Sir Nigel Wilson says ’awful’ delays particularly damaging for a start-up manufacturing business

The chief executive of insurance giant L&G has blamed “awful” delays in the UK planning system for the difficulties the firm has faced in getting its modular housing business off the ground.

In an exclusive interview with Housing Today, L&G group chief executive Sir Nigel Wilson said it took an average of seven years for his firm start building out a development after buying a site in London, with similar problems elsewhere, and that this had hampered the growth of the modular start-up.

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Sir Nigel Wilson at the launch of L&G Modular’s Bonnington Walk development in Bristol last month

Sir Nigel compared the situation unfavourably with planning regimes in other parts of the world such as the US, where he said planning outcomes were much more predictable.

L&G Modular is behind a number of high profile housing schemes across England but has taken a long time to grow and six years on from launch has racked up more than £170m in losses and brought in just over £10m in revenue.

Wilson, who in September turned down the offer of a cabinet job in Liz Truss’ ill-fated administration, said: “The challenge is the speed of planning in the UK, and the interaction between planning and manufacturing isn’t great.

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“America has a very rigid system. You just go through it and it delivers predictable outcomes. The UK has a terribly unpredictable system doesn’t always deliver good outcomes. Planning is such an awful problem in the UK.”

The former Stanhope exec added that the issue was compounded because councils were concerned about the use of new technology in modular housing, and the firm’s limited pipeline of sites. “It’s different for build to sell because you’ve got hundreds and hundreds of sites, and you build that portfolio over a long, long period of time,” he said. “When you’re trying to start up new business models in a country that’s just got slow planning, it’s very, very hard. How do you get to critical mass?”

Wilson’s comments come amid increasing concerns over lengthening planning delays in the UK, with government data showing the number of planning permission granted recently dropped to the lowest level for a decade. Planners and developers have blames a combination of long-standing funding cuts, local authority working from home practices and local authorities stopping work on local plans for the hiatus in decision-making.

Last month L&G Modular reported a £37m pre-tax loss for the 2021 calendar year despite reporting its first revenue, of £12.2m. The firm claim a development pipeline of 1,200 homes but has a target to be building 3,000 homes a year from its 550,000 sq ft modular housing factory in Sherburn-in-Elmet, near Leeds.

Click here to read the full interview with Nigel Wilson