A Relationship on Creaky Foundations
The tension and disagreement between Sadiq Khan and Michael Gove has carried over into the new year. Central to their discord is the London Plan, the spatial development strategy that outlines the vision for London’s future growth and infrastructure.
This ambitious plan, aimed at addressing everything from housing to transport and environmental sustainability, has hit a roadblock. Targets have not been met, and the plan is currently under review, a development that has notably peeved Mayor Khan. As both mayor and general elections approach, the stakes for both figures are high.
This article delves into the current state of affairs, examining the roots of the conflict and its implications for the future of housing in London.
What Housing Targets Are in the London Plan?
The new London Plan (i.e., the one that began in 2019 and runs until 2041) includes targets for new housing in the capital, along with strategy about how to achieve them.
These targets are only defined until 2029, however. They’re based on the capacity of land suitable for residential development as stipulated by the 2017 Strategic Housing Land Availability Assessment (SHLAA). This assessment doesn’t look beyond the next 10 years due to the ‘dynamic nature of London’s land market’. The Plan also uses the 2017 Strategic Housing Market Assessment (SHMA) to determine housing needs.
The target number of units to be built in London by 2029 is 522,870, with sub-totals for each borough. According to the 2017 SHLAA, there’s capacity for 40,000 new units per year on large sites of 0.25 hectares or more, while on small sites, 12,000 new units are possible.
Affordable Housing Targets
The Plan also states that every affordable housing provider that has an agreement with the Mayor must ensure at least 50% of their development programmes consist of affordable housing. For strategic partners, the minimum is 60%.
The Conflict
The conflict began after Michael Gove sent the Mayor a letter announcing that the London Plan would be subject to a review, since the targets therein had not been met.
As of December, Khan had delivered 38,000 new homes per year since the plan came into action in 2019, which is 15,000 below the annual target. The Mayor pointed out that despite the shortage, a government-set target of starting 116,000 affordable homes by 2023 had been reached.
He’s also been quoted saying that “in recent years, we’ve completed more homes of all types than at any time since the 1930s” and that London has out-built the rest of the country by 20%. He also said that work began on 25,658 affordable homes in the last year, up from 18,840 in 2021/22. This is despite claims that the Conservatives have regularly intervened to block new building in London.
Regardless, Gove accused him of focusing too much on affordable housing instead of meeting the overall targets. He said that having such a high percentage of affordable homes in every development brings significant costs that often prevent development from starting at all – blocking both affordable and overall housing targets.
As well as highlighting the shortfall of 15,000 units per year, Gove cited that the total units built in 2023 was 63,500 less than the actual need for that year, calculated by the standard method.
Gove Announces an Audit
The housing secretary announced that a panel of housing, council and legal experts would be reviewing the London Plan to discover what’s causing the bottleneck and look at how to speed things up.
In his letter, he refers to the large numbers of homelessness and households in temporary accommodation, saying that, “Under your leadership the GLA is failing to provide affordable homes for those that need them most.” He also threatened to strip Khan of his planning powers if he did not agree to an audit.
The Mayor said the review is a “desperate political stunt by Conservative ministers, and it will fool no one.”
Outcomes of the Review
The review was published on 13th February and states that the London Plan prevents development on brownfield sites (which are considered essential for meeting housing targets in the capital). This is due to complex policies that create viability challenges, especially for SMEs, which deliver the majority of London’s housing.
In addition, the findings show that only six Local Planning Authorities met their targets up to 2021/22 and that only four are in credit as of 2022/23. In addition, there has been a downward trend in building which could result in a shortfall of at least 150,000 homes by 2029 – if things continue to go the way they are.
What’s more, Greater London Authority data shows a slowdown in planning approvals. The total in 2018/19 was more than 89,000; in 2021/22, this figure dropped to 68,000 and in 2022/23, 40,200.
It’s been suggested that simplifying the policies within the Plan may increase delivery of new homes by 11%, which would equal 4,000 units per year. Gove has also announced £50 million of new investment which will be used for estate regeneration in London.
Another suggestion for how to catch up with the backlog was to introduce a new, overarching policy encompassing all the issues associated with developing on brownfield sites.
A spokesperson for the Mayor has been quoted saying the review was “nothing more than a stunt from the government to distract from their abysmal record of failure” and that “the mayor simply won’t take lectures from a government that has scrapped housing targets nationally and sent people’s rents and mortgages soaring.”
The review has been criticised for not being particularly useful and falling flat in its attempts to blame the London Plan for the housing shortage. The Plan acknowledges that other economic factors are also to blame, but some critics point out that brownfield sites are problematic by nature when it comes to viability, due to issues with land ownership, decontamination, and infrastructure costs.
Other criticism states that the review was too brief to provide any true recommendations for such a complex situation.
Conclusion
The review of the London Plan has laid bare the complexities and challenges of meeting the capital’s housing needs. The findings highlight the critical need for reform and innovation in London’s approach to housing development, particularly on brownfield sites and in fostering conditions conducive for SMEs to develop.
Looking ahead, there’s the potential for significant policy shifts and strategic realignments. Gove’s announcement of a £50 million investment for estate regeneration hints at possible avenues for progress, and the suggestion to simplify policies to boost housing delivery by 11% presents a tangible goal.
However, achieving consensus on how to implement such changes will be no easy feat. The backdrop of approaching mayoral and general elections only adds to the pressure for both parties.
Will they find a way to settle their differences for the greater good of the city, or will the foundations of their partnership continue to creak under the weight of unresolved disputes? Only time will tell.
If you as a developer are seeking innovative solutions for planning and managing your projects, SDS has a suite of market leading software to serve you every step of the way, from appraisals to project management. To learn more or book a demo, contact us today.