Part I
Planningās Changing Context
1 Planning and Austerity
Introduction
Austerity has been an overriding narrative in the UK since the economic crisis of 2008. It has created the context within which planning practice is conducted within England. In particular, the private sector has an expectation of a continuing low economic performance. The recovery from the 2008 international economic crisis has not reflected what occurred following earlier crises and has been slower in the UK. It has not seen a return to the growth in income trajectories that were the norm before 2008.
This has put pressure on governments to reduce public sector expectations for developer contributions for social and affordable housing, while providing financial incentives for housing supply despite increases in company financial performance (Walsh 2017). While commentary on the effects of austerity has primarily focussed on the consequences of reduced budgets in the public sector (Lowndes and McCaughie 2013; Peters 2012; Grimshaw 2013), it has also had a considerable influence on the context for development and places in the operation of planning and delivery. Austerity has influenced investment confidence and levels of construction activity, which in turn have encouraged successive UK governments to increase their efforts to deregulate planning (Laffin 2016). Austerity has also made institutions, including pension funds, more risk averse in making capital investment.
The private sector has also changed during this period, particularly through its expansion in staff and consultancy firms (Geoghegan 2016). Since 2010, the government has adopted a more laissez-faire approach to regulation on developers for financial contributions. The government has promoted deregulation through the increased categories of development that have deemed planning consent including changes from offices to residential use (Clifford et al. 2018).
In this chapter, there will be an initial review of austerity practices in the public sector within England, particularly since 2010, when a Coalition government was formed and operated for five years, until 2015. It will consider the effects of this culture and narrative on planning. It will also consider what may be emerging as public-sector bodies, including local authorities, seek to regain some control over their own activities and policies, particularly using planning tools that are available to them.
The Coalition government (2010ā2015) pressured local authorities to increase the number of planning consents approved for housing (Wilcox and Perry 2014). At the same time, there was a reduction in staff in the local authority planning departments to deal with these promoted upsurges in planning applications (Arup 2015; NAO 2014a). However, planners and local politicians have been frustrated to see that planning permissions have not been converted into development and stay on the desk (McAllister et al. 2016; Burroughs 2015). At the same time, pressures on welfare services, the loss of EU workers following the Brexit referendum (Mohamed et al. 2017) and the rise of the gig economy have all contributed to lower levels of unemployment than those experienced in the UK since 1977 (Taylor 2017). Notwithstanding this, there have been major consequences on the revenue budgets of public services, where failure to maintain levels of income from government has had major effects on service delivery and, in some cases, the availability of facilities such as libraries and childrenās centres. While all services have suffered from financial pressures and cuts, planning staff have been reduced more than other services (NAO 2016).
Why Austerity?
Austerity is a political choice (Bailey et al. 2015) focused on reshaping the state. Its role in determining the priorities, programmes and expenditure of local authorities has been concerned both with the specific choices (Overmans and Noordegraff 2014) but also the wider blame-shifting culture that this has posited (Hood 2010; Cochrane 2016). In England, it has primarily been associated with attempts to change the underlying philosophy of the welfare state away from meeting need to more minimal and market-based services, frequently provided by contractors. The effects of the āage of austerityā on local government since 2010 have focussed on the efficiencies and cuts that have been made in specific services (Lowndes and Pratchett 2012; Lowndes and McCaughie 2013) and draw upon the legacy of similar practices that have been in operation since the International Monetary Fund (IMF) crisis in 1976 (Pierson 1994; Morphet 2008). It has also focussed on the transfer of services and social responsibility to voluntary and community organisations that have taken on the operation of libraries, food banks and other social support (Clayton et al. 2016), including neighbourhood planning (Brownill 2017). Lowndes and Gardner (2016) have also argued that local authorities have been nudged into innovating through new institutional structures. These have been both within the organisation and externally with neighbouring local authorities in larger functional economic areas (FEAs) to improve their efficiency but also to increase their voice with government. Other commentators suggest that this scalecraft (Fraser 2010) has been a means of shifting blame for decision making (Haughton et al. 2016) in a form of āscalar dumpingā (Shaw and Tewdwr-Jones 2017).
Osborneās Austerity 2010ā2016
In the 2010 general election campaign, the Conservative Party used the economic crisis narrative as a means of promoting change and then used the Coalition government as a means of underpinning its credibility (Hayton 2014). The austerity programme introduced by the Coalition Chancellor of the Exchequer, George Osborne, was a political rather than an economic programme. Gamble (2014) argues that the narrative of austerity was an important exercise of statecraft to assist Conservative politicians in gaining popular confidence in their responses to the 2007ā2008 economic crisis. They did this by creating distance between the incoming Coalition and outgoing Labour governments. There were also wider implications of this approach. The Chancellor used the mantra of austerity to promote a reduction in the size of the state, based on a long-held view that the public sector āstoleā resources from the private sector and did not allow it access to the labour market (Skidelsky 2015). Osborne also argued that greater budget cuts would lead to a speedier reduction in the national debt (Gamble 2014).
The 2008 global budgetary crisis was amplified by the lack of preparation for the crash by the leading Western economies represented in the G20. The US, Germany, the UK and France together with Japan had to take immediate action to prevent financial catastrophes. Once this period had stabilised, each country then took its own action to deal with the issues that had contributed to the crisis ā banking practices, unsecured loans and housing bubbles. Within the European Union (EU), the European Commission (EC) has responsibility for macroeconomic policy with the European Central Bank. The EC undertook a review of member state macroprudential policies and adopted a pan-EU policy framework that has been reviewed annually (CEC 2017). It also commissioned an assessment of the effectiveness of the operation of the single market (Monti 2010) that was followed by Europe 2020 (CEC 2010), a programme of action across all member states that included specific objectives to remedy the weaknesses in each of them. This was also accompanied by the Territorial Agenda for the European Union, which set out some of the spatial approaches to achieving this wider economic agenda (CEC 2011). The EC adopted national reform programmes accompanied by six monthly reviews of progress (CEC 2017).
As part of this process, the EC diagnosed the UKās macroeconomic weaknesses as the operation of the housing market, the delivery of infrastructure and the operation of the planning system together with weaknesses in youth skills. The weaknesses in the housing market were identified as a lack of flexibility in the housing stock, which did not support labour mobility, a practice that has always been associated with the success of the US economy and higher productivity. The role of planning and the slow preparation of local plans by local authorities and incipient Nimbyism were also identified as restrictive on the provision of new housing to support the UKās growing population. These findings on the working of the UK housing market were also supported by the work of the Organization for Economic Cooperation and Development (OECD) (AndrĆ© 2011; Havrylchyk and Kierzenkowski 2015). Infrastructure and delivery were addressed through the 2008 Planning Act but as Morphet and Clifford (2017a) show, reforming the planning system does not necessarily provide more infrastructure delivery.
This EC diagnosis was significant, as three of four UK economic weaknesses identified had a strong relationship with local government core responsibilities. During Osborneās tenure as Chancellor, until July 2016, the EC maintained their assessment of the weaknesses in the UK economy despite many initiatives and speeches on the part of the Chancellor, particularly in his hard hat, Hi-Viz jacket mode, to talk up confidence about his actions and the effects they were having in addressing them.
In addition to these concerns, austerity policies were focussed on reducing expenditure on government programmes. The triple lock guarantees on income for pensioners made by the Prime Minister in 2010 meant that the austerity focus was placed on other major areas of public expenditure, including welfare benefits and local authorities. Although some funding was protected for major infrastructure projects, the pressure to deal with the housing market was largely focussed on two elements: expanding the volume of housing in the private rented sector and building new housing to maintain political commitments to home ownership (Hodkinson and Robbins 2013; Taylor-Gooby 2012). The government also intervened through a range of policies to remove security of tenure for existing local authority housing tenants, to stimulate local authority rights to buy sales and to make housing association properties subject to right to buy, thus removing even more dwellings from the social and affordable housing stock. The government also provided regulatory support for those purchasing housing for rent ā ābuy to letā ā that increased the relative proportion of renters in the UK (ONS 2017).
The pressures on local government services were increased through the course of the 2010ā2015 Parliament, both directly through cuts to local authority budgets and also through the pressures placed on other areas of public expenditure, including benefits and other measures of financial support for the unemployed and disabled. These central government welfare reductions also placed pressure on local authorities not least for accommodation for the homeless. As Morris (2016) demonstrates, the re-construction of government policy has been a product of statecraft where specific groups have been promoted or vilified using austerity narratives as a means of achieving underlying structural shifts in institutional relationships between the central state and local governments.
The effects of austerity on individual local authorities have varied. One study (Zurich Municipal with Solace 2016) demonstrated that the differences in approach and culture within local authorities have had major implications between those pursuing more innovative approaches to finance and others regarding these as risky, preferring to take more cautious and traditional approaches. However, all local authorities responding to this survey identified risks inherent in the governmentās imposed austerity approach.
Austerity in the Public Sector: The Response from Planning?
While much of planning in the public sector is undertaken by local authorities, there are several other public bodies that have planning functions. These include government agencies and bodies that have legal functions in relation to the environment. All have been affected by government austerity policies. The path to austerity in local government was set by Secretary of State (2010ā2015) Eric Pickles, who was deaf to concerns about budget reductions on local authorities and firmly held the view that local authorities should be generating more funding through their own activities (Morphet 2016). These focussed on two key areas. The first was using financial balances and assets and to create more finance through income generating activities. The second was through joint work between local authorities to save costs, including creating single or joint management teams or creating new combined authorities. Groups of local authorities were expected to operate more efficiently by securing the benefits of scale but they also could be more effective in raising funds through bonds secured on their assets.
The financial freedoms that allowed local authorities to use their assets in this way were included in s1ā7 of the 2011 Localism Act, although it has taken a while for local authorities to adapt to generating income. These new legal freedoms for local authorities...