Planning, building and the economy

May 29 2022
Planning, building and the economy

Planning Matters, by Chris Gosling

WE are all currently experiencing a crisis, another in what seems like a never-ending string of them. This time it is the cost of living crisis, prompted by inflation rates hitting 9% and forecast to go into double figures, which is not much different.

Even if inflation disappeared altogether, we will still be living with the 9% increase that has already happened over the past year. That means that a few years of pay increases would be required to make up the difference over the last year, in the best case. That is of course only a possibility if you are working.

In the same way as pay rises are averaged out across the whole population, masking winners and losers, the same happens with inflation. Among the current biggest losers (in comparative terms) are those who are buying or looking to buy building materials. Coming out of the worst of the covid crisis (that word again), delays in production and supply chains led to price increases of 40% or more for timber. This has spread to other materials, as supply fails to keep up with demand worldwide.

That is the immediate context in which the recent Queen's Speech put forward the government’s legislative aims for the remainder of this parliament’s term. The Planning Bill, which went out of fashion due to by-election swings against the government, has now been lumped in with the 'Levelling Up' agenda. We now have some idea what levelling up means – providing opportunity regardless of geography seems to be the latest definition. But planning tends to follow the money rather than distribute it, which is the form levelling up has to take if it is going to have any effect.

There is very little available detail on the ‘reformed’ planning reforms, except one of them – the Infrastructure Levy that will replace the Community Infrastructure Levy.

This is set to be trialled in a few council areas to see how it works and make changes before a nationwide rollout.

This illustrates not just a lack of detail but also a lack of vision driving government policy. I can’t be entirely critical, as trying something out before committing the whole country to it does give a chance to resolve teething problems. However, I can’t imagine many hard-pushed councils will be volunteering to take part in this grand experiment.

For now what we know is that there will/may be changes to planning, only we don’t have much idea what they will entail.

We do know that inflation is set to continue and there is every chance that the economy will descend into recession, and the building industry is likely to feel it first.

It will most likely start with an increase in mothballed and cancelled orders; that doesn’t necessarily mean that the cost of building will decrease significantly.

This is the climate in which the left-behind areas will need to be levelled up. A difficult enough task is going to get more difficult still, and planning has now been put under the same heading.

Maybe that was more by luck than design. And not necessarily good luck.