you plan to liberalise the planning laws any further?
I think the government’s feeling is that the balance between the rights of the property owner and the rights of the community could move a little further in favour of the property owner.
One of the things that worries some communities, and indeed some of your colleagues, is that you might relax protections for greenfield sites. Is that something you’re toying with?
It’s for local authorities to decide where and how they meet their housing needs. But what is clear is that brownfield sites and empty homes alone will not provide the solution. They have a huge role to play, but the majority of units built in the past year were on brownfield sites. We’re not going to be able to meet the housing shortfall through brownfield sites alone; some greenfield sites will be needed.
You’re very keen on improving the look of new-build homes, but how can you do this without increasing the regulatory burden on developers?
It’s about having a sort of argument with the industry – telling them to think a bit about it. Regulations don’t work – you’d end up having me prescribing thatched roofs, which would be ridiculous.
Which of the planning reforms brought in by this government will make the biggest difference?
My predecessors, Oliver Letwin and others, came up with the neighbourhood plans – where communities create development plans for their own areas, on which they consult the local population. I genuinely believe that they will work – if they’re given lots of support and love and encouragement. If the system is delivering well in 20 years’ time, it will be because neighbourhood planning engaged people properly.
When these reforms were first announced, critics said they would attract the usual suspects, those who want to block development and use the plans as a ‘Nimby’s charter’. Do you think that’s been proven untrue?
To some extent, I think the usual suspects are much maligned: these are the few people who really do pull their finger out. But of course, they can perhaps be a group with a very narrow set of interests that aren’t necessarily aligned with the greater community interest.
Most importantly, they have to win a referendum of the local population, and the less consultation they do up front, the less likely it is that they’ll manage to do that, so I think there is a sort of block on that.
How do you see planning authorities changing in the next few years?
I firmly believe that neighbourhood plans will work – if they are given lots of support and love and encouragementIt’s important to separate out the various parts. There are the support services behind planning, which are quite laborious and expensive; the administrative services; and then there’s the decision-making and the advice on which crucial decisions are based.
I think that all decisions within an authority should be taken by qualified people. We’re encouraging some planning authorities, particularly the smaller districts, to think of merging their planning departments with neighbouring authorities. I think we would also be very enthusiastic about some authorities outsourcing parts of that. To give you a few examples, Salford has formed a joint venture company called Urban Vision; Breckland in Norfolk has outsourced its planning services to a private company; and Hillingdon in London has done the same. So it is beginning to happen.
So when do you hope to see the fruit of these reforms?
Ideally, before 2015! It seems to be the fate of Conservatives to deliver fantastic, promising circumstances to whomever takes over from us. I hope that we will know that things are heading in the right direction within the next couple of years, although I think it’s probably a bit optimistic to think that we’ll be turning out 250,000 beautiful houses a year that everybody loves by 2015.