Budget November 2017

During his presentation of the Budget 2017 to Parliament, chancellor Philip Hammond announced his willingness to “build a country fit for the future” with the planning regime and the shortage of housing being clearly the focus.

Hammond’s apparently “ambitious” housing plan includes £44bn of capital funding, loans and guarantees to boost housing supply up to 300,000 homes a year by the mid-2020s. How the government gets to this target is not clear.  As predicted, the talk in the press was of green belt reform but this has melted away. In tune with the fundamental principles of the planning system for decades, the chancellor talked about changes in planning laws proposing high-quality and high-density homes in urban areas but not in the green belt. We await announcements on these changes.

In terms of detailed funding, the chancellor promised a new SME housebuilding fund, £2.7bn to more than double housing infrastructure land, £1.1bn to “unlock strategic sites” as well as £1.7bn “transforming cities fund” to boost growth beyond London. He also committed to build up to 1m homes in the Oxford-Milton Keynes-Cambridge arc by 2050 in accordance with last week’s National Infrastructure Commission report.

The “urgent” review of the gap between the plots with planning permissions and those that have not been developed (land banks) was another point made by the chancellor. He said that the government will address the issue by giving local councils “the power to charge a 100% council tax premium on empty properties”, if the properties are found to be vacant for commercial rather than technical reasons. How overstretched LPAs will take on the extra challenge of chasing these breaches with no extra funding will be interesting.  

The abolition of the stamp duty was the most eye-catching change announced by Hammond, as first-time buyers of homes up to £300,000 will not pay the stamp duty and it will be waived on the first £300,000 of a home in capital up to total value of £500,000 to help those buying in London. However, London mayor Sadiq Khan accused him of not announcing extra grants for affordable housing in London – “even though the current spending is less than a fifth of what is needed”. The London Plan is eagerly awaited.

Hammond, instead of acting on the recommendations from the CIL Review Panel, talked about removal of the section 106 pooling restrictions in some circumstances and changes to the Community Infrastructure Levy (CIL) to allow authorities to “set rates which better reflect the uplift between a proposed and existing use”. Again, how this works in practice will need to be monitored.

Following the Grenfell tower disaster, a further £28m has been allocated for mental health services, regeneration support for the surrounding areas and a new community space. The applications themselves will need to be handled with great care.

Finally, the chancellor promised £400m charging infrastructure grant for electric cars and a new £220m Clean Air Fund. Planning permissions for electric charging points will grow. The Clean Air Fund does not look sufficiently substantial to make a significant change.

Hammond’s speech was criticised by the president of the Royal Town Planning Institute, Stephen Wilkinson was downbeat in noting the chancellor “has missed the chance to tackle the dysfunctional land market which is the fundamental cause of the housing crisis, when he could have introduced measures to capture the increase in land value for public good or make it easier for councils to compulsorily purchase land”.

It was an uninspiring budget for planning though the strategic sites fund and promise to build 1m homes in the Oxford-Milton Keynes-Cambridge arc is encouraging.  

Authored by Michaela Kekeri 


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