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Government Left Hand and Right to Meet and Talk???

The strange war between Vince Cable and Eric Pickles is currently being waged on various battlefields. The proposal, currently out for consultation, to amend the Use Classes Order to allow offices, factories and warehouses to be turned into housing is one of these battles.

On the face of it the idea of allowing house builders to buy up Prime Ministerial Growth Policy poster children like Silicon Roundabout in London’s Shoreditch sounds like a career limiting proposal from Pickles.

Savills recently reported that residential land was the most viable land use, even in the City ofLondon. They went on to say that ‘with the proposed changes to use class legislation making B1 (office) use and possibly other commercial use classes instantly convertible to residential use, it will become increasingly difficult for commercial developers to compete with residential in London.’

Behind these proposals we can see the serried ranks of commercial property owners (whose property value will increase) and house builders (whose land cost will reduce and supply of sites increase) and even perhaps the bankers (who will see another way to exit from unwanted ‘investments’). These people have already shown their ability to influence Government policy through the unexpected business promoted amendments to the Localism Bill creating the so called ‘Tesco Plans’.

Interestingly, the last blog here seems to have produced a negative reaction from business interests although unfortunately in the form of private approaches to me rather than comments online where they could be debated. If this blog suddenly disappears you will know what has happened! The business umbrella organisations really earn their crust in these situations by providing cover for the less publicly palatable views of individual firms.

And of course these ideas appeal to the rampant free marketeers (and at this point I would recommend the book ’23 Things They Don’t Tell You About Capitalism’ by Cambridge economics professor Ha-Joon Chang, whose dry wit wowed the crowds at the Hay Festival).

We do seem to have passed well beyond the era of evidence-based policy making (although many people thought the last government preferred policy-based evidence-making and quote examples like the Barker and Stern reports). The consultation paper is peppered with unsubstantiated assertions like ‘a key barrier to increasing housing supply is the lack of land available for residential development’. If that was ever true it was only in small areas of the country at the top of the boom and certainly isn’t in most of the country today.

The major impact here is that land currently allocated for office, industrial or warehouses could become housing and the usual rules requiring contributions to affordable housing and schools for example will be ignored. This land will immediately become the most attractive for housing developers as a result and its value will be higher than other housing land and it will be the first to be developed. So the employment land supply will disappear overnight. Surely not what Government’s growth policy requires?

Another issue which arose during the boom when developers built residential in industrial areas was the sudden upsurge in noise abatement orders as the new residents complained about the noisy manufacturing or leisure uses that pre-existed their arrival.

Government also proposes that local communities (for which read ‘business-run neighbourhoods’) could go further and grant themselves further relaxations in the planning system. It doesn’t seem too far-fetched to imagine that business-run neighbourhood plans could, through this process, completely remove planning control over change of use.

Interestingly, the Government proposal is also to allow the residential constructed after a permitted change of use to revert back to business use after five years. This would create a new class of residential which had permitted change of use to business but there doesn’t seem to be any mechanism to log which residential has this ability and which doesn’t. The proposal also doesn’t apply to listed buildings which also seems strange as these are probably most in need of finding a viable alternative use and it also seems to cut across the purposes of the recently extended Business Premises Renovation Allowance which seeks to bring vacant business premises back into business use.

So where will these proposals get to? The results of the consultation, which closes at the end of this month, will be interesting. Will there be sufficient interest from those without vested interests to make Government think again (or just to give the Prime Minister sufficient excuse to achieve a face saving retreat from this business growth damaging proposal)?

No doubt the Pickles-Cable war will continue and regeneration will continue to be caught in the crossfire and the fallout.


5 Responses

  1. Another excellent blog Chris. You’ve very succinctly managed to explain yet another example of where the Government really doesn’t have the first clue.

  2. Chris,
    Excellent objections – I blog about some of these issues here.http://andrewlainton.wordpress.com/2011/05/30/the-real-enemies-of-enterprise/

    But shaky land economics

    ‘unsubstantiated assertions like ‘a key barrier to increasing housing supply is the lack of land available for residential development’. If that was ever true it was only in small areas of the country at the top of the boom and certainly isn’t in most of the country today.’

    So land enough to build 120,000 houses a year when the household projections are 260,000 a year isnt a shortage then.

    If there wasnt a shortage then why is allocated housing land worth several million a acre – when unallocated is worth several thousand. And who do you think pays the difference?

    The fact that because of temporarily depressed demand the residual value is negative does not mean that there is too much housing land allocated. Rather the shortage contributed to a bubble, which drove credit expansion which created the economic collapse.

    By your argument if someone broke their neck jumping into a too shallow swimming pool you would drain the pool rather than filling it up.

  3. Has anyone advised ministers that the UCO is not an instrument of planning policy, but is simply a schedule of classes of uses with similar characteristics and impacts, to facilitate changes of use within a class without the need for planning permission? Call me old-fashioned, but if that principle is abandoned, what would be the point of a UCO?

  4. We are surprised this blog and the issues raised by the consultation don’t seem to have attracted as much comment as they deserve. Perhaps this stems from media announcements that (despite how the UCO and GPDO actually operate) the proposals apply to ‘empty’ offices? Of course, the consultation says it relates to B-Class uses, but the consultation’s references to “houses being built” led us to seek clarification from CLG and we received the following reply.

    “I can confirm that the proposals relate to the change of use of buildings and land. Where operational development is necessary, for example where the existing building needs to be demolished to make way for new build homes, planning applications will still be required but the principle of change of use will have been established through the permitted development right.”

    This would increase the potential for landowners to evict businesses, the best quality employment sites to be lost, housing to impinge on the operation of industry, and for speculation in land and uncertainty for businesses to increase.

    It is not only the City of London that should be concerned, but all of those who wish to support investment in industry and employment, including authorities like ours in the West Midlands. Our Members are very concerned and have agreed a strong response. This can be found at:


    In the context of this blog it is relevant to note the prospect the proposals would mean that planning would no longer be able to ensure land would be used for industry, including where it was allocated through the development plan. Professionals might wonder about the future of the planning system.

  5. The RTPI draft response is pretty full on but cant say anything.

    One issue I thought of yesterday would be why would it be rational to zone land for employment. This and the NPPF would prevent you from resisting a change of use to housing. So if the government want growth and from now on housing numbers will be driven by the level of local growth where will the local growth come from.

    Bressenden Place=Enemy of Enterprise

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