New Developments

Readers will have noticed the plethora of new property development applications that have mushroomed in the last few months, and wondered why this sudden rash?

We believe it's down to the Government. This article explains how we think this situation came about, and how it is starting to affect communities - not just in Fylde, but up and down the country.

When the banking and financial crisis broke in 2008/9 all hell broke loose, and for a while we stood on the bring of catastrophic economic collapse. Emergency measures (which we've covered in our occasional financial articles) were taken to put a hold on the situation.

After the post-election Coalition was formed, and in the face of the emerging European crisis, two schools of thought materialised.

In opposition, Labour wanted to 'grow' out of the risk of recession - chiefly by expanding public spending on infrastructure, thus feeding money into private sector contracts which, in turn would lead to sub-contractors, to jobs, and the end of the recession. It would also increase personal and corporate taxation revenues to reduce the national budget deficit.

Sounds good. But the problem with it is that we would have to borrow yet more money for the public spending, and we're already in trouble *because* of such borrowing.

That's why we're in such a mess. The debit chickens have come home to roost.

Translated into a domestic situation it's equivalent to knowingly increasing your already maxed-out credit card debt, or your overdraft, to cover the spending needed to improve (or at least maintain) your current lifestyle as if everything was fine and dandy - ignore the debt, and live in comfort until you can get a promotion, a better job, or more overtime.

We regard this idea as dangerous lunacy.

The ConDem Coalition on the other hand, wanted to cut back on public spending in order to reduce the deficit that grew under Labour, and to lower taxes so that people and businesses had more to spend. They thought that spending would encourage growth in the private sector - and that would take up the employees that would inevitably become redundant from the cutbacks in public spending and its dependent sub-contractors.

When we first saw the Coalition plans we were shocked.

Doing 'a Bob Geldof', we asked ourselves: "Is that it" - because to us it didn't seem anywhere near what was needed to rectify the situation. It wasn't even a serious attempt, it looked like playing at it.

But, of course, the trouble was that the much harsher cuts in public spending and welfare benefits that were needed by the situation, risked producing riots on the streets and anarchy.

It would have made the Government completely unelectable, so they are managing as best they can by fiddling at the edges - and it's solving nothing.

The problem was eloquently set out by (or at least reputedly set out) by former Prime Minister Harold Macmillan. He famously observed that the greatest obstacle to political achievement was "Events, dear boy, events".

He meant that countries' systems are overtaken by events of one kind or another that bring big consequences.

And so it is for the Coalition. They have been overtaken by events in Greece, Spain, Italy, Portugal, and Ireland. Their scheme isn't working. The Office for National Statistics figures show it, the IMF have (gently) said so as well, as have many other informed commentators, and of course Labour's Mr Balls is having a field day shouting "I told you so" from the rooftops, and it's beginning to resonate with the electorate.

And today, when people like the British Chamber of Commerce's chief economist, David Kern, has advocated a "large and well thought-out infrastructure programme" financed by government borrowing in order to boost growth - pressure continues to mount.

But whilst they might make some limited moves in this direction, the Government can't adopt Labour's 'Plan B' of higher public spending - partly because of an ideological (and even a logical) dislike of it, but also for fear of appearing to have been wrong and of Labour appearing to be correct - which would itself see them off that the next election. So they're looking for 'Plan C'

And whilst they do that, we're reliably told that the Conservative party is haemorrhaging support amongst their traditional supporters (who are mostly defecting to UKIP) - to the extent that party activists and funding in some districts is not even producing the support and income necessary to properly maintain the organisation, let alone sending money to HQ.

And as for the Lib Dems, they're going to be toast by the time the next national election comes.

Threatened with this situation, both Coalition parties (rightly) probably see themselves as losing the next election. (Parties rarely win an election, mostly those in power lose them), and with (at least at present) Labour as the only credible alternative, the Conservatives and Liberal Democrats must now be ready to thump that big red 'PANIC' button to get 'growth' moving again, and people spending.

They've had very limited success with generating growth in the fields of industry and commerce, because the banks have been hoovering up all the money they can get their hands on to reduce the unbelievably foolish lending binge they created.

So instead, Mr Osborne and his pals have turned to the 1930's solution of housebuilding as the magic bullet to get them out of the mire.

The first signs of this came when they announced the new National Planning Policy Framework (NPPF). It flew in the face of the previous direction on Localism which aimed to give local people a greater say over development in their areas.

It set out to prescribe a presumption in favour of development and it threatened to remove well established protection for local environments, whether that was for wildlife, greenbelt, local services (schools, health) and so on.

There was a major public outcry and the Government back-tracked slightly on the most controversial aspects of the NPPF (such as allowing development on the greenbelt).

The slightly watered-down, but still hugely damaging, vague, NPPF was approved, and became law.

Shortly after that, St Eric approved the Queensway planning application by Kensington.

We believe - although we have no actual evidence - that he was effectively forced into that decision by pressure from other parts of Government - most likely via George Osborne and the treasury.

That decision, and the lack of progress that Fylde had made on its new Local Plan (because the former Commissar either placed little importance on planning and starved it of resources, or he deliberately did so to help developers progress their schemes), has opened the floodgates to development in Fylde outside the existing settlement boundaries.

In 2010 the new Government had already announced moves to soften up Councils by saying that for every new home the Council grants planning permission (and it gets built), the Government will pay the Council a grant called a "New Homes Bonus" that will be equivalent to the council tax raised on each new house for a period of six years. For one 'band D' rated home, that would be around £1,400 a year.

So if all the houses on Queensway were to be built next year (they won't be, but speaking hypothetically to show the scale of this 'inducement') that would amount to 1,150 homes x 6 years x £1,400 a total of £9.6 million in Government grants. (£1.6m a year). That's a big attraction.

But then came the killer blow from Government.

Faced with the stark reality of losing the next election, the Government has gone into overdrive on further promoting development.

First, Grant Schapps is leading a plan to create "Expert brokers" who will spearhead a fresh drive to get what he calls "stalled housing deals up and running and builders back on moth-balled sites."

This aim centres on what are known as "Section 106 Agreements" where a developer has promised to provide some public service or facility such as social 'affordable' housing, or roads or sewers or schools or whatever, in return for being granted the planning permission.

The Government says it believes that too much development is being stalled because of what it calls "economically unrealistic agreements negotiated between councils and developers at the height of the housing boom." They also say that "This results in no development, no regeneration and no community benefits at all when agreements are no longer economically viable."

So Mr Schapps is currently creating "teams of intermediaries [who] will now offer a free-of-charge advice and support service to councils and developers and will be available to help kick-start renegotiations of these deals to stop them being a barrier to getting building underway."

The aim here is for his crack-legions to re-negotiate agreements that have already been agreed and signed, reducing the benefits to councils and increasing it for developers.

We imagine that high in his sights will be the sort of councils (not Fylde) who have required developers not only to provide 'affordable housing' as part of the planning permission, but also require them to replace any of those 'affordable houses' that are subsequently sold under the 'right to buy' legislation (or when those in a 'shared ownership purchase scheme' have acquired 100% of a dwelling under what's called the 'stair-casing' procedure).

A Council's aim here would probably be to ensure that the public benefit of affordable housing remains available 'in perpetuity' - but Government says this sort of thing is stalling development, and thus our economic 'growth' as a nation.

Whilst we can see some of the benefits of allowing former Council tenants the right to buy their rented property at a discount, but we tend to think that this process is what caused the reduction of 'affordable' and rented housing in the first place. And unless that sale income was re-cycled into new homes (which often it wasn't), a shortage of socially subsidised rented property was always going to be on the cards.

(A paragraph has been removed here. Please see the update at the end of this article).

This is all hokum of course. First, the arguments about "no development, no regeneration and no community benefits at all..." are mostly wrong headed. Apart from 'affordable' social housing provision (which partly meets historic need), Section 106 additional community provision exists to meet the issues created by the new homes in the first place, so if the new homes don't happen, there's no need for the additional facilities.

You don't need a new surgery if you don't build the extra 2000 houses.

Second as we have recently been reminded by CPRE - who reproduced this quote from former Cabinet Secretary Gus (Now Baron) O'Donnell: "If it is to boost GDP, then the answer is simple: concrete over the South East. But of course that’s not what we want and that’s because you would have to be an idiot to want to maximise GDP. It’s a highly flawed measure and I am pleased that we are at last starting to think more broadly about how as a society we measure success."

More especially, we think it's rubbish because it's not planning permissions or Section 106 agreements that are holding things up.

Houses are not selling because no one has the money to buy them. And the banks are redressing their balance sheets by soaking up all the money they can get their hands on. As a result, the received wisdom is that they're offering either no mortgages at all, or at rates so high that they would become unaffordable after a rate rise, or only offering mortgages a low percentage of the value, so they ensure they will get the benefit from the value of the asset after a default, even after another property price collapse.

According to archive information sourced from Fylde's planners, no site in Fylde has ever built more than 50 houses a year. Even Cypress Point - (at the height of demand and before the financial crash) took 10 years to build 500 houses.

There is not the demand there to be satisfied - because the cost of the houses is too great.

And why are house prices are so high? Yes, admittedly, partly it's to do with demand and what people are prepared to pay, but more than that, Mr Schapps is forgetting that in the "old days" it was Councils or Government who provided infrastructure like council houses, roads and schools and hospitals.

But successive Governments (who wanted that money to spend on other things) have now transferred that responsibility away from general or local taxation and onto property developers.

And guess where *they* get the money from.

That's right, they add it to the cost of the new houses, which then become 'un-affordable'.

It is utter lunacy to make a developer provide so called 'affordable housing' by putting up the price of the other houses he builds.

All that does is make the 'normal' (what the planners call 'market value') houses less and less affordable.

Madness.

There are no free lunches here.

So when Government decides to shift the cost of infrastructure to the private sector and leave themselves enough of the readies to send, say, £6.4 billion a year (equivalent to about £260 per UK household) to Europe, and another £12.6 billion in overseas aid (next year) - costing every family in Britain almost £500 - (to name but a couple of instances) - they should realise there will be 'consequences'.

Third, and probably worst of all, the Coalition is now re-visiting the idea of developments on the Green Belt. New proposals are expected in the autumn in an 'Economic Regeneration Bill'.

We're told St Eric is furious (as are some of the other Cabinet members) and resisting the green belt reforms like mad, but the Treasury devil is driving, and the threat is real.

Shaun Spiers, Chief Executive of CPRE, says: “Reports that senior Ministers are contemplating a new Bill to sweep away planning controls are deeply worrying. There have been three significant reforms of the planning system since the Coalition took office, and Ministers should give them time to take effect rather than embarking on yet another upheaval.

"As for the idea that Green Belt protection needs to be weakened to boost economic growth, the Government has made clear time and again that it will protect the Green Belt, and any attempt to weaken it will go down very badly with Government MPs. In fact, there is growing evidence of harmful new development being promoted within the Green Belt. The Green Belt needs to be strengthened, not weakened."

CPRE *IS* middle England, as is the National Trust. No wonder Conservative supporters are being alienated in droves and throughout the country.

But so desperate for growth and 'good economic news' is the less aesthetically sensitive arm of Government - which sees only money - that it is ready to sell out on the principles under which it was elected.

As far as planning is concerned, Localism is a dead duck if the Treasury gets its way.

And the developers know it.

They are circling like vultures - here in Fylde especially, because of the absence of a proper local plan - but also throughout the country as they smell the colour of money. They scent undefendable planning applications that will turn land at £7,000 an acre into something like £1 million an acre overnight, and Fylde will be almost powerless to do anything about it.

So that's why - after the Government's Queensway cave-in opened the floodgates for development outside the urban fence - we currently have large scale plans, applications or appeals going on at:

Whyndyke Farm
With plans for something in the order of 2,000 new houses.

Wilding's Lane
Where 'Ideal Solutions' (a Bolton Based liquidator firm who 'inherited' Rushcliffe Properties) has an application in for 66 houses on the former Valentines Kennels site.

This is sandwiched between two arms of Kensington's development and will fill in between them if granted.

It will also require Wildings Lane to become a road, with loss of gardens and frontages for the existing homes along the Lane.

That widening also has implications for both the Kensington 1,150 home development and the development of the Government Buildings site because it would more or less connect the two.

This is an extract from the planning application "The application site is within an area allocated as Countryside Area under Policy SP2 of the Fylde Local Plan where residential development of the type proposed would not normally be accepted. However, with the grant of planning permission for the Queensway development, it is submitted that no weight can be given to that allocation in respect of the proposed development off Wildings Lane. The development of the application site would represent a logical rounding off of the Queensway development in a location which the Council accept is sustainable. Sustainable development is to be brought forward immediately in line with the National Planning Policy Framework. The proposed development would therefore accord with any reasonable interpretation of planning policy."

Simplified, the argument put by Ideal Solutions (was there ever a more inappropriately named planning applicant?) to Fylde runs broadly like this: Because it has now been shown that Queensway is a sustainable development, this development we propose - which will be located amongst it - must also be sustainable. Therefore you will have to grant permission.

The 'Government Buildings' Site
Where Telereal Trillium (a commercial property management and investment company, headquartered in central London and established in 1997 to take over management of the land and property formerly managed by the Department of Work and Pensions and subsequently the British Telecom property portfolio amongst many others) are appealing their application for a mixed retail, office, and 250 home development.

With the cheek of the devil, they resubmitted the exact same application that Fylde had already refused. But they resubmitted it after the Government's National Planning Policy Framework was issued. In effect they were saying - You're going to lose an appeal, why not save yourselves the expense and cost of having to fight us by giving in now and granting the application.

Wrea Green
Where locals have said the plan for 55 new homes off Richmond Avenue and the Parish Council has voted to object to the plans. Folk are angry that it breaches dozens of Fylde's planning policies. This may be true, but the Government has moved the goalposts, and they're about to make them much bigger. As with many of the other applications, we expect Fylde to refuse permission based on its planning policies, then the developer will appeal, and the appeal will be granted based on the Government's new guidance.

Wesham
Where Metacre Ltd (who had a 264 housing application for land north of Mowbreck Lane turned down by: Fylde BC; by a subsequent public inquiry; and finally, by the Secretary of State) have submitted yet another application on the same piece of land. This time the application is for up to 100 houses on a smaller piece of the land. Locals are worried it is a salami-slice application leaving the way open for what they suspect will be the rest of the (original) application if they can get this 100 or so passed this time. We have heard local people say they fear it wouldn't stop at 264 homes, and the plan is to go all the way down to Treales, concreting over the farmland in a great swathe arcing around Wesham.

Kirkham
Where Bloor Homes have (following a public exhibition see Planning News Update October 2011) now submitted an application for 150 homes on a triangular area of land on the left of the Blackpool Preston road just before the Ribby Hall roundabout, and there is talk of a second developer wanting another 180 homes on adjoining land. Locals fear that it will be the end of the separation between parishes and towns, leading to urban sprawl.

Staining
Where (currently) 54 homes are being spoken of as a follow-on from 28 houses granted against fierce local opposition last year. We're told Jones Homes / The Emerson Group is believed wanted to build something in the order of 200 - 300 houses in the village. We're also told by locals that a phasing scheme has reduced this first to 90 and now 54.  

Although a formal planning application is yet to be submitted, locals think it will be a salami-slice plan, slicing new bits of green land over time.

There are also, of course, the plans for Pontins which have been approved by FBC, and a Kensington development at Lytham's Warton boundary which has been refused. That may yet go to appeal.

So, to slightly paraphrase what we said in 'Queensway Lost' - we think it is inevitable that the decisions taken on planning matters by Government will have electoral consequences.

The Government is between a rock and a hard place. If they go full tilt for growth in housing, they will further alienate their traditional supporters in Middle England and risk not being re-elected. If they don't go for growth (as they see it), the country might well not be moving out of recession by the time of the next election (the year after next), and they won't get re-elected.

So whatever they do will have electoral consequences, and for them, those consequences are likely to grow in significance as development encouraged by Government in order to create the Treasury's illusory debt-based 'growth' actually gets under way not just at Queensway, but across the wider Fylde and the whole country, as the same thing happens elsewhere.

We spoke with one of the chaps from QED the other night. He said he now despairs for Fylde because in his view, Fylde's absence of an up to date local plan, coupled with the current national planning regulations, and changes coming in the pipeline, mean there could be building just about anywhere in Fylde. He said the efforts from Government to promote localism in relation to planning were abysmal, and the green belt was seriously under threat.

We couldn't disagree.

Dated:  30 August 2012

UPDATE  AND CLARIFICATION 14 NOVEMBER 2012
A paragraph in this article has been removed. Please follow this link for a clarification and update.