Mike Ball on planning delays

Went on Wednesday 11th to a seminar at which Mike Ball was presenting a study he led for a (Treasury-inspired?) agency called NHPAU, exploring the variation in time it took for planning permission to be granted for housing schemes. It transpired I had heard it before (at UCL I think) and read the report so I was a bit prepared – as was Duncan Bowie who also took part. We both made critical comments and received some tongue-lashing for our pains. But it is worth discussing as an example of hegemonic discourse having weak underpinnings.

There is a 4-page summary at http://www.communities.gov.uk/documents/507390/pdf/1437001.pdf and the full report is at http://www.communities.gov.uk/documents/507390/pdf/1436960.pdf

Based on a stepwise regression analysis of over 900 sites approved for housing in England in 2005-6, the report, in the words of the press release: “…highlights an average determination period for the sites analysed of 43 weeks. The study finds that differences in development control times take place within each local authority and that variability appears to be a feature of the development control system overall.

The research also identifies that:

* Development control time increases with the size of development (measured by number of homes) but overall takes less time per dwelling built. Time is not affected by other scheme features.
* Trophy or prestige projects, as well as social housing schemes, tend to go through development control faster than others.
* The development control process takes longer in more affluent localities and where there are hung councils.

The report concludes that uncertainty in time taken to process applications has significant implications for housing supply. It argues that long determination periods “will inevitably discourage investment in bringing forward new sites in the period following a recession, as developers will want to be certain that a strong recovery is under way before they make any such lengthy commitment.”

Less than a third of the variance is ‘explained’ by the regression (which is wrongly described as a hedonic analysis, tho’ that doesn’t matter much) and the variation in duration really is colossal, with the standard deviation about the same as the mean duration (report p 37), both for the net time when the LPA was handling the case and for the gross time – including periods when the applicant was working on revisions etc. There is a very great deal of variation to explain. As with any such analysis, it is fascinating and there are lots of good insights.  But it’s fundamentally unsatisfactory.

The great mystery about the work is why they didn’t explore (at least)  three rather obvious factors which could explain the varying decision times:

• whether the application was in conformity with plans/policies;
• whether pre-application discussions had taken place—discussions which are supposed to get conflicts and snags sorted out prior to submission and thus speed the grant of permission—and
• whether schemes approved most rapidly were in any sense ‘worse’ outcomes than others (which planners often argue in defence of needing more time).

Mike responded to our comments on this by saying that the statistical approach meant that only quantifiable explanatory variables could be included and I do see that the third factor (quality of outcome) could be hard to measure.  However that defence does not cover the other two factors: every decision has an Officer’s Report and (in my experience) this always deals with conformity and often mentions pre-application discussions.  Pre-application discussions are surely also the subject of record within the LPA, if only because of the bizarre practice of charging applicants for them.  Without exploration of these factors I think that the report’s conclusion that there is a huge amount of arbitrary / random / inexplicable variation in time taken is itself an arbitrary and tendentious conclusion.  I think I have argued this correctly but I’ll ask MB to comment in case I’m wrong.

If I’m right in my scepticism then an alternative truth could underly the observations: developers who select sites indicated in development plans, prepare schemes which conform with policy and are well-designed, then check this out through pre-application discussions, can be fairly confident of a quick and positive decision. They can also be fairly certain that doing the opposite (on any or all of the 3 variables) will increase the time taken to get permission, or even bring refusal. Costs of waiting will be higher, but it will have been a calculated decision without much uncertainty. It may be worth doing in cases where the payoff is very high.

Two other issues cause me to reflect.

The argument is made that the decision-time, and especially the allegedly great uncertainty about decision time, means that it is entirely rational for housebuilders to hold substantial landbanks of sites with permission so that they can produce a steady flow of output without being stalled by running out of approved sites. The fact that developers held a reported 2.7 years supply of permissions is thus evidence of rational response to the planning system’s unpredictability, not evidence of speculation. My question is whether the distinction matters. We certainly have a system/practices in the UK whereby land used for housing development is very expensive, especially in southern regions, and the sucessful management / timing of land acquisition / assembly / permisions in relation to sales is a major determinant of profitability for developers – far more important than the quality of their output, floorspace standards or building costs per square metre.  Clearly the NIMBY / conservationist / CPRE containment pressures for the last ?6  decades have been and remain a major force in this. And the planning system is a major vector / instrument in implementing these interests.  But even if all planning decisions could be well-made within 13 weeks, don’t tell me that our housebuilding industry would transform itself into a high volume production system.

The last point to record is that I asked Mike a question about whether the industry he analysed so brilliantly in his 1983 book Housing Policy and Economic Power (a sector well-adapted to remaining profitable in volatile conditions, through negligible direct / secure employment, minimal fixed capital and flexible stop-start technology) had changed into the industry he is now implicitly describing – one which needs conditions for stable production, to maintain its staffing and so on.  He replied that he thought it had not changed.  He said it’s an “elastic” industry.  But like a rubber band, it can be stretched too far.

Author: Editors

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