Update – May 2017

General Election Update

We are now only two weeks away from polling day and the formation of a new Government. The polls, commentators and just about everyone else (barring John McDonnell) think Theresa May and her ‘team’ will end up with a ‘Thatcher style majority’. Indeed, recent polling by YouGov demonstrates that there are only two regions in the UK where Labour are ahead of the Conservatives: the North East where the Tories are polling 40 percent compared to Labour’s 42 percent and London, where the majority of Labour’s leadership is based.

Theresa May’s election launch in Bolton and her speech in the North East last week shows how far the campaign front line has moved. Labour and the Conservatives are not squabbling over middle England anymore. Instead, Mrs May is wooing traditional working-class voters in a way that is reminiscent of Margaret Thatcher nearly 40 years ago.

Meanwhile, Jeremy Corbyn’s team are struggling to keep up. They are not nearly as ‘on-message’ as Team May. Whilst they might think that announcing a new policy every other day demonstrates an exciting campaign that is moving forward, Theresa May’s team parroting of the same phrase over and over again will has cut through more effectively. Message discipline during a short campaign is of paramount importance and Labour’s tactic only demonstrates the amateur way the Labour Party is being led.

So far the biggest mistake by either party seems to have been the leaking of the Labour Manifesto – and key members of Corbyn’s team refused to answer any questions about it until it was officially launched. The crude manner in which it was leaked suggests that it may have been a Corbynista, who felt they had the most to gain from the public seeing it in its original, unedited, form.

It seems that the question is not who will win the next election, but how big will the Conservatives’ majority be? Mrs May is playing up the personal, a stark reminder that she is far more popular than her party and that Jeremy Corbyn is far less popular than his. Furthermore, the Conservatives look set to be the second largest party in Scotland. Voters in Scotland now see the Tories as the party best placed to stand up to the SNP and prevent independence.

The other question is where does this leave Sadiq Khan, Labour’s Mayor of London? He will no doubt want to defend his city and prove that the mandate he got elected with last year is still as big as ever. However, many of the Labour MPs who will be re-elected are likely to be Corbynistas, and he is not at all friendly with them. This puts him in a particularly tricky situation.

The outcome looks certain, but the intricacies of it mean that the future of Britain is not as strong and stable as one might think.

Conservative Manifesto

The Conservative Party launched their manifesto last week. In the two years since the last election, housing (and planning) has plummeted in importance with no mention in the five key priorities until the last gasp in the Tory manifesto.

The headline pledge from the last Tory administration has been retained – the plan to build one million homes by 2020 – and has now been supplemented with a further 500,000 to be delivered by 2022…. Obviously ambitious, this promise is supported by pledges to help pro-development councils to build their own new homes and a use it or lose it clause for developers on approved schemes. The conservatives will also make the reforms outlined in the Housing White Paper.

As ever, electoral politics prevail with the commitment to protecting Green Belt land ever present.

So the manifesto contains no new money and no huge new ideas, but the commitment (albeit limited) to help authorities build new housing stock will be welcomed while the progress of use it or lose it powers will have to be watched. Its only after the election we will see who is put in place to deliver this programme – and it will only be then we will know what weight the subject is really being given. All indications are that it won’t be Sajid Javid in the hot seat!

Conservative’s Housing Policies In Brief

• Deliver one million homes by the end of 2020; and a further 500,000 by the end of 2022
• Give councils power to intervene to prevent developers ‘landbanking’
• Supporting ‘high quality, high density’ housing (Mansion blocks, mews houses and terraced streets)
• Building 160, 000 homes on government land
• Protecting the Green Belt, National Parks and Areas of Outstanding Natural Beauty
• Support housing associations to increase specialist stock for older people
• New ‘Council Housing Deals’ with ‘ambitious, pro-development’ local authorities
• New ‘fixed-term’ social housing sold privately after 10-15 years and automatic Right to Buy for tenants
• Reform of Compulsory Purchase Orders to allow quicker sale of land
• Continue existing £2.5billion flood prevention programme to benefit 300,000 homes by 2021
• Existing commitment to Housing White Paper reforms to free up land in the right places for homes is maintained

Local Election Update

Did you miss the local election results? We have summarised the results for each county in our operating area for your reference. Click here to view results in Norfolk, Suffolk, Cambridgeshire, Essex, Hertfordshire, Buckinghamshire, Berkshire, Surrey, Hampshire, Sussex and Kent, as well as the Cambridgeshire and Peterborough Mayoral elections.

Council Mergers

Forest Heath and St Edmundsbury councils are planning on joining to become a unitary council.

The two councils in West Suffolk currently share services but split members of staff. Both leaders of the two councils are positive about the merger and have said that they already work together closely. They are looking forward to creating a bigger and better local body, which should be more efficient after they join.

The final vote to create this new unitary authority will be in September of this year, and discussions and finalisations will take place throughout 2018. They are looking to finalise the deal in time for 2019. It will affect the way that people living in Newmarket or Haverhill vote in the next local elections in 2019. In an online poll, people have currently voted 70 per cent for the two councils becoming a unitary, with only 30 per cent disagreeing. However, John Griffiths, leader of St Edmundsbury Borough Council stated, “I think most people care more that we are delivering services in the most effective way than they do about council structures.” This suggests that he believes the change will have a positive impact on the communities, but recognises that the majority of people care more about effective delivery of services from the council.

Other council across the country are looking for similar changes. In Oxfordshire there is an ongoing debate about unitary authorities. Oxfordshire County Council has jointly with South Oxfordshire District and Vale of White Horse District Councils proposed a ‘Better Oxfordshire’ unitary authority. However, Oxford City Council, Cherwell District Council and West Oxfordshire District Council have submitted an alternate bid to the Department for Communities and Local Government. When looking at the figures, the single unitary bid the Government is more likely to approve the Better Oxfordshire scheme as the savings it delivers are greater.

It does seem unlikely that Conservative ministers are going to want to get involved in a battle in one of its traditional strongholds, particularly when Oxfordshire County Council has failed again at achieving overall control of the council.  Locally, this scheme has not received the positive response that the West Suffolk councils have, as the councils do not currently work together, which has created hostility between some of the local bodies.

The unitary debate is indicative of the climate across the UK as local authorities across the country look at alternative ways to maintain the local services they provide with increasingly reduced budgets. There does appear to be a consensus that the county/district model is a waste of money and many unitary debates are taking place. We will wait to see what other ways councils can come up with to save money, whether that be unitaries, controlling shopping centres or participating in local lottery funds.

CLG Select Committee Calls for Significant Reforms to House Building – But Will No.10 Act?

The Communities and Local Government Committee report published over the early May bank holiday weekend (burying bad news?) has called for government backing for smaller house builders and suggested the sector is too reliant on large developers. The report begins with a damning statement: ‘We found a home building sector that is dominated by the biggest companies. The eight largest firms build more than half of all new homes, which means we are overly reliant on an alarmingly small number of commercial actors’.

Although the number of planning applications for new homes rose last year, these homes were being built on fewer, larger sites. In 2008, small house builders (who build 10-100 units per year) had a 28% market share but by 2015 this had dropped to just 12%; in contrast, volume house builders (who build 2000 or more units per year) saw their market share increase from 31% to 59% between 2008 and 2015. It is thought that banks being more cautious with regards to lending could at least be partly responsible as smaller house builders are perceived as being riskier to lend to. Therefore, the Committee has argued for the government to step in to support smaller firms so that the industry does not become overly reliant on just a handful of big names.

Sarah McMonagle, Director of External Affairs at the Federation of Master Builders told the CLGC in their investigation that it was a lack of sites suitable for small housing developments which was the main barrier to SME house builders increasing their output. Local authorities have tended to prioritise identifying larger sites in preparing their Local Plans as this is less resource intensive than finding many small sites. However, an unintended consequence of this is that it locks out smaller house builders from being able to purchase and develop land.

The committee welcomed an amendment to the Neighbourhood Planning Bill which aims to make it easier for local authorities to set up public interest companies that can acquire land, secure planning permission and work in partnership with a developer to provide housing. It is thought that this model could deliver more money to local councils, which could be used to provide the necessary infrastructure to accompany the development. The Home Builders’ Federation (HBF) said it supported measures to help smaller house builders however firms of ‘all sizes and specialisms’ are needed to tackle the UK’s ‘acute housing shortage’.

The report acknowledges the shortage of housing in the UK is not due to so-called ‘land-banking’ (purchasing land but not developing it in order to artificially increase house prices). The Housing White Paper unveiled in February promised to clamp down on land-banking, yet the industry maintains it is local planning authorities’ red tape which prevents them building homes quicker. Now that the CLGC have found ‘no evidence’ of land-banking occurring, will we now see the government turn their attention to speeding up the planning process? Only time will tell, however No.10 is likely to be more focused on the upcoming snap General Election and Brexit negotiations for now – any significant reform to the planning process is likely to be some way away.

Train Strikes Affecting House Prices

It is not just rail passengers who have been affected by 12 months of industrial action by Southern Rail guards. New analysis from property website Zoopla has found that 91 per cent of towns along the Southern Rail network have experienced a house price slow down. The biggest drop in year-on-year growth since the strikes began was near Harrow and Wealdstone station where annual growth has fallen by 18.5 per cent. Across the Southern Rail network, house price growth fell from 9.11 per cent (April 2015-April 2016) to 3.01 per cent (April 2016-April 2017).

Houses are also taking longer to sell since the industrial action began. In Tonbridge, properties are taking two weeks longer to receive offers than the regional average. Prospective buyers appear to be avoiding towns served by Southern in order to avoid the well-documented disruption to commuters over the past year. There appears to be no end in sight either, as the next 24 hour strike is due to take place on Tuesday 30 May and further industrial action has not been ruled out.

The Rail, Maritime and Transport (RMT) union began industrial action in April 2016 over the extension of driver-only operated doors on Southern trains. RMT members have so far taken 31 days of strike action, claiming that it is dangerous for drivers rather than guards to operate train doors. Train drivers’ union ASLEF also joined the dispute in December 2016 and rejected a deal from parent company Govia Thameslink Railway last month.

PD Drilling Rights

Below is an extract from yesterday’s Conservative Party Manifesto announcement giving encouragement and technical support to those companies wanting to explore the possibilities of fracking in the UK:

The discovery and extraction of shale gas in the United States has been a revolution. Gas prices have fallen, driving growth in the American economy and pushing down prices for consumers. The US has become less reliant on imported foreign energy and is more secure as a result. And because shale is cleaner than coal, it can also help reduce carbon emissions. We believe that shale energy has the potential to do the same thing in Britain, and could play a crucial role in rebalancing our economy. We will therefore develop the shale industry in Britain. We will only be able to do so if we maintain public confidence in the process, if we uphold our rigorous environmental protections, and if we ensure the proceeds of the wealth generated by shale energy are shared with the communities affected. We will legislate to change planning law for shale applications. Non-fracking drilling will be treated as permitted development, expert planning functions will be established to support local councils, and, when necessary, major shale planning decisions will be made the responsibility of the National Planning Regime. We will set up a new Shale Environmental Regulator, which will assume the relevant functions of the Health and Safety Executive, the Environment Agency and the Department for Business, Energy and Industrial Strategy. This will provide clear governance and accountability, become a source of expertise, and allow decisions to be made fairly but swiftly. Finally, we will change the proposed Shale Wealth Fund so a greater percentage of the tax revenues from shale gas directly benefit the communities that host the extraction sites. Where communities decide that it is right for them, we will allow payments to be made directly to local people themselves. A significant share of the remaining tax revenues will be invested for the benefit of the country at large.

This all appears very encouraging for the industry. Having PD rights for test drilling will accelerate the process of finding where the oil and gas is before having to embark on very detailed planning and local consultation processes. The statement makes it clear that environmental protection will be paramount, but also that the wealth created will be shared with local communities.