UK Chancellor Reeves Vows to Fix Broken Planning System for Housebuilding

(Bloomberg) -- Chancellor of the Exchequer Rachel Reeves vowed to “get Britain building again,” as she unveiled a slew of planning reforms including restoring mandatory local housing targets ditched by the previous Conservative government and ending an effective ban on onshore wind farms.

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In her first major speech on Monday, Reeves also vowed to overhaul the National Planning Policy Framework by the end of the month, and a relaxation of planning restrictions on less attractive parts of the so-called green belt, as part of a housebuilding overhaul overseen by Deputy Prime Minister and Housing Secretary Angela Rayner.

“We said we would grasp the nettle of planning reform and we’re doing so,” Reeves said in her speech in London. “Be in no doubt we are going to get Britain building again, we are going to get Britain’s economy growing again and there is no time to waste.”

Reeves’s speech adds to a flurry of activity by ministers across Prime Minister Keir Starmer’s government as the incoming Labour administration seeks to show it’s losing no time in delivering on the change promised during the six-week election campaign that led to the party’s landslide victory last week. Labour’s core promise was to stimulate growth and investment in order to ease the strain on the country’s tightened public finances.

The chancellor also said:

  • She would seek to speed the approval process for onshore wind projects by removing red tape that has allowed local groups to stall projects

  • She’s creating a task force to accelerate stalled housing projects

  • She will announce plans for a national wealth fund “in short order”

  • Labour will stick to its campaign pledge not to raise income tax, national insurance or value added tax

  • She’s commissioned a Treasury report on the state of public spending to be unveiled by the end of July

  • She’ll announce the date of her first budget by the end of the month

Planning reform was one of Labour’s most visible offerings during a campaign characterized by caution as Starmer sought to avoid handing the Tories — in power for 14 years — any material to attack him on.

Some developers say the only solution to Britain’s housing shortage is to build homes on the green belt, strips of countryside surrounding villages, towns and cities where building is prohibited. The concept was first introduced in London in 1938, before later expanding across the UK in a bid to contain urban sprawl after a postwar development boom. The green belt now covers 13% of the England’s land, according to Centre for Cities.

“Nowhere is decisive reform needed more urgently than in the case of our planning system,” said Reeves. “Planning reform has become a byword for political timidity, in the face of vested interests, and a graveyard of economic ambition.”

Nevertheless, Labour’s campaign to fix the planning system has been met with skepticism by some industry experts, who argue that a lack of resources is the main issue holding back development. While Labour is promising to hire 300 planning officers, that would replace fewer than 10% of the planners who left public service during the first decade of the previous Conservative government, according to analysis from the Royal Town Planning Institute cited in the Financial Times.

It’s a headache for the UK’s new ruling party, which has put planning at the center of its promises to boost homebuilding. Prime Minister Keir Starmer has already said it’s unlikely the party would deliver 300,000 new homes in Labour’s first year, conceding its more likely to ramp up development over the parliament in a bid to hit its five-year commitment of 1.5 million homes.

Some housing experts, including former Bank of England rate-setter Kate Barker, have called Labour’s pledge a “Herculean task” that would be “very difficult” to pull off. Bloomberg investigations over the past year have revealed a planning system that’s fallen into dysfunction after years of austerity allowed the NIMBY lobby, standing for not in my backyard, to stifle homebuilding.

But Reeves said the task of ramping up housebuilding and delivering critical infrastructure will involve difficult decisions that she’s prepared to make.

“With these steps, we have done more to unblock the planning system in the past 72 hours than the last government did in 14 years,” Reeves said. “You can see today that I mean business.”

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