england is one of the most centralised countries in the world – and one of the few to lack a standard metropolitan tier of governance, outside of london.194 decades
of centralisation have meant that few powers, budgets and responsibilities are really controlled at a local level, despite some recent changes under the localism agenda. the incentives for local authorities to find local solutions need to be stronger, as do the mechanisms for ensuring effective cross boundary collaboration. england’s cities are the engines of its economy and the natural places to lead housing growth. we need to empower them to take a strong strategic leadership role in planning, funding and delivering that growth. housing development depends upon good transport infrastructure to get people to jobs and services. this relationship also works the other way around, as new infrastructure that local people want can be rendered viable by opening up sites for new homes. opportunities for new homes need to be properly considered as part of infrastructure planning and funding – which requires consistency across local and sub-regional planning and budgeting processes.195
city deals, under which central government hands powers and budgets to local authorities in return for them taking on greater
responsibility to stimulate economic growth, could be a very useful innovation in reviving the strategic leadership role of our urban centres. By devolving funding streams they give local
leaders greater power and responsibility to drive change – and explicitly recognise the national economic and fiscal benefits of investing in city growth.196 the last round of
city deals focused largely on jobs and skills, with a little on transport. while these factors are vital for local economies, the government should also incentivise local authorities to work together on larger infrastructure and housing projects by making them central in future city deal negotiations.
one option would be to devolve home and community Agency budgets and
responsibilities to key cities that want to grow, as has already happened in london. this would increase their ability to shape their own places and economies – with the quid pro quo of better cross-boundary planning for homes and much stronger co-operation with neighbouring authorities. the funds that leps can bid for could also be ringfenced for housing and infrastructure.
this proposal is about more than just extra funding: it is also about joining up strategic planning and delivery at the right geographic level. functional economic areas are almost always driven by a city’s location in its wider city-region, so the powers and budgets to solve local issues need to be located at the city- regional level. clearer and stronger leadership will have wider impacts on the local economy by boosting efficiency, market confidence, local accountability and borrowing ability, to name a few.
194 Paun, A. et al - Centralised Power and Decentralised Politics in the Devolved UK (UCL) http://www.ucl.ac.uk/spp/
people/robert-hazell/centralised_power_Sept08.pdf
195 sarling, J. and Blyth, r. - delivering large scale housing – 2013 (royal town planning Institute: london) 196 Unlocking growth in cities, deputy prime minister’s office, hm treasure, dclg, 2011
lessons from abroad suggest that
decentralisation can be a power tool to trigger urban growth and regeneration. In the late 1960s, the french government promoted the importance of the communauté Urbaine, a device to give greater powers to the provincial cities outside of paris. mayoral
Impact on housing supply
modelling the full impacts of properly
integrated city-regional planning is beyond the scope of this report, as each city-region will require its own plan and each city deal will be different. for the purposes of this report we have looked at the central government funding pot open to bids from leps, which is worth £2 billion each year for five years.198
we propose allocating 20 per cent of this pot to housing and infrastructure, ensuring that lep bids bring infrastructure and housing together with other funding streams and plans. this would supply an annual budget of £400 million. In order to estimate how many houses this could help unlock, we need to know how much local authorities would raise from new development in order to fund the necessary infrastructure on a site. charges on grant of planning permission now take the form of the community Infrastructure levy, for which each local planning authority sets its own
leadership and powerful city-regional federations have secured transport and housing investment on a scale that has kept many cities in competition with paris. A similar story can be seen in germany and also the UsA, which both have more powerful city leaders.197
schedule of charges.199 cIl can be charged
for most categories of planning application, not just strategic development, so cIl rates vary widely and may not reflect the full cost of the infrastructure required for strategic sites. to estimate the impact of extra infrastructure investment we have therefore used a proxy for total scheme infrastructure costs, based on plans for development in cambridge. our proxy is £55,000 per unit for infrastructure. 200
Using this benchmark tariff of £55,000 per dwelling and a total allocated pot of £400 million, we estimate that over 7,000 homes could be unlocked through this funding stream each year. In practice we would expect smarter integration of infrastructure and housing funding across functional economic areas to reap greater benefits and unlock key strategic development.
197 hall and falk, Ibid; Institute for government, what can elected mayors do for our cities? 2012
198 http://www.insidermedia.com/insider/midlands/93106-2bn-lep-funding-pot-pays-lip-service-devolution
business-leaders
199 for the latest cIl schedules, see http://www.planningresource.co.uk/article/1121218/cil-watch-whos-charging-what 200 falk, Beyond ecotowns: the economic issues, 2008