Housing minister supports report proposing planning permissions by replaced by “delivery contracts”

The housing minister has backed a report authored by David Cameron’s former housing advisor recommending that planning permissions be replaced by “delivery contracts” which set build timelines.

The report by former No.10 advisor Alex Morton for the Thatcherite think-tank the Centre for Policy Studies, also recommends supplying public land to SME builders to prevent local firms being “squeezed out of the system”.

It also recommends doubling down on the recently introduced Housing Delivery Test by which councils are penalised if the number of homes built doesn’t match local targets, recommending this be made a central part of the planning system.

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The proposals for more planning reforms come despite the fact the government is already engaged in a series of the most radical planning reforms for a generation, under which large areas of land are to be zoned for growth with automatic outline planning permission in stripped back local plans.

Pincher welcomed the report’s focus on SME builders, saying it was “a very welcome contribution to the debate around both housebuilding and planning reform”. He said: “I am particularly pleased that the report has highlighted the important role that SMEs can and should play in delivering more homes and helping the United Kingdom’s economy build back better.”

The proposal to replace planning permissions with delivery contracts would see developers sign up to agreed build-out timelines. Where builders are unable to deliver the homes, the report said the land should be instead passed to local SME builders at an agreed price.

The report, called “The Housing Guarantee”, said that planning permissions were currently a “one-way gift” which boosts the value of the land but gave no obligation to build. It said this created a bottleneck that concentrated land supply in the hands of large housebuilders to the detriment of SMEs.

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The six largest builders control around a third of the entire market, the report said, while the proportion of homes built by SMEs has dropped to around 10%, compared to 40% in the 1980s.

The report envisages setting up panel of local housebuilders which can benefit from public sector land, alongside “challenging” delivery targets designed to ensure the quality and diversity of local housing supply.

The proposals from the influential think-tank come after the government late last month pushed ahead with controversial planning reforms giving owners of commercial property the right to convert buildings into homes without planning permission.

They also come ahead of an expected Planning Bill designed to take on the proposals in last year’s white paper, which has been earmarked for the autumn.

Morton, head of policy at the CPS, said the current reform plans were “very welcome”. However, he added that “we need to focus on delivery and learn from previous attempts to fix England’s housing supply problems”, and called for his proposals to be wound into the forthcoming bill.

He said: “The reforms we are proposing would help create a new, better planning system that focuses on ensuring delivery, working alongside the other proposals government is bringing forward.

“We have a once-in-a-generation opportunity to fix these issues, and with a Planning Bill under way, now is the time for action.”