On LPAs as master developers

Master developers. Not just developers, but master developers. It is a bit like saying that Mr Miyagi was just proficient in karate. No, he was a karate master. To master something is to be beyond proficient. Masters have acquired complete knowledge and skill.

Master developers are all the rage nowadays. When Oliver Letwin, from the right, and Nick Raynsford, from the left, are recommending that local authorities play a more active role in the development of large sites, and with the emboldened, muscular Homes England getting in on the act, it is hard to escape the conclusion that master development is the zeitgeist.

The master developer role (unkind definition: ‘roads and sewers merchant’, kind definition: ‘place-maker’) has perhaps risen in prominence as a result of two overlapping trends.

Firstly, there has been a maturing of the land promotion model that emerged as a result NPPF1 and the ‘presumption of sustainable development’ when local plans are held to be either out-of-date or the magical 5YHLS cannot be demonstrated. Sites of around 250 homes have emerged as an optimum size to pursue at an appeal because they are large enough to make a contribution to an absent 5YHLS, but not too large as to compromise whatever spatial strategy might be emerging through the local plan. Sites of this size are typically not overly burdened with infrastructure requirements, so the promoter’s consent should be relatively straightforward, and, potentially with two outlets and a three to four year build programme, would also be attractive enough to builders for the promoter to be confident of a prompt sale and a good return on their investment.

At the same time there has been a trend through the local plan process for allocations much larger than the 250 or so homes for which this model of land promotion works well. This data from the HBF shows that whilst plots with planning permission has been increasing the number of sites with planning permission have been plateauing.

The reasons for the trend are myriad, but an important factor could be the political expediency of an ‘all eggs, few baskets’ local plan allocation strategy, especially in Green Belt areas. A garden village on a remote former airfield and a small urban extension to a principle town are likely to generate significantly fewer objections than a broader distribution strategy that brings second and third tier villages into the mix.

These larger sites though bring significantly more challenges. For example, the larger the site the greater likelihood there will be of multiple landowners. Brokering a collaboration agreement between two landowners who like each other is hard enough. Brokering an agreement between six landowners who do not like each other would test the patience of Kofi Annan (families are the worst…). The larger the site the more complicated the planning permission and associated Section 106 and 278 Agreements, which means that the already complicated suite of legal agreements between the parties need to make provision for more eventualities. The larger the site the greater the likelihood also of upfront enabling infrastructure and a longer sales period. Major developments need a more patient form of capital than many players in the field are able to provide themselves and many private players lack the patience to tie the strings that need attaching to public funding.

Large sites, therefore, sort the wheat from the chaff and the website of Urban & Civic, doyens of the genre, makes the point that the skills required to create great places within that business have been accrued over a twenty five year period. Master development does not happen overnight. It is as close to rocket science as planning and development surveyors get.

In Oliver Letwin’s final report on how to close the gap between the number of housing completions and the amount of land allocated or permissioned on large sites in areas of high housing demand it is recommended that the Government should introduce “a power for LPAs to designate particular areas within their local plans as land which can be developed only as single large sites, and to create master plans and design codes for these sites which will ensure both a high degree of diversity and good design to promote rapid market absorption and rapid build out rates."

Can LPAs not already allocate large sites in local plans and create masterplans and design codes that will ensure good design a high degree of diversity? Do local authorities really need clear statutory powers to control the development of large sites through either a Local Development Company or a Local Authority Master Planner, as is Letwin’s recommendation? More sites are promoted through local plans than are allocated in local plans and a LPA can factor into it's selection between them those that will ensure both a high degree of diversity and good design to promote rapid market absorption and rapid build out rates.

If one of a LPAs preferred sites is a viable proposition being promoted by somebody of Urban & Civic’s calibre, then the LPA can proceed with confidence that it can and will be delivered to a high standard over the longer term.

If, on the other hand, one of a LPAs preferred sites is not a viable proposition then there is very clearly a role for Homes England and the LPA to work in tandem to deliver it to a high standard over the longer term. This is where an interventionist and entrepreneurial Homes England can very definitely add value and, encouragingly, it’s recent Strategic Plan includes ‘acquiring challenging sites that the private sector cannot progress without public sector intervention’.

The space in between these two propositions that a LPA could best fill is the viable proposition that is being promoted in a way that might not deliver as successful a place as it could be. This needs initiative, not Letwin's proposal for a new set of planning rules specifically designed to apply to large sites. Consider, for example, the Langley Sustainable Urban Extension (SUE) to Birmingham. In a 47-page Draft SPD published this year only four pages are devoted to delivery and yet it is this aspect that is most critical to the long-term success of this project and the area where the consortium involved need the most leadership from Birmingham City Council. The DPD makes vague commitments to ‘an appropriate delivery model’ needing to be put in place and, for example, a ‘community development and culture programme’. Key infrastructure is identified as being led by ‘Birmingham City Council and the Developer’.

Birmingham City Council is not currently dealing with a developer, let alone a master developer. It is dealing with a consortium of landowners, some families with freehold interests and some builders with option interests. The master developer role suits a very long term time horizon. The horizons of the respective members of the Langley SUE consortium will be much shorter, and with an outline planning application in preparation the foundations for the future success of the scheme are being laid now.

Compare and contrast the dining out experience for early residents of Urban & Civic’s ‘Radio Station’ scheme in Rugby with that for residents of Countryside’s Kingsmere scheme in Bicester that featured in the BBC’s ‘The New Builds Are Coming’ earlier in the year.

At Rugby there is ‘The Tuning Fork’ eatery, “a family-run eatery sourcing local food wherever possible, helping support local jobs and suppliers. It is also a flexible space and is already hosting a range of events for charities and businesses. The neighbouring barn provides additional space for fitness, parent and toddler activities and other community events”.

At Kingsmere, at the time the BBC programme was filmed, there was a Brewers Fayre and a Premier Inn at the entrance to the scheme, and space left vacant for a future community centre (it does look from the Kingsmere website as if work has started on the community centre and a local centre could be occupied by retailers next year). Could sights have been set a little higher? 

‘The New Builds Are Coming’ included a resident complaining about a missing post box, which sounds innocuous enough, but is emblematic of the details that create a place and the details that people care about.

It is in everybody’s interests for those places to succeed, but it seems to me that despite no doubt good intentions on everybody’s part the framework within which they are operating is just not conducive to joined-up thinking. There are too many cracks for seemingly innocuous things like post-boxes to fall between. They probably rang the Council and were told to speak to the builders. They probably rang the builders and were told to speak to the Royal Mail. They probably rang the Royal Mail and were told to ring the Council. That probably went on for months…

There will be a team of project and development managers within a master developer who are charged with spotting potential cracks and filling them. Who will fulfil that role for the Langley SUE? The owners will sell, the builders the build, and people will buy the houses. Who will own the space in between?

The Raynsford Review Of Planning in England (for the TCPA), as Letwin recommends, proposes that local authorities ‘positively shape development by acting as the master developer to co-ordinate change in a timely manner. This means LPAs operating development companies, purchasing land, acquiring land through compulsory purchase for comprehensive development, and commissioning work and forming partnerships with the private sector.

Raynsford proposes that the Government should set out clearly the formula for calculating returns to landowners in viability testing in the NPPF and Planning Practice Guidance (Letwin moots ten times existing use value) and amend the Compensation Code set out in the Land Compensation Act 1961 to make clear that hope value should not form a part of market valuation for calculating compensation payments for compulsory purchase.

I believe in a state purchasing farmland on the edge of a settlement, granting itself development consent, investing in public transport and public services, broadband, and community energy generation and waste disposal before bringing forward and to be paid back from serviced development parcels and self-build plots that are built in accordance with a design code of with the highest architectural and sustainability standards.

I also believe that children are the future and I believe in a jobs-first Brexit.

We all need something to believe in, but the TCPA report exposes the political and legislative shifts that would be required for Birmingham City Council to deliver a Hammarby rather than a Langley. A measured response from MHCLG to the Local Government Select Committee inquiry on land value capture offers an indication as to the likely pace of change in these areas.

In the meantime, and back in the real world, the trends that have led to an increasing appetite from LPAs for larger sites, but a decreasing appetite from land promoters and builders to piece them together and take them on, are likely to continue.

Good builders build good houses and create good places, but cannot be expected to take on responsibility for the stewardship of a new place. This is the space for the knowledgeable and skilled master developer, but their stewardship role can never be entirely altruistic because a key focus will be ensuring that the early success of a scheme generates value for the later phases.

The best way for LPAs and Homes England to add value to the delivery of large sites would be to use new found funds to help make what is not happening, but should be happening, happen, and to help what is happening happen a little more altruistically. In some ways though the clamour from some quarters for new powers for LPAs and for land value capture reform disguise the fact that much of what Letwin and Raynsford espouse could be achieved already. Good planning costs nothing. As Mr Miyagi said, a licence never replace eye, ear and brain.