Let cities lead

When it comes to getting homes built, it really matters where powers and budgets are held.

Ed Miliband is today announcing that he would give power to England’s cities only “slightly less cautiously than the Coalition”, as Brian Groom from the Financial Times put it. Previews of Miliband’s speech in Birmingham today are suggesting that a Labour government would double the Local Growth Fund to £4 billion annually and would allow cities to bid for this pot. Housing and infrastructure is being mentioned as a major part of the deals that could be struck with cities under these plans. Reports also suggest that HCA assets and also powers to set up development corporations could also be included. The devil will of course be in the detail. As well as devolving investment budgets for housing they desperately need a boost if we are to build enough homes.

However, snarkiness aside, this is good news and the right direction for policy. For decades in England, we’ve struggled to decide the balance between local and central power. On housing in particular, there’s a natural tension between representing the views of local people such as through Neighbourhood Plans and ensuring that enough homes are built to give local families the chance of a home of their own, when others in the community oppose development. This has been an issue very much alive to the current government, with the Coalition’s planning reforms balancing community input with a presumption in favour of sustainable development under some circumstances.

We believe that local leadership is the best way to represent and address this unavoidable tension – so long as local leaders (whether council leaders, city leaders or combined authority leaders) have real budgets, real powers and also are seen locally to hold the responsibility for providing homes that local people can afford.

Other countries are often much better at this than we are. In Germany, France and the Netherlands in particular, local leaders have real responsibilities and powers to get new homes built. Peter Hall and Nicholas Falk have brilliantly captured some of the lessons on housing, infrastructure and growth from Europe’s best cities in their excellent recent book ‘Good Cities, Better Lives’. They argue that we should “free the cities” with stronger ability to fund their own development, collect revenue and in particular provide “strong planning” with cities taking a positive lead on master-planning.

I particularly like the sort of model used in the HafenCity urban redevelopment in Hamburg where city leaders took a strong lead, setting up a development corporation and launching competitions for private partners to lead on design and delivery. For building new homes, one of the best aspects of this sort of approach is that is ensures competition happens on the quality of the homes built. In England’s dysfunctional development system, far too much of the competition happens on land price alone, driving down quality (and the size of new homes) and driving up local opposition.

City devolution is an important part of any credible plan to build the homes we need and it’s something Shelter will be looking at closely in the coming months.

There is a real head of steam building behind these sorts of ideas, with Centre for Cities, Lord Heseltine and Andrew Adonis all offering new ideas. There’s much further to go, but at least we’re now debating the right issues.

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