Budget 2011: Planning changes: A hidden job killer?

Ed Turner, lecturer in politics at the Aston Centre for Europe, and deputy leader of Oxford City Council, looks at the impact of the changes to planning announced in yesterday's budget.

Ed Turner is a lecturer in politics at the Aston Centre for Europe, and is also deputy leader of Oxford City Council; the views expressed here are his own

With the big debate, quite rightly, being about the overall direction of government economic policy, and an important sideshow going on about petrol prices, it’d be easy to overlook the possible changes to planning that have been announced in the budget. But some of these are potentially very significant indeed.

There is to be a “presumption in favour of sustainable development”, which will increase the chances, other things being equal, of planning applications getting passed.

If anyone knew what definition of sustainable development was being used, this might be a good thing – although it does sit rather oddly with the Conservative party’s pre-election soothing of NIMBY lobbies, culminating in the infamous Spelman letter, encouraging councils to put on ice housing schemes they didn’t want to pursue.

There is an interesting prospect of local land auctions, and there’s a move away from the national target to favour previously-developed sites for new developments (which may well cause the green lobby some concerns).

But probably the biggest potential change is the consultation on relaxing “use class” controls, so that it will become easier to change commercial buildings to a residential use.  This sounds enticing – after all, who could reasonably argue with the government’s stated aim of “making it easier to change vacant offices into new homes”?

In fact, this innocuous-sounding measure could cause significant economic, environmental and social damage.

First, the economic: simply put, this could be a job-killer. In places with high house-prices, land is worth significantly more for residential than employment uses. So it will be in the interests of the owner of commercial land to seek a swift change of use to residential, net a nice profit, and the employment use will have to go elsewhere (whether a different part of the country, or even abroad).

Local councils often try to preserve a balance between employment and housing, and also between different sorts of employment (such as between manufacturing and the service sector): their ability to do this will be fatally undermined.

Suggestions that we are only talking about changing empty commercial buildings are, of course, a red herring: even if a building had to be empty for a period of time, differences in land values are such that owners may well evict the commercial user and leave the property empty until a change of use is permitted (blighting the area in the interim).

It’d be like running down a pub, leaving it empty for a bit, and then applying for a change of use when there will be less local opposition – but on a far grander scale.

Secondly, the environmental: if an area gets the balance between jobs and homes wrong, this can lead to more commuting, with an adverse environmental impact. Moreover, some employment sites are simply crassly unsuitable for housing (even if their land value for the housing is higher than for employment) – for instance, due to high levels of air pollution.

Would it really be in anyone’s interests to stop planners having a veto on putting residential accommodation in a disused warehouse next to a smoky factory?

Thirdly, the social: unless councils have the power to levy a charge on changes of use, new homes will appear without the necessary infrastructure (for instance, schools and leisure facilities). As things stand, changes of use need a planning application, and investment in such facilities can be required – but if the requirement for a planning application goes, so does the ability to require investment.

Moreover, these plans might actually lead to the demise of valuable facilities to a community (such as local shops and pubs) if their land value is lower than it would be with residential accommodation on the site.

It’s no secret that the Treasury has frequently found itself frustrated with the planning process and even the profession. It is right to be angry at the shortage of housing, and the planning process has to take its share of the blame for that.

But as with the rest of the government’s planning agenda (such as canning Regional Spatial Strategies, which has stopped more than 200,000 homes being built – and then deciding that it’s the champion of new house-building), this appears to be a case of acting first, and only bothering to think about the consequences later.

This area of policy needs a lot more thought before changes are introduced.

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