Housing and Planning

Neil O'Brien Excerpts

Tuesday 3rd March 2020 Westminster Hall

[Sir Charles Walker (in the Chair)]

Colleagues, before I call Mr O’Brien to move the motion, I note that there are a lot of speakers. If you intend to speak, I advise you to be parsimonious with interventions, because it is possible that some speakers will be crowded out.

[Neil O'Brien (Harborough) (Con)]

I beg to move,

That this House has considered housing and planning.

It is a pleasure to serve under your chairmanship, Sir Charles. It is good to see so many colleagues here and I particularly welcome our brilliant new Housing Minister. I will talk about the wider reforms needed in planning and housing, but I want to start with not the where or what of what we build, but some of the problems caused by the way in which the development industry behaves.

The first problem is what has come to be known as fleeceholding. It has become the norm for bits of new estates, such as car parks and public areas, to be handed over to property management companies for their upkeep, with residents paying for it. Instead of being maintained by the council, the property management company steps in and offers to adopt those responsibilities more cheaply than the council would. Often, however, it makes a cheaper offer only because it is working on the assumption that it will be able to dramatically increase bills.

Several neighbourhoods in my constituency are up in arms about opaque and rapidly rising bills from these property management companies. For example, around Windlass Drive in my constituency, 120 households are charged £60 each to mow around a tiny balancing pond that is much smaller than this Chamber. Absurdly, while the council mows a much bigger area all around it, someone comes down all the way from Derby to mow that last tiny area. That fragmentation increases the costs to householders, and that cost is passed on to people in the form of higher bills. Likewise, residents of Coleridge Way were at one point asked to pay £300 a week for someone to drive over from Solihull to inspect a playground. Four households in Farndon Fields were asked to pay £2,400 for the maintenance of a tiny piece of car park, consisting of no more than 30 minutes’ work over five years. That is £2,400 for 30 minutes’ work—nice work if you can get it, Sir Charles.

These maintenance companies are opaque, and people who move out often have to pay them substantial fees to get the documentation they need. The Homeowners Rights Network and the National Leasehold Campaign have compiled many such horror stories. We could easily have a debate on fleeceholding alone. Having found that some companies have in fact broken the law, the Competition and Markets Authority is now taking action. I hope that the Minister will also take action against bad practice that falls below the threshold of criminal behaviour—the industry is full of cowboys—because my constituents are sick of wasting their time battling unfair bills.

The second problem with development is that of inappropriate access to sites. Residents who moved into new homes on Farndon Fields were told that there would be no development next to them for decades. That was not true. When a different developer got planning permission to build a new estate right next to them, it got an access route agreed that goes through their estate. It goes through tiny, narrow streets, past a playground and down a tiny cul-de-sac. There is mud all over the roads and huge lorries revving their engines outside people’s houses in the early hours of the morning. People on that estate face years of misery. We tried to get the developer to use a different, better access route through a field, but when pressed it said that the farmer was asking for too much money so it was not possible. In the end, the council did not want to be taken to tribunal, so it gave the developer that access route.

I have no idea how much the farmer was asking for, but if the Minister could find a way of creating a better way for councils and developers to secure temporary access routes that avoid disruption to huge numbers of households—it could be a temporary compulsory purchase order or some other solution that provides better access that is not obnoxious to residents—that would be very welcome.

Another big problem in my constituency this winter has, of course, been the flooding caused by inadequate drainage from building sites. Developers typically start work by scraping off the topsoil and only put in the drainage late in the construction process. This year, over winter, many have been caught short, as inadequate, temporary drainage has been overwhelmed by the amount of water. For example, on Kingston Way, developers caused huge flooding on the roads and flooding of people’s gardens. They have built a pathetic little muddy sandcastle to try to direct water down the drain. It is a pathetic reflection on an industry that constantly claims to have compassionate constructors. Again, some of that is for local councils to sort out, but if the Minister has an opportunity to change national guidance about the phasing of drainage works on new sites, that would be very welcome.

Another problem with construction practices is about how planning conditions are often violated, with it being difficult for councils to enforce them. Builders work beyond the hours they are permitted to work, lorries park in residential streets and firms fail to honour commitments on wheel washing, so residents end up tramping huge amounts of mud into their new carpets. At the moment, the onus is totally on the council to take developers to court, which is very cumbersome. I encourage the Minister to look at making it much easier for councils to enforce breaches of the rules through some kind of bond system or fixed penalty notice, because developers need to know that if they consistently breach the rules, they will face sure and swift sanctions, and it will cost them money if they break the rules.

The final set of issues with the industry’s behaviour relates to adoption. On Devana Way in my constituency, developers sold houses on new, tree-lined streets. It was beautiful, lovely, and people really liked the trees. However, the developer, after selling the houses to people, had a dispute with the council over adoption, which it solved simply by turning up one morning and ripping out all the trees. Wonderful! I do not see why any developer should be allowed to go ahead with constructing a new estate if it has not already secured agreement on who will maintain it. Developments should not go ahead without clear agreements on adoption and who will maintain what.

Those are some of the things we need to do to change developer behaviour in the industry. I now turn to the bigger picture. We need four or five big changes to the way in which we approach planning and housing policy. First, we need a clearer vision of where we want to build. I believe we must do more of it in our cities, because there are strong environmental and social arguments for that. It means more walking, better public health, less congestion, less pollution and lower energy use. As the Create Streets think-tank has pointed out, having denser cities does not have to mean ugly tower blocks. The densest neighbourhoods in all of Europe are in Barcelona and the densest in Britain are in Kensington, which are nice places to live. Britain currently has the least dense cities in Europe. We also have many cities that have shrunk, with Dundee, Glasgow, Liverpool, Sunderland, Birkenhead, Hull and Newcastle all having smaller populations in 2017 than in 1981.

[James Cartlidge (South Suffolk) (Con)]

I congratulate my hon. Friend on his speech on this important subject. I very much admire and agree with what he has previously said on urban regeneration. Does he agree that, at its best, urban regeneration provides not only more new supply, but better supply for existing tenants and leaseholders, and that it also helps us avoid disproportionate development in precious green spaces?

[Neil O'Brien]

My hon. Friend is absolutely correct. That is why we must change the objectively assessed need process and choose to build more in our cities. We must support such developments and do all the other things required to support their levelling up.

Secondly, we need a clear vision of what kind of development we want, because while there will always be some developments in the shires and suburban areas, at the moment we mainly have piecemeal infill-type development tacked on to the edge of villages. Developers prefer that, because it is much more profitable as they do not have to pay for the new GP surgery, the new school, the new road and so on. Instead, those developments piggyback on existing facilities. Infill is the type of development that attracts the most opposition. That is not surprising, because it takes place next to existing residents who have chosen to live on the edge of a village or town to get a nice view.

There are physical limits to how much can be added to a place without it losing its character, because roads through the centre of a village become congested and cannot be widened, and the village school cannot be expanded even if the money is available, because it is completely surrounded by houses. In larger strategic developments, which lots of councils now want to move towards, developers do not build next to so many existing residents, the infrastructure can be planned properly and people do not have to live on arterial roads. Let us give councils the tools, the fiscal firepower and the legal ability to have genuinely planned development, not a free-for-all.

[Kate Green (Stretford and Urmston) (Lab)]

I congratulate the hon. Member on the debate. Does he agree that it would be good for the Government to look again at permission in principle, which means that councils have even less grip on strategic planning control and residents have absolutely no means of complaining, raising objections or having their concerns taken into account?

[Neil O'Brien]

I certainly agree that it would be desirable to get rid of outline planning permission, which many developers use to get a foot in the door and then have councils over a barrel. However, if we are going to give councils the power to have a proper plan-led system, we need to ensure that we have a better system for development to pay its own way.

Part of the opposition to new housing comes from the fact that too often it comes without the necessary infrastructure. Without new schools or roads, the GP’s surgery and everything around the new housing becomes more congested and, of course, people object to that. People see developers making humungous profits while the infrastructure is either not provided at all or the cost is dumped on the taxpayer.

Section 106, the way in which councils currently get developer contributions, is totally dysfunctional. Councils cannot use it to fund recurrent expenditure or anything that meets an existing need in the community. It can only fund a new need that is tied to the new development. Contributions are tied to specific purposes, so if what the community wants changes in five years’ time, that is tough luck.

Given that collection is fragmented among lots of authorities—fire, police, health, county and district councils—developers sometimes get away without paying. They can hold off making payments by staying below certain trigger thresholds, and if they are able to hold off for long enough, the opportunity to build a new village hall, for example, is often lost. If a community has only rolled up enough contributions within a specific time period to pay for half a new school, for example, then it gets nothing and the money goes back to the developers. In 2014, the BBC found that councils had returned to developers £1.5 billion that had been intended for the community. When my constituents read that, they are outraged.

[John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)]

I congratulate my hon. Friend on making an excellent speech about these important issues. A number of housing developments that have been built in my constituency over the past few years do not have adequate broadband connections. Does he agree that investment in infrastructure should be extended to include connectivity? Developers and councils should work together to ensure that no new developments can be constructed until adequate broadband connections have been demonstrated.

[Neil O'Brien]

My hon. Friend is right. Broadband is one of the benefits that people seek from new development. Mandates are one potential way to secure such benefits. The broader change that I would like to be made is the removal of all restrictions that depend on section 106 and for the system to be replaced with something that is more fit for purpose.

Beyond the need to create a better system for contributions, we need to give councils other tools to create better quality and more planned development. In my constituency, there is an old rubber factory that is two minutes’ walk from a mainline station, which is only an hour from London. It is the perfect site to build on, but despite the fact that the council gave planning permission in 2004, nothing has happened because there is nothing to disincentivise the owners from simply sitting on their hands. We need to learn from the USA and from other countries in Europe, and give councils the power to buy land, to grant themselves planning permission and to take more of a leading role in development. The current situation is a legal minefield, so I believe we should reform the Land Compensation Act 1961.

[Bob Seely (Isle of Wight) (Con)]

I thank my hon. Friend for securing this debate and for making a fantastic speech. The planning system is so frustrating. Isle of Wight Council does not have a housing revenue account, so it does not have access to the billions of pounds of funding. On the Island we are desperate to build one and two-bedroom properties, rather than being deluged with endless planning applications for low density, greenfield houses for folks to retire to the Island. Does he agree that we need a more flexible system that caters for the needs of specific communities, especially isolated island communities?

[Neil O'Brien]

My hon. Friend is completely correct. People want a proper plan-led system. Other countries achieve that by allowing local government to play a stronger role in determining where things go.

We must reform the 1961 Act to make it clear that buyers can pay current market use values for land rather inflated hope values. We should stop land prices being bid up in the first place, by stopping sites going through the plan-making process on the assumption that developers are going to get away without paying for infrastructure. We should turn Homes England into a flying squad to help councils plan and deliver brownfield regeneration. We must make sure that council planning departments are well enough resourced to retain good staff. It is a difficult industry where the poachers, as it were, can pay people a lot of money, and local councils often struggle to hang on to good staff.

My final proposed reform to the planning system is to reboot neighbourhood planning so that it can fulfil its potential. Many places in my constituency have drawn up neighbourhood plans, and people have given a lot of time to them. In some cases they have been a force for good and shaped the way in which, and where, things get built. In other cases, however, they have taken so long to draw up that developers have front-run them. Too many are lengthy and lack the one thing that would give them real bite, which is a map of where development does and does not go.

We should radically simplify and speed up the process of making neighbourhood plans. They should all have a clear map of where development does and does not go. Where councils are planning sensibly, we must give them more legal weight. As I argued in a report for the think-tank Onward, we should reward outstanding councils by making them exempt from any appeal to the planning inspector.

[Mr Mark Francois (Rayleigh and Wickford) (Con)]

My hon. Friend is making a thoughtful speech. Does he agree that democratic accountability is fundamental to this process? Is he, like me, concerned about the rumours, which I hope are not true—I am looking at the Minister—that the Government are considering changing planning law so that developers will get automatic planning permission, regardless of the quality of their design, if they make an application in an area zoned for housing? Does he agree that democratically that would be completely unacceptable?

[Neil O'Brien]

My right hon. Friend makes a thoughtful contribution. It depends what we mean by a plan-led system. It is right that councils should be clear about where development is going, but I worry about anything that would ride roughshod over the wishes of local people, so I agree with my right hon. Friend on that point.

There is much to fix in our planning and housing system. The current rules seem almost perfectly set up to cause a huge amount of grief and political friction, and to deliver a relatively small amount of housing, because they push development in the wrong places, without the necessary infrastructure. If we change the system, we can keep green and pleasant those places we value most, but also ensure that the average family can get a house they can afford. We are fortunate that we have exactly the right Minister to deliver that huge reform.

[Several hon. Members rose—]

--- Later in debate ---

[Neil O'Brien]

I thank all Members who have taken part in this afternoon’s brilliant debate. I was encouraged by the Minister’s words, particularly on temporary access. I strongly agree with the hon. Member for Ellesmere Port and Neston (Justin Madders) in his coruscating critique of the fleeceholding industry. They are the timeshare salesmen and the dodgy wheel-clampers of our generation, and I hope that the Minister will clamp down on them very strongly. Perhaps the new homes ombudsman can be the vehicle for that.

I agree with the question posed by my hon. Friend the Member for Bury North (James Daly) about what affordable housing is. I think that the type of tenure most missing is cheap rented housing for working people. Although affordable housing is hugely needed, and my local council in Harborough has built a record amount of it, we need something for those people who are earning a bit and do not get social housing.

I was struck by the comments of my hon. Friend the Member for St Ives (Derek Thomas) about developer contributions. We must not go over the top, but on the other hand there is a reason why all economists agree that taxes on land and development are different to other types of taxes. If we lose developer contributions, we typically do not get more houses—just higher land prices and a bigger windfall for the lucky landowner.

Finally, there was a good challenge from my hon. Friend the Member for Filton and Bradley Stoke (Jack Lopresti). We do need to build more houses. France has built twice as many houses as us since 1970, and French house prices have gone up half as much. Places such as the Netherlands have built more too. We need to learn from them. It is not about shoving more houses through the system; it is about having a proper, plan-led system to do it.

Motion lapsed (Standing Order No. 10(6)).