Rachel Reeves’ planning reforms lay good foundations

Can the government's efforts to "revive construction in Britain" be successful?

Rachel Reeves has outlined the initial actions of the new Labour government to improve the core of Britain's economy. During a speech at the Treasury, the new chancellor introduced a set of planning changes aimed at kickstarting infrastructure projects, such as constructing 1.5 million homes within five years and creating a clean energy system as promised in the government's manifesto. While this is a positive beginning, the actual implementation of these projects may face challenges, requiring the government to ensure that its reforms are successful in the long run.

New Government Showing Commitment To Planning Reform

The government is sticking to its promise in its manifesto, which was clear about putting construction first even if it goes against community wishes. Reeves pointed out a problem with always rejecting compromises in the current situation. Local authorities must come up with plans that meet housing goals, even if it means reconsidering protected green spaces. If a development is thought to be good for the economy but gets blocked by local authorities, deputy prime minister Angela Rayner is ready to step in and review the situation.

It is great to see the government showing a strong commitment to reforming the planning system, which has been a barrier to construction in England for a long time. A recent study by the Institute for Government on housing has found that the most successful planning reforms in the past twenty years have been those that encourage local authorities to approve more building projects. Delays in the planning process have also hindered efforts to increase renewable energy and decarbonize the power system, so it is important to make reforms to speed up progress in these areas.

Where Will The Government Build Next?

The government plans to release a preliminary National Planning Policy Framework before August. The key issue is what the required housing goals will entail. These goals may follow the current formula, which considers population projections with a 35% increase for the 20 largest cities, or they could be adjusted based on the government's economic strategy and national plans for energy and infrastructure. Additionally, the government must determine how much new housing local authorities should plan for on their own, and how much will be provided through the new towns program.

No matter what decisions the government makes, it will need to gain strong agreement for its construction plans. Setting targets for housing has always been a controversial issue, and different versions have faced pushback from politicians – just ask Boris Johnson about the "mutant algorithm," or Michael Gove about why he changed targets in 2023. Rachel Reeves recently announced the lifting of restrictions on new onshore wind in England, which were previously put in place due to concerns about local opposition. As we require more renewable energy generation and grid upgrades, the new government may face opposition, even if it's just from vocal minorities. The government's planning reform programme will be put to the test when the challenges of building new infrastructure arise.

Challenges For Government's Building Plans

Changing the way we plan things won't solve all the problems with building in the UK. The housing market is not doing well right now, the cost of materials is increasing, and there aren't enough skilled workers in certain industries, like construction. The UK is also trying to get materials and workers from other countries, especially for building energy infrastructure. Reeves said that the private sector will be doing most of the work in her plans. However, in the past, governments only managed to build more than 300,000 houses a year when there was a mix of state and private funding.

There are many tasks still ahead, but it is promising to see the Treasury actively involved in planning reform. Considering the difficulty of the situation, this is a good beginning.