COMMENT For those committed to the UK for the long term, the letter “S” is an important one this year – and a welcome change from hearing or avoiding the “B” word.
While the written ministerial statement accompanying the chancellor’s speech on 13 March still managed to set out no fewer than 27 items relating to tax, the now annual Spring Statement is not intended as a fiscal event.
One of the messages that we have consistently conveyed to the government is that long-term real estate investors need certainty regarding the future tax and regulatory environment and that the government should stop constantly tweaking the tax rules, as it has been wont to do over the past decade, so this is welcome.
Instead, this year’s Spring Statement was devoted to “slaying the twin demons” of low productivity and low wages. To tackle these, the chancellor reaffirmed the government’s commitment to the National Productivity Investment Fund, a £37bn pot that will be directed at improving the nation’s physical and digital infrastructure.
There was also a hint of even more money being made available in the case of an EU exit deal, with the chancellor prepared to release some of his £15bn “contingency fund” if an orderly Brexit is achieved.
So far, so good. However, delivery will rely critically on another “S” – the next government Spending Review, which the chancellor announced will take place before the summer recess.
Planning departments squeezed
If we are to see the new infrastructure and real estate development that this country needs to adapt to changing social and economic pressures, and raise productivity, it is crucial that we have well-resourced local authorities and, in particular, that they have a well-resourced and responsive planning function.
Sadly, over the past few years we have seen the reverse – with planning departments suffering the largest percentage reduction in spending of any local government function since 2010.
It’s all very well making money available for renewing town centres and enabling infrastructure, but if planning teams up and down the country are not equipped to create and deliver the programmes and projects that are needed, or to process these ambitious spending plans, the government’s aspirations will remain just that.
That is why the BPF will be advocating strongly as part of the Spending Review this year, for an increased settlement for local authority planning teams.
New permitted development right
Staying with planning, the chancellor confirmed a new permitted development right to allow upward extension of existing buildings. The property industry has supported some PDRs in the past, not least office to residential, and will continue to support sensible reform in this area.
However, we are concerned that allowing building up on top of existing property, and allowing properties to be demolished and rebuilt, may not lead to well-planned places. Similarly, a PDR that allows hot food takeaways to be turned into homes may lead to poor-quality development.
What we really need is for local authorities to engage more actively in planning for adaptation. This involves having an up-to-date, forward-looking local plan, which is only possible with a properly resourced planning team.
The government also announced the upcoming publication of a Future of mobility – urban strategy paper, which will set out how to “put the UK at the forefront of mobility… responding to… transport technology… self-driving vehicles”. It’s hard to imagine how this vision has any chance of being realised however, in local planning teams with sky-high in-trays of applications and enquiries to deal with.
So the message to the chancellor is clear – continue to invest in infrastructure, R&D and technology. But alongside that don’t neglect to invest in the grassroots practical support that is needed to deliver up and down the country and thereby support the increase in productivity which will be essential for future success.
Melanie Leech is chief executive of the British Property Federation
