What would A New Britain mean for Housing?

December 8, 2022

Yesterday, the Labour A New Britain plan for the UK’s future grabbed many headlines. Led by former Prime Minister Gordon Brown, it recommends a broad package of governance reforms, claiming to outline “a new relationship between our government, our communities, and the people”. Though most media attention has fallen on the plan’s new proposals to abolish the House of Lords and renegotiate political powers in Scotland and Wales, the proposals would also have significant impacts on the housing sector.

A New Britain identifies the UK housing crisis as a key political concern, with “affordability of housing” among the top ten priorities of poll respondents from England, Wales and Scotland. There has been a 19% increase in the average UK house price to income ratio between 2010-21, and A New Britain rightly identifies that this is due to the treatment of homes as “assets” that are valued more than incomes. The report says little of the UK’s rising homelessness, weak tenants rights, and an ageing, poorly insulated housing stock.

A New Britain does not represent a Labour policy proposal for managing housing (indeed, Starmer hasn’t even fully committed to its adoption). However, the report does propose the redesign of local planning and investment structures, and these are key levers for housing issues.

The devolution of planning powers are a central part of the package:

“Local government was once a proud and independent element of the UK’s public life. But it has been systematically disempowered, controlled, and underfunded, and the last decade of Conservative rule in particular has seen political power increasingly captured by central government.”

A New Britain proposes to reopen a series of powers for local councils, underpinned by a “constitutional requirement” that these are respected by future central governments. Possible new powers that councils could claim include several items linked to housing and development. Crucially, English councils would be more free to open Compulsory Purchase Orders and Community Purchasing Models (to enable local groups to back vacant land), run landlord licensing schemes for greater regulatory power over short term lets and Airbnbs, and set a wider range of building energy efficiency standards.

If they are given adequate resources to make use of them, such powers would certainly be welcome to many local authorities. Forms of community purchasing schemes have been used in Scotland since 2003 to enable local groups to buy space for community centres, protect woodlands, and initiate small-scale renewables projects. Landlord licensing is already used in some areas and for some property types to manage poor living conditions. The national Minimum Energy Efficiency Standards (MEES) scheme that currently requires privately rented buildings to meet certain energy performance levels has been in force since 2018.

But there are significant gaps. A New Britain overlooks some of the key structural barriers in our failing housing system. Relatively simple institutional reforms to the Land Registry and land purchasing process, for example, would provide vital information on land ownership patterns and sales opportunities, paving the way for more transparent, community-oriented land sale models to be developed, alongside targeted reforms to land taxation and planning permissions. A New Britain also fails to acknowledge the deep-rooted developer gridlock swaying house prices. The Compulsory Purchase Orders and Community Right to Buy that A New Britain proposes could help councils and communities win back space, but so too could Compulsory Sale Orders, stronger frameworks for the creation of public development corporations, community land trusts and community-led housing projects, and expanded powers over buy-to-let or build-to-rent regulations.

A New Britain also suggests a “double devolution” to increase “community involvement in local decision-making and shaping local services”. Again, the principle is laudable: greater community participation in planning and redevelopment decisions could indeed go a long way to shaping resilient, fair and effective investments in local areas, and A New Britain recognises that these will only be effective with concerted efforts to engage marginalised groups. But here too, the adoption of actual structures — such as Citizens’ Assemblies, participatory planning design and Planning Jury Services — that could be used to empower local engagement are relatively thin on the ground. Like the planning devolution recommendations, they are proposed as optional steps, open to councillors’ discretion.

Finally, though A New Britain avoids specific recommendations about tax and funding positions, it does offer some new ideas for public funding structures that could have important impacts on housing. Here, the report’s flagship proposals include allowing councils to design their own revenue-generating structures (including Urban Wealth Funds), reforming barriers to council funding streams and transforming the British Business Bank into a British Regional Investment Bank controlled at local level. Although the influence of private development on these new vehicles could be high, in principle these changes could mean greater investments in local building stock upgrades, improving public access to infrastructure, and new forms of community-led housing and land ownership. In particular, a British Regional Investment Bank could be a vital step towards a more diverse banking ecosystem in the UK, which could help guide credit and investment towards the real economy and reduce speculative activity in the property market.

Though timid when it comes to the specifics, A New Britain recognises important principles of local and community-oriented funding and decision-making. If leveraged properly, these could greatly improve the condition of housing stock, the availability of affordable homes, and fair investment in local areas. But while these recommendations open up the possibility of constructive new powers for local authorities, there is no guarantee that councils will be willing or funded enough to be able to implement them. So, whether A New Britain will be the ‘turning point’ for the UK economy, and UK housing, that Starmer claims remains to be seen.