When prime minister Theresa May launched the industrial strategy green paper in January there was limited reference to housing. Strategic industries identified which could develop “sector deals” with government included life sciences, the financial sector and emerging industries such as artificial intelligence and satellite technology. However, behind the scenes, housing minister Gavin Barwell has been working up plans to see how the headline policy document could be aligned with his flagship housing white paper.
How could it work?
Although nothing has been firmly decided, assuming there is no change in national leadership and the key ministers retain their seats in the General Election, civil servants have until the autumn to polish off the industrial strategy white paper – a more detailed consultation than the green paper.
One way of tying the two strategies together would be for sector deals put forward by industry to have to identify housing provision within their bids. Modular construction is expected to be picked out as an industry which could receive more direct support.
Ministers could also consider giving local enterprise partnerships a formal advisory role on housing.
The government has indicated it will expect a proactive approach from regional authorities and industries. Ian Fletcher, director of policy at the British Property Federation, says: “At the broadest level, the extent to which those areas are seeking to grow and to grow quickly are future-proofing in terms of housing demand.
“There are certainly some interesting conversations if you know you are in a high-need area such as Cambridge: do you plan for the need today or additional provision based on your growth predictions?”
Place-based strategy
Integrating housing and industry is linked to a new government focus on “place-based” strategic thinking to drive economic growth. What is the point of building 200 homes if they are in a place where no-one wants to live? And how can you support new industry hubs if there is inadequate provision of affordable housing for workers?
Waheed Nazir, strategic director of economy at Birmingham City Council, says: “If the industrial strategy is to be successful it needs to recognise that not only is housing itself an industry, but also the important role that housing supply and quality of life play in economic growth.
“Employment growth requires an appropriate supply of labour and the people that provide that labour supply require good quality homes in which to live. Failure to provide enough homes leads to overcrowding, which impacts on individuals’ ability to work, as does poor quality housing. This has a direct impact on productivity.”
If all goes to plan, the industrial strategy will see the delivery of future-proofed clusters of industry across the UK. The vision is seen as central to a balanced post-Brexit economy and an antidote to the low-tax, low-regulation “safe haven” economic model.
Back to the future
The idea of an industrial strategy and a more interventionist approach from government is not a new phenomenon. It is usually associated with the Thatcher administration of the 1970s. However, a source at the Department for Business, Energy and Industrial Strategy said one way the strategy aims to be different from its forerunners is by better integration with other departments.
Speaking at a BPF and Planning Officers’ Society conference last month, Barwell identified this as a personal priority: “We have got to be clever as a government about thinking cross-government about these issues. So that when the Department for Education is allocating the schools budget, or when the Department for Transport or Network Rail are thinking about the Highways England capital budgets, we are thinking about how that expenditure helps to unlock new housing sites.”
It is perhaps no surprise that there is greater cross-pollination between the Department for Communities and Local Government and BEIS. Communities secretary Sajid Javid and business secretary Greg Clark effectively swapped roles in last year’s Cabinet reshuffle.
Marginalising housing in the industrial strategy can only hinder the ambition to cultivate world-leading sectors.
“We have some scepticism of going down the sector deal approach because actually the areas need support with infrastructure and housing,” says Centre for Cities chief executive Andrew Carter. “That is a broader concept of facilitating economic growth rather than car manufacturing, for example.
“The challenge will be implementing it from national government level.”
Further devolution of powers and funding at a local level will be central to any housing industry tie-up.
Comment: The importance of place in national strategies
Iain Jenkinson, joint head of planning, CBRE
An exciting national strategy is emerging, based on the country exploiting our most competitive sectors and accelerating the future supply of housing.
There is an awful lot of good stuff in the government’s key strategies published over the past few months, and we should never underestimate the complexity of issues they are trying to tackle. However, as consultation on both the industrial strategy green paper and housing white paper draws to a close, I do wonder whether the role of “place” has been somewhat overlooked.
Let’s start with housing. We talk a lot about housing, and for good reason, but I would argue that the economic underpinnings of our very diverse and unique places came first. Housing follows.
If we spent as much energy in understanding the economic futures of all of our places as we do housing then we would have a much clearer sense of direction for the country as a whole.
The industrial strategy green paper still remains quite a clunky document, steered towards macro-economic considerations, in which economic scale is clearly the only way in which the UK will compete internationally. But that stance misses an important part of the story. It is not scale that should be the sole focus of our strategy, but rather, changes in the sectoral make up of each of our places.
We should be asking: what are we uniquely good at and what will the global economy look like in 50 years? Then we should ask: what is the role of all our economic-places in the future?
The evidence is there. The Department for Business, Innovation and Skills (now the Department for Business, Energy and Industrial Strategy) looked in granular detail at the high-value knowledge sectors that are growing (and declining) across all of the UK’s local enterprise partnership areas (Mapping local comparative advantage in innovation – July 2015). And guess what? Everywhere is different, there are (and will be) winners and losers, but the quicker we turn the policy debate to align more closely with the genuine economic role of places, the most robust the national policy framework will be.
The evidence is there and hopefully the next iteration of the green paper will make use of that much more.
That brings me to the housing white paper, which, among other things, should be considered a skills strategy by implication. How do we know if we are providing the right housing supply in the right places if we do not fully understand the economic role and function of our respective places?
Step one of the housing white paper talks about “planning for the right homes in the right places” but is ostensibly a land-determined equation.
Nowhere within its pages does the white paper pay the necessary attention to the economic role of our places. This in itself requires attention as the white paper evolves and matures into policy, if we are to avoid the mistakes of the past 20 years.
To send feedback, e-mail Louisa.Clarence-Smith@egi.co.uk or tweet @LouisaClarence or @estatesgazette
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