A hung parliament demands a greater focus on cross-party, collaborative working to unlock housing delivery.
As the dust begins to settle after the General Election, those working in construction have had an almighty challenge working out just what a hung Parliament might mean. June 8th was obviously a bad one for the polling industry, but what will the consequences be for the housebuilding sector?
The most immediate result was that the Minister for Housing and Planning, Gavin Barwell, lost his seat, making the appointment of a replacement a pressing priority for Theresa May. Barwell deserves credit for his role in the Government’s sensible and very ‘pro-SME’ Housing White Paper. At a time when smaller housebuilders were crying out for some real action on increasing the availability of small sites for development, the White Paper has a pleasing focus on this and should lead in practice to a significant increase in the opportunities available to small scale builders and developers.
Barwell’s replacement, Alok Sharma MP, has a responsibility to ensure that the measures promised in the White Paper are delivered and implemented in full. Given that the Government has upped its housebuilding target to 1.5 million new homes from 2015 to 2022, Sharma has a huge task ahead of him and he will need to hit the ground running, getting to grips with his new portfolio very quickly. He’s the sixth person to hold the office in seven years. This is a high level of turnover for such a key ministerial position and the industry is hoping for more stability around this post in the coming years.
The wider implications of a hung Parliament are harder to gauge. The precarious balance in the Commons has given rise to the idea that cross-party collaboration will now have to drive the Brexit process. Both Labour and Conservative politicians have stressed that the scale of the task at hand, in terms of exiting the EU, demands a more consensual, bipartisan approach to negotiations. If such an endeavour can be undertaken in the spirit of cooperation, then is it beyond reason to hope that the same could apply to tackling the country’s chronic shortage of homes? While he was Chancellor, George Osborne had already begun to explore the possibility of taking big ticket spending decisions out of partisan hands through the creation of the National Infrastructure Commission, which was chaired by Labour’s Lord Adonis.
While there are substantial differences between the Labour and Conservative positions on housing policy, there is a general (albeit blindingly obvious) consensus that the only real solution is to significantly increase output. In a recent House of Lords report members of all stripes found grounds for agreement on one of the best ways to build more homes – expanding the output of smaller housebuilders.
Judging by the conversations we’ve had with leading politicians on all sides, there is general unanimity on many of the barriers currently preventing SME housebuilders from doing precisely that. Everyone seems to accept that there needs to be a significant improvement in the ability of smaller developers and new market entrants to access development finance. Likewise, we’ve heard few objections to our argument that there needs to be a real increase in the number of small sites available to smaller scale developers. Furthermore, the announcement earlier this year that councils would be allowed to raise planning fees in order to better resource their planning departments could have just as easily been Labour policy as Conservative.
Obviously, there remain big dividing lines between the two camps, most of which revolve around the type of homes that we are building, and how active a role the Government should play in financing development. It’s also possible that the principle of ‘English votes for English laws’ could allow a minority Government to press ahead with its housing plans, as housing is a devolved policy area and the Conservatives enjoy a comfortable majority within England.
Nevertheless, as I remarked upon last month, an interesting quirk of the election campaign was that the Conservative manifesto started to inch towards Labour territory when it came to housing policy, and it would seem there is the grounds for a real exchange of ideas on building more homes. In these extraordinary times, would it be so out of the ordinary for a real culture of collaboration to emerge?
Brian Berry is chief executive of the Federation of Master Builders.