Building Beautiful Commission seeks funding tweaks and tax breaks

A government commission on architectural design has called for changes to the way public funding is used to aid new-home delivery plus business rates breaks to aid high street shops.

The Building Better, Building Beautiful Commission’s 100-plus final recommendations also included a demand for councils to appoint a cabinet member responsible for placemaking and a senior officer with the same responsibility.

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March 25th, 2020, Manchester
Council treasury investment & borrowing

However, the government’s housing agency, Homes England, led by Nick Walkley, former chief executive at both Barnet and Haringey councils, came in for criticism for operating a land sale regime that failed to prioritise design quality.

Set up in 2018 with a wide-ranging remit to “tackle the challenge of poor quality design”, help build popular consent for new development and aid the nation’s struggling high streets, the commission’s final proposals were published last week and won support from housing secretary Robert Jenrick.

The key focus of the Living with Beauty report is the operation of the planning system: its headline recommendations involve ways that demonstrably good design founded on solid place-making principles can be embedded in the English development system and could even be fast-tracked through the process.

But it also examines the finance cogs that drive the development process. Recommendations include a proposal for a “Building Better Fund” that could redistribute development gains from more affluent parts of the country to not-so-well-off areas.

“In all measures of regeneration, we should remember that there is a great imbalance between different regions when it comes to the finance released by new development,” the report says.

“This is one reason why certain regions become left behind. Gains from development in the south east could be taxed by a Building Better Fund, to be redistributed to those regions, such as the north east, where the infrastructure needs for new developments and conscientious placemaking cannot be met from local receipts alone.”

The commission also suggests that the public sector should make long-term funding available to developers who achieve a “stewardship kitemark” that demonstrates a long-term commitment to schemes, in a similar manner of the great London estates.

It said that the fund could fill a gap in the market that would represent a new investment class and “might be administered nationally, although deployed in partnership with local authorities and Local Enterprise Partnerships”.

Additionally, the commission calls for the government to explore ways to even out tax discrepancies between long-term and short-term development approaches.

It said an expert commission should be set up to review options in more detail, working with HM Revenue and Customs, HM Treasury and MHCLG.

The commission said that in the longer term, ministers should look at reform of Section 123 of the Local Government Act 1972 – which covers local authorities’ powers to dispose of land – to end the legal obligation for councils to sell sites for “best consideration”.

The commission said that although the rules did not always mean councils could only sell land for the “maximum cash payment” they acted as a disincentive to long-term development models where public-sector land was in the mix.   

In terms of its remit to explore ways high streets can keep their vitality in a changing retail environment, the report suggested rebalancing the rating system to favour small shops.

“A good approach would be zero rating for single-outlet shops (or single in that settlement) below a certain size,” it says.

“A corollary for this would be an empty stores penalty, to encourage reoccupation.”

The report adds that supporting “less fragmented ownership” so that a more strategic approach to managing high streets became possible was also an important consideration.

In a highly critical section on Homes England, the report said the agency’s land-sale process was still failing to prioritise scheme quality over financial offers.

“This very urgently needs to change to ensure that the state is not effectively subsidising poor quality and ugly development, with insufficient focus on placemaking,” the report said.

In addition, trees “are very often omitted (or even taken out of schemes) due to local authority reluctance to take on the cost of planting and maintaining street trees”, the report said.

Housing secretary Robert Jenrick confirmed he was “interested” in the report’s proposals for a beauty fast-track.

“Where individuals and developers have put in the time to create proposals for well-designed buildings, which use high quality-materials and take account of their local setting, it can’t be right their planning applications are held up,” he said.

Jenrick also supported the call for millions of trees to be planted over the next five years.

He added in a speech launching the document that he wanted to be “the most pro-development secretary of state that this country has ever seen”.

Local Government Association planning lead David Renard said it was vital that the planning process was protected as part of the government’s response to the report, and that local communities had a say over their neighbourhoods.

“Planning departments also need to be properly resourced, and allowed to set their own planning fees, with taxpayers currently footing a £200m annual bill to cover the cost of processing applications,” he said.

“Planning is not a barrier to housebuilding with councils approving nine in 10 planning applications and are granting permission for more homes than are being built.”

County Councils Network housing and planning lead Philip Atkins said upper-tier authorities had a strong role to play in planning and place-making because they had the appropriate scale, outside city regions, to set the strategic vision to match new homes with necessary physical and social infrastructure.

“But shire areas they need the powers to enable them to set this strategic vision and to levy the funding required to deliver enabling infrastructure,” he said.

“This will be increasingly important if the government is to achieve its ambitions of levelling up the country and ensuring that everywhere feels the benefits of growth.”

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