Uncertainty May Create a Long Road to Recovery for Construction

Adrian Aston suggests that the government needs to address many of the uncertainties that have been created by proposed reforms to the planning system and regeneration mechanisms to help the industry assess the outlook and determine how long the road to recovery may be.

The CSR has answered a lot of questions but many remain unanswered and not just in terms of where the cuts will fall but how public sector projects will be procured, what will the planning regime look like and how will regeneration be encouraged and managed in the regions.

Many who work within the planning system have voiced their objections over the proposed changes. Bodies such as the Chartered Institute of Housing, National Housing Federation and the Town and Country Planning Association have all expressed concern over the scrapping of the regional planning strategies.

The planning system should offer a framework to deliver the government’s objectives in terms of the economy, the environment, sustainability and social policy. At times these may produce conflicts that need to be resolved and both the local agenda and the national strategy need to be considered.

The government’s reforms aim to allow communities to shape their neighbourhoods and share in the benefits, which nobody can deny is a laudable one. In reality what is needed is that the people making the decision should understand what the development process is about, which is creating business in an area. The decisions they make can hinder the business process unnecessarily because of the application of some indiscriminate rule or the ticking of a standard box.

Time and time again we have been involved in projects that are delayed unnecessarily by an unrealistic planning demand that costs the developer time and money.

Whilst not all planning issues are about commercial development, with the cuts in public spending the government will be looking for the private sector to generate growth.

These developers will need the regional support that used to be provided by the regional development agencies. The West Midlands region now has an approved LEP bid that is set to take over the duties of Advantage West Midlands but how this will be achieved is still very much embryonic.

In the current financial climate, regeneration schemes need all the help they can get. For many there are too many financial hurdles that need to be overcome for the development to make economic sense. One new initiative that was confirmed in the CSR should encourage commercial development, Tax Increment Financing. This is a funding mechanism where councils fund infrastructure by borrowing against future business rates income.

TIF has received much support from the property and construction industry. The BPF has been lobbying the government since 2008 and produced a report that looked at the US experience and the advantages and disadvantages of the approach and how it could be introduced into the UK.

Details have not yet been released about how these will work so at the moment it is just a commitment to introduce the mechanism.

So for the construction and property industry the detail remains an all important key to how quickly they will be able to respond to the changes and deal with the cuts so that the recovery can begin.