COMMENT: I am not at all sure why I warranted an invitation to the Municipal Journal annual contributors lunch a few days ago, but it was a very great privilege to be included.
Serious Thought Leaders in the local government sector – leaders, chief officers, MPs, journalists, academics, think tank policy wonks, senior pollsters (I seriously was not worthy) – joined together to break bread in a suitably modest but excellent restaurant, round the back of Victoria somewhere. It was a most enjoyable and illuminating affair.
Heather Jameson, editor of the MJ, asked the guests (about 25 of us) for our predictions for the year ahead. There were a number of very cerebral offerings from some very cerebral people, although most of us (me included) spluttered that making predictions in the political arena was a bit of a mug’s game in this day and age.
As ever, the housing crisis loomed large. Interestingly though, in a forum which was mainly concerned with policy direction and trends, specific criticism was levelled – from several of those present – at the establishment of the Letwin Review into barriers to building.
Sir Oliver Letwin is a shrewd and accomplished politician, but the Letwin Review can only struggle and will never directly hit the target”
The consensus seemed to be that such a review was a rather good idea, but that it needed to have a wider remit, and that the individuals appointed to the review panel, worthy and eminent as they are, were not perhaps the best qualified to comment (I vacillate about all this I have to confess: after all the PM’s housing implementation taskforce doesn’t have anyone on it who knows anything about housing implementation. But hey! It is a still a relief to know that government is working cross-departmentally….).
Sir Oliver Letwin is a shrewd and accomplished politician, who certainly knows his way around. But (whether or not the review team is fit for the task) the Letwin Review can only struggle and will never directly hit the target. Land with planning permission but not built out is but a fraction of the problem. Far more serious is the issue of landbanking, per se. With or without permission.
Of course, private sector landbankers are difficult to reach, at least by a Conservative administration. And, as has long been lamented both in this column and by many rather better informed commentators, the biggest landbanker in this country by far is – oh yes – Her Majesty’s Government.
Another unpalatable truth that we should be grappling with is that of the institutional property speculators. The interests of these “friends of government” sadly do not always align to policy. To take just one example, Legal & General, our biggest institution, makes a complete virtue of owning, according to its own website, “a strategic land portfolio of 3,550 acres stretching from Luton to Cardiff”.
Closer inspection reveals that much of that landbank lies within areas of green belt (L&G is not holding it for its health, so it must be confident of a change in designation). Worse still, many of the L&G locations are close to airports and main roads, and, judging by past performance, L&G’s ambitions for these sites are likely to be less about housing and far more about building new retail and industrial parks.
L&G is totally upfront about its landbank (even calling it a “landbank” on its website) and how it aims to profit from an uplift in the value of its land “Strategic land holdings are underpinned by their existing use value and give us the opportunity to create further value through planning promotion and infrastructure works over the medium-to-long term.”
Another unpalatable truth that we should be grappling with is that of the institutional property speculators. The interests of these ‘friends of government’ sadly do not always align to policy”
L&G always claims to be working in partnership with the government, and tends to deflect too much scrutiny, citing its fiduciary duty, and the protection of little old ladies’ pensions. But if we are serious about cracking the housing crisis then somebody somewhere (even if it isn’t the Letwin Review) should be asking some searching questions – of all the institutional investors – as to what they propose to do with their land. And when.
And in another part of the forest, the Labour party has come up with a proposal to make landowners sell their land to councils at existing use value, so as to ease the housing crisis, saying “The proposal is expected to face strong opposition from landowners, including many pension fund investors, who would be at risk of losing considerable sums on what they expected to receive.”
Which is a proposal that those present at the MJ lunch the other day (Tories and Labour alike) would welcome with open arms. Certainly there could be a massive role for stable and competent (see what I did there?) local authorities to decisively step into the fray on the housing crisis.
The newly repurposed Homes England could be standing behind selected councils to facilitate taking receipt of land, and to empowering swift and responsible housing delivery, whether with a private sector partner, or with a housing association.
Will it happen? Your guess is as good as mine. While predicting anything these days is almost certainly a mug’s game, I would very much hope that we will see some of this in the coming months.
To send feedback, e-mail jackie.sadek@ukregeneration.org.uk or tweet @jackiesadek or @estatesgazette
