Deregulation at any price?
Last year Sir John Harman was asked to lead a review of housing viability and standards. His report concluded that if we load too many things on to the cost of building new houses it will cease to be viable for developers to build them and make the requisite profit. It also concluded that a plethora of locally applied standards was ripe for review and rationalisation to remove duplication, contradiction and the burden that these things result in. So far, fair comment.
The Government had dragged its heels in taking forward Harman's recommendations. It's had other things on its mind - such as the most comprehensive upheaval in the planning system since the Town & Country Planning Act, and a Red Tape Review seeking out burdensome regulation wherever it may hide. And suddenly it has surfaced with the post-Harman review of standards. But rather than being content to take forward a process to review and rationalise locally applied standards - the Code for Sustainable Homes. Lifetime Homes, etc. - it has announced a "radical and fundamental review of the entire framework of building regulations and voluntary housing standards". A complete, no-holds barred, "radical" tossing up in the air of the entire system that governs the way we build homes in this country, to make it "easier" for builders.
So exactly what is so broken that it needs such an extreme fix? I attended numerous housing-focused events in the Party Conference season. And time and again the industry set out its priorities for government intervention: availability of finance, availability of finance, and a close third, availability of finance. Only when people tired of that debate did the demon planning system get a look in, and mentions of regulatory burden were barely heard.
Developers who can get permission and find customers with mortgages are building and selling houses, and returning to healthy profits. Nothing wrong with that, especially as they have entered the premier league of European energy efficiency and quality standards, and have transformed levels of customer satisfaction over the last few years, since the Barker Review and the OFT made it clear something needed to change.
So at a time when industry generally is crying out for stability, consistency and policy certainty, just why is the Government throwing everything up in the air again? Can it really believe that some modest improvements to the governance of house building will outweigh the extraordinary cost of uncertainty that will rain down on developers, Local Authorities and communities up and down the country? Is this really about getting Britain building or ideology-driven policy, because surely nothing will precipitate paralysis faster than builders not knowing how much it will cost to build houses and whether or not they will get permission to build. That is when people sit on land, and wait for sense and order to be restored.
Oh, and exactly how do most Conservative MPs think their constituents will respond to being told that the system of regulations and standards created over decades to ensure that new homes are built to high quality and sustainable standards are being ripped up to make it easier to build houses quickly? We all know we need more homes for our children (who are now first-time buyers well into their middle-age) to live in, and we know that house building is good for jobs and the economy. But we also know that we are all very concerned about what gets built in our backyard, and what a blight of poorly conceived, badly built housing thrown up in the wrong places would do for a more responsible house building industry. And yet, the government, rhetorically committed to localism, wants to "deliver a mechanism, legislative or otherwise, to ensure that local authorities cannot layer on any additional rules or standards through the planning system, beyond those left at the end of the review."
So If this policy approach isn't needed or demanded by industry, and very likely to unsettle Local Authorities and inflame environmentalists and communities, and more likely to put the brake on housing delivery than the accelerator, why is it being driven so hard within government, weeks after Andrew Stunell the former Minister for building regulations - and by general consensus the best-informed minister in that post for a decade - was shuffled out? Because, it appears, deregulation is in the DNA of this government, no matter the cost, or for that matter, the benefit.
3 comments
I would agree that it is not the regulatory system that is holding back housebuilding. It is not even the planning system that is holding back housebuilding. Yet both are being used as scapegoats by the government instead of tackling the much more thorny issue of finance and affordability.
Regulations provide, as a minimum, standardisation, which provides stability and predictability, allowing builders to better predict costs.
If anything, the standards contained in regulations need to be upped to ensure new homes are fit for purpose - spacious and energy efficient, thus driving the market for high quality, new homes.
Based on the media reports, there seem to be two themes here which are very worrying:
- the introduction of new areas of uncertainty across almost all aspects of house building. Whatever the desired future direction of policy - green or otherwise - the level of risk the industry is faced with in trying to plan viable future strategies for product innovation and other investment has been raised by an order of magnititude
- the apparent braking or reversal of earlier policies regarding energy and carbon suggests that, despite the efforts on the part of some parts of Government to enlist the involvement of business, there is either an underlying lack of will to achieve energy objectives or confusion around the level of policy consistency required
The need to stimulate the economy and enable a recovery in housebuilding is paramount - but is this review really the right way of going about it ?
As a manufacturer of heat pump technologies that generate renewable heat for space and water at a domestic (and commercial) building level, it is worrying that building regulations, that are intended to drive down the need to consume energy could be 'relaxed'. This makes no sense. If buildings are allowed to be built with lower thermal standards, then the targets of achieving heat from renewable sources will be harder to achieve. It will also mean that the money allocated from general taxation to support the growth in renewable heat via the Renewable Heat Incentive will not go as far as building loads will remain artificially high. I raised this recently at a lunch in Westminster organised by PRASEG (Parliamentary Renewable and Sustainable Energy Group) and asked that DECC ensure that DCLG do not allow this erosion of building regulations to occur for the reasons I have already mentioned.
It is a classic case of the left hand not knowing what the right hand is doing. Surely people want to live in energy efficient homes, where they are more in control of their energy use. Anecdotally, those who live with a renewable energy system such as a heat pump, become more aware of their energy use and as a result make other decisions in their life that reduce their energy consumption.
We will continue to call for Government to ensure that planning and building regulations work to assist the greater goals we have as a nation and promote the use of low and zero carbon technologies.
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