PM wrong to blame councils for housing crisis but big builders have a case to answer

May took aim at 'nimby councils' in yet another 'major speech'

Theresa May's housing speech (BBC)

Theresa May seems to like giving “major” speeches. She’s delivering them everywhere right now. If she’s not careful she’ll end up with the sort of sore throat that made her speech at the Tory Party conference rather more entertaining than usual last year.

The latest one is on housing, for which the over used adjective “crisis” is for once apt. Cue a telling-off for developers and “nimby” local authorities for failing to “do their duty” to foster the British dream of home-ownership.

It’s a standard, and cheap, tactic of central government to blame others for its own failings, particularly local government.

Except that in this case local government has been able to decisively prove that council planning departments aren’t at fault.

We, said, Lord Porter, a council leader and chair of the Local Government Association, are doing our bit and we have the figures to prove it.

Nine out of every 10 planning applications are approved and when the rare refusals are appealed to the Planning Inspectorate nearly three out of every four (73 per cent) of council decisions are upheld.

Some 321,000 new homes were greenlighted in 2016 to 2017. Just 183,000 were actually built. There is a bank of 423,000 homes with planning permission awaiting construction. If there’s something stopping housebuilding it wouldn’t appear to be the planning system.

By the way, Lord Porter is a Conservative.

The figures supplied by his Local Government Association would certainly suggest that there is something to the claim that the big housebuilders have been sitting on land banks with the aim of profiting from rising values.

There are perverse incentives on them not to build, not just through those land values but also because of the fact that a genuine increase in the supply of homes might serve to reduce asking prices and thus the developers’ profits, not the mention the crazy bonuses they have been handing to executives.

The PM, in her speech, railed against the latter, and no wonder given their companies have made huge profits on the back of her Government’s Help to Buy scheme without doing much to increase the supply of homes.

Councils quite like the idea of being given powers to force their hands. Whether the limp measures suggested by the PM would do that is open to question, if they ever reach the statute book. Allowing councils to revoke permissions after two years if a building doesn’t get started feels like a half measure.

One thing that would help increase the supply of available homes would be to allow councils to borrow to build so that they could pick up the development slack. It’s a suggestion that has found favour with Communities Secretary Sajid Javid in the past, but not, so far, with his colleagues.

Another might be a windfall tax on developers’ profits, and perhaps on their executives’ bonuses, like the one Labour imposed on bankers, too. They could help to provide desperately needed funding to cash-strapped councils.

They might also prove to be rather popular. But they would be controversial, and require a PM with some gumption to force through. This one prefers to talk and talk and talk, and to moan a bit about local government while she’s doing it. She’ll be needing more cough sweets before too long. The rest of us will be after headache pills and prozac.