GE24: Can the construction industry deliver Labour’s new towns?

Delivery of Labour’s new town ambitions would require clear pipelines of work, a radical approach to planning and innovative funding routes, key industry figures have warned.

Shadow housing secretary Angela Rayner said in a speech at the UK Real Estate Investment & Infrastructure Forum in Leeds this week that she was determined to help “solve” the housing crisis.

If Labour is elected, the party would bring back local housing targets and usher in a wave of development on the edge of existing conurbations, she said.

“An expert independent taskforce will be set up to help choose the right sites and a list of projects will be announced within our first 12 months of government, so we can start building the towns of the future within months,” she said.

But experts say that promises are one thing – delivery is quite another, with a number of challenges to getting spades in the ground.

Speed is of the essence to Labour’s development ambitions, with Rayner saying she wants homes on certain sites within the first term of a Labour government. 

The “large settlements” would also feature “public transport and public services, from doctors’ surgeries to schools”, she promised.

Richard Beresford, chief executive of the National Federation of Builders, said “grand promises” were par for the course in the run-up to a general election.

But he added: “Labour’s clear and sustained signal on housing delivery and planning reform tells voters they are not afraid to be bold.”

Talking to the industry

Rico Wojtulewicz, head of policy at the trade body, said Labour would have to “talk to the housebuilding industry as often as possible” if elected, to understand the barriers it faces.

If this conversation happens, developers would explain what was required to bring forward new towns at pace, he added.

“Labour would need to make a central or regional body the planning authority, taking powers away from councils,” said Wojtulewicz.

“This could be done with a new towns policy, which may take some time to vote through, or by using Homes England. A level of planning reform would be needed to remove onerous conditions and frustrations caused by statutory consultees.

“They would then likely need to alter existing policies on nutrient neutrality and biodiversity net gain, as mitigation could take years to agree and cost hundreds of millions of pounds.”

Capacity challenges

Capacity challenges across the construction sector among housebuilders and the contractors required for infrastructure and community facilities would have to be addressed, he added.

“It would likely take a full parliamentary term to train enough British workers to deliver the new town ambitions. In the early days foreign workers would be needed to plug the gap.”

David Atkinson, head of development at Willmott Dixon, said ensuring the industry had the capacity to meet the challenge required a long-term pipeline of work.

“If it is done in an ad hoc, piecemeal way, you won’t get the investment in skills needed to deliver it.”

Financial aspects also had to be considered, he said.

“We need innovative ways to fund delivery. Are we looking to the government or the private sector? Think outside the box. Should local government pension funds be investing in new towns in their districts?”

Atkinson welcomed Labour’s ambition but stressed it was critical that the detail was “resolved at the outset”.

“Solving the housing crisis is not about a one-off policy,” he added. “You need a comprehensive strategy covering skills, funding and sustainability. I would love to see planning reform, de-risking by the state to make everyone’s lives easier.”

Atkinson also called for the next government to think laterally about where to locate new towns.

“They don’t have to be built on disused airfields in the middle of nowhere, with sprawling streets of two-storey housing. They could be apartment blocks that regenerate a former industrial site in a city,” he suggested. “Planning would be easier and you would be closer to jobs and transport links.”

Industry collaboration

If well-executed, Labour’s plans could create a solid workstream for various sectors of the construction industry, he added.

“The only way you can deliver schemes of this scale well is to bring in experts from different delivery models. Big housebuilders don’t want to do civils or schools, it doesn’t fit their model. You need the specialists.”

Lawrence Turner, director at planning consultancy Boyer, described Rayner’s new towns plan as “bold and ambitious”.

But he added: “The task of creating new towns and developing housing at such a rapid pace is not without its challenges. The political hurdles that come with development on the edge of settlements and the release of greenbelt have [made it] very difficult for the incumbent government to deliver.

“It is also vital that Labour works with the private sector to fund the development of these new towns.”

But despite his warnings, Turner concluded positively about the policy.

“By creating a positive environment for developers and ensuring that land values reflect the need to build affordable housing, new towns can make significant progress in addressing the housing crisis,” he said.

Steve Turner, executive director at the Home Builders Federation, said new towns represented a “unique opportunity” to build new communities but “inevitably take many years” to deliver.

“Alongside the longer-term proposals, we urgently need shorter-term interventions,” he said, backing Labour policies to reintroduce local housing targets and declassify some parcels of greenbelt land, and calling for utilities to be brought on board quickly.

“Within 12 months the locations and delivery mechanisms need to be identified. Realistically, for early phase homes to be built within five years, you would be expediting locations in stalled local plans.”

Barry Jessup, managing director of Socius, said the developer supported Labour’s plans to “unlock development and delivery of affordable and high-quality housing”.

But he added: “For new towns to be economically sustainable they must be connected to cities and there must be an investment in infrastructure.

“Mono-use places do not work and we need a mix of housing, workplaces, education and community amenities to ensure the long-term sustainability of places and the positive social impact on communities.”

Rayner promised a “new towns code” that developers would be required meet in the new settlements, along with strict new rules for land release from the green belt.

She said the criteria that would be imposed on new towns would include: 40 per cent of homes to be affordable; transport links to town and city centres; and guaranteed public services, including doctors’ surgeries and schools.

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