Summer no longer seems to herald the traditional dip in activity that our continental neighbours enjoy. It has, once again, been an extremely busy month.
Housing undersupply remains at the top of the domestic political agenda, with Sir Digby Jones using his last major conference speech as Director General of the CBI to recommend that four million new homes be built in England by 2020. Just two days before, the ODPM Select Committee (to which HBF gave evidence) warned that the Government may have to revise its housing plans upwards.
Major policy issues
Barker Review of Planning System
Kate Barker announced the interim findings of her review into the planning system on 5th July. She acknowledges the role that housing developments play in stimulating economic growth and calls for the planning system to be more flexible in allowing greater labour mobility. Despite significant misgivings about the current set-up, she also acknowledges that there is little appetite for wholesale change, and that her final recommendations will focus on making the existing system better. Her final report is scheduled to be published at the end of the year.
Planning-gain Supplement (PGS)
The work of HBF’s PGS Working Group, chaired by Berkeley Chairman Roger Lewis, continues to consider practical ways to make the Treasury’s proposed PGS a workable tax. Our interim suggestions will be discussed with Treasury officials before any firm conclusions are drawn. A further PGS consultation is expected with the Pre-Budget Report in November or December. HBF, jointly with the BPF, CBI and RICS, has commissioned research from Knight Frank to examine some 20 case studies (residential, commercial, industrial) to highlight potential problems and quantify likely PGS revenues.
Affordable Housing
In view of the importance of this area, HBF is setting up a high level working party to debate a new policy approach. DCLG and Treasury officials are reviewing affordable housing policy and have indicated they would welcome positive suggestions for reform from HBF.
S106 Research
The DCLG recently published an academic study of S106 agreements, which concluded that only 40% of ‘major’ (10+ dwellings) residential permissions had a S106 agreement in 2003/04. We regard this as a highly questionable conclusion.
John Stewart subsequently raised a number of concerns about the research methodology which officials have now accepted as legitimate. They have agreed to brief Ministers accordingly. This is an important achievement because, based on the research, Ministers appeared to have concluded that many planning authorities were failing to make maximum use of S106 agreements, and that substantial land value was available to be tapped for Affordable Housing, other S106 demands and the PGS. I have also asked members of the Majors and Metropole Group to send me company data on the proportion of permissions without a S106 so we can submit hard evidence to the DCLG and Treasury.
PPS3
Contrary to previous indications that PPS3 would be published in July it has been confirmed by DCLG officials that the publication will be delayed until September, at the earliest. This is principally due to DCLG wishing to consider further issues of size and type and density. We have been invited to continue dialogue with officials over the summer.
Home Information Packs (HIPs)
The revised HIPs regulations were recently submitted to Parliament and are unlikely to be changed further. We now await an announcement – expected in July – of the location and arrangements for the first regional trials due to commence this autumn. We continue to work closely with all the other key parties interested in HIPs and will press Government for proper assessment of the trials and their effect on the market.
Political contacts
I am meeting Ruth Kelly on 11 July and will report separately on the outcome.
I met Michael Gove, Shadow Housing and Planning Minister, again on 29 June. We discussed the continuing problems connected with the Thames Basin Heaths Special Protection Area – on whjch Mr Gove remains very supportive, - our thinking on key environmental issues and home information packs. I am keen to develop our dialogue with the Conservative front bench team further and we have agreed to meet on a regular basis.
Industry issues
Customer Satisfaction
The HBF Customer Service Code of Conduct has been sent to all members. Further detailed results of the Customer Satisfaction Survey have been provided to participating companies. The next set of results will be published in spring 2007.
We wrote to the OFT on 6 April submitting our draft Statement of Principles for Unfair Terms in Consumer Contracts and setting out in some detail the reasons why we preferred that approach rather than the OFT’s request for model contract terms.
Disappointingly, the OFT has rejected the Statement of Principles approach, expressing concern at the HBF’s perceived lack of progress in implementing Barker recommendation 32. HBF is now reviewing its position, which was discussed by the HBF Board on 20 June and will be considered shortly by member legal directors.
House Building Industry ‘Business Model’
Ministers and civil servants across Government (Treasury, DCLG, EP) have repeatedly expressed concern about whether house builders’ ’business model‘ will enable the industry to deliver 200,000+ quality homes. HBF is preparing a paper for Yvette Cooper preparatory to a meeting (date to be agreed).
Barker 33 MMC Legacy Body
The Barker 33 MMC Cross-industry Steering Group final report recommended the establishment of a “legacy body” to implement the report’s recommendations.
DTI and DCLG officials support such a body, favouring a joint venture between HBF and the Housing Forum. They also want the body to encompass within its remit the recommendations of the recent NAO report on MMC, the NAO KPI study (see below) and the findings of the Design for Manufacture (£60,000 house) competition.
To be successful, I believe this body needs to begin with some measure of current adoption of modern construction methods and set an achievable target and timetable. We shall also need to identify a suitable person to chair the legacy body.
Thames Basin Heaths Special Protection Area
The key requirement for making progress remains an improved evidence base enabling us to counter English Nature’s position. While it is welcome that five local authorities are seeking to adopt “mini-delivery plans” to provide some relief, our own research and that commissioned by the DCLG will be critical if we are to achieve a sound and workable solution.
Meanwhile I took the opportunity to press the Government side once again for effective and urgent action at a HBF meeting with the Government Office for the South East, DCLG and other stakeholders on 29 June.
South West Housing Initiative
HBF co-sponsored a successful South West Housing Initiative Conference in Bristol on 26 June, which was well attended by members. The Initiative is building its profile and I believe it is helpful for HBF to demonstrate to politicians and others in this way that it can help assemble a wider coalition of housing and business bodies to make the case for a better housing supply.
Planning issues
Regional spatial strategies
Regional Spatial Strategies dominate the planning landscape. The draft North West RSS sees an appetite for increased housing, particularly compared with previous documents. We hope that the recent lack of housing growth will be addressed, with greater flexibility for local plans being granted.
HBF’s South West RSS submission will lobby for household projection figures to drive increased housing provision, whilst seeking to temper local environmental performance targets for new houses.
The Panel report on the East of England Plan was published in late June. The report recommends an increase in housing provision from EERA’s submission for 478,000 dwellings over the period 2001-2021 to 505,500 dwellings. However, the Panel has been very clear that the phasing of these dwellings should increase above the rate achieved in the period 2001-2006 (22,000 dpa) to over 26,000 dpa for the next 10 years with a further increase beyond 2016.
The panel criticised EERA’s conditional approach towards growth based on the provision of identified infrastructure proposals, and has recommended the production of a clear implementation plan for the strategy.
The report will now be considered by the Secretary of State before the formal publication of modifications to the plan, expected before the end of the year.
Changes to the Development Control System
From 10 August, the majority of planning applications will need to be accompanied by a design and access statement. CABE have published a guidance note on their recommendations on what such statements should contain. HBF and the Planning Officers Society, in conjunction with the Planning Advisory Service, will be holding a series of regional seminars on Design and Access Statements and Pre Application Consultation in the autumn.
Technical issues
Building Regulations Part B
Responses to the consultation have been published on the DCLG website. The amendments will come into force in October this year.
Water conservation
We understand that the consultation will be published at the end of July for implementation in April 2007.
Innovate for Homes
Five companies made presentations to the Developers’ Panel with details to be published shortly. Second round applications have started with energy and water conservation applications particularly valued.
Waste
HBF’s proposals were not included in DEFRA’s consultation on waste, with no progress on the National Brownfield Strategy. Discussions with stakeholders are currently offering hope that a better system of waste management will result.
Code for Sustainable Homes
Details remain sketchy, but compliance with Building Regulations will not now be sufficient to reach the first level. It has been stated that an approximate equivalent of EcoHomes 2006 Very Good will be required for Level 3, with more details expected in the autumn.
Utilities Questionnaire
An HBF members’ questionnaire on levels of service provision is being analysed, with the results being taken to the government as a priority.
So once again, it has been a full and productive month. For your information, I will not be sending out an update next month, but will include all relevant news and information in our September letter. Please do contact me or my senior management staff at any time if you want to raise issues of concern.
Yours sincerely
Stewart Baseley
Executive Chairman