Starmer’s Labour Eyes UK Planning Reform Blitz Within Weeks

(Bloomberg) -- Keir Starmer is preparing a blitz of planning reforms if his Labour Party wins the UK election next month, aimed at immediately boosting housebuilding in Britain as he seeks to deliver 1.5 million homes over five years.

Most Read from Bloomberg

Starmer’s government would work rapidly to implement changes during the summer through a series of written ministerial statements, statutory instruments and letters from ministers and senior officials directing local planning chiefs to proceed with projects, people familiar with the matter said.

Labour would also work quickly to amend the country’s National Planning Policy Framework to restore mandatory local housing targets, which would be set at the same level they were before the Conservative administration removed their compulsory element in 2022, according to the people, who requested anonymity discussing potential early moves by an incoming government.

The strategy, which bypasses more time-consuming primary legislation, reveals how Labour is trying hit the ground running as it seeks to deliver the economic growth that will give the party flexibility to spend more on its public service priorities as the five-year Parliament progresses. With all recent opinion polls showing Labour is set to win a huge majority in the July 4 vote, attention in Westminster is turning to what Starmer would do with that mandate.

Labour has put housebuilding at the core of its election manifesto plans, promising to build an average of 300,000 homes a year — a target that successive Tory governments have set and failed to meet. “We have to build more houses. That means we have to take tough decisions on things like planning,” Starmer said at a BBC Question Time event on Thursday evening. “The dream of home-ownership is real for so many people,” he added, warning: “It is impossible, or near on impossible, for young people to get their first home.”

One party official said a top priority for Starmer’s first 100 days in office would be what they described as a revolution in planning, which the Labour leader sees as an essential supply-side reform to spur economic growth, in turn providing more capacity for public spending while also redistributing wealth by allowing more people to buy their own homes.

Angela Rayner, Labour’s deputy leader who is in charge of the housebuilding program, wants reforms to be implemented immediately because the party will come under pressure to deliver on its target by the next election, the people said. A large proportion of the homes would have to be built toward the end of the Parliament, a person familiar with Labour’s plans said, blaming the state of their inheritance from the Tories.

Another predicted it would be the political battle of the next five years, as Starmer would have to contend with vested interests and Britain’s infamous not-in-my-back-yard brigade, or NIMBYs. At his party conference last year, Starmer explicitly promised to “take on the NIMBYs” and be on the side of “builders not the blockers”. He went even further in a BBC interview on June 14, saying he is “prepared to make enemies” to get Britain building.

Earlier on Thursday, Starmer declined to put a timeline on when he would reform the leasehold system or introduce new protections for renters but said it can be done “speedily” if Labour enters government.

“They’re the sort of changes that we can do pretty quickly,” he told reporters at a housing estate in York, where he spent the day promoting Labour’s plans to fix a housing crisis that’s hobbled younger Britons in particular, with prices rising relative to earnings since the Tories took power in 2010, while the age of the average first-time buyer has increased to 32 from 30 in the past decade.

Greater use of ministerial powers provides another potential avenue for Labour to speed up delivery. The number of planning applications reviewed by the secretary of state — known as a “call-in” — dropped to five in the previous financial year from an average of more than 50 per year during the 2000s, Bloomberg calculations using data from the Planning Inspectorate and National Archives showed earlier this week.

Other policies announced in Labour’s manifesto included a pledge to provide mortgage guarantees to first-time buyers. Under the proposals, the state will act as a guarantor for prospective owners unable to save for a large deposit, making permanent an expiring government scheme offering 95% loan-to-value mortgages.

The mere mention of Britain’s planning system is usually enough to draw a look of disapproval from housebuilding enthusiasts. Development decisions are in the hands of depleted local councils, and objections from local residents can hinder ambitious projects. The number of planning applications for programs of ten homes or more slumped to the lowest in at least a decade in 2023, according to researcher Glenigan Ltd.

A Bloomberg investigation last year found that the average annual funding in local government planning departments has tumbled 44% since 2010, while the average number of employees in those teams has more than halved over the same period. Meanwhile, 80% of major planning applications were not resolved within the statutory time period of 13 weeks between October and December last year, according to government statistics.

Some industry experts aren’t convinced the planning proposals from either major party will be enough to boost supply while resources are so stretched.

“The planning pledges from the Conservatives and Labour are not detailed enough,” said Zoe Bignall, head of UK development advisory at broker CBRE Group Inc. “Right now, they are just words — we need to know how it is going to really unlock housing delivery.”

--With assistance from Damian Shepherd.

(Updates to add Starmer in fifth paragraph)

Most Read from Bloomberg Businessweek

©2024 Bloomberg L.P.