In the end it was the numbers wat won it. Following weeks of speculation and back and forth between the Mayor’s office and MHCLG, the problem of London could be ignored no longer. The deal was struck.
To get there required skillful navigation the likes of which Magellan would have been proud. But with a fair bit of pressure and a sprinkling of the pork barrel, a consensus was found.
The pressure came from an increasingly beleaguered Treasury team. Concerned the OBR would strike out the “planning reform” headroom and therefore the Chancellor’s wafer-thin buffer.
Pressure also came from the headlines. Increasingly pointing to a desperate situation emerging across the London development sector. With it came a realization that the Government had no other options but significant supply intervention.
The politics of the deal
But even a few weeks ago, that pressure looked like it might abate. Tom Copley, London’s Housing Chief, had come out fighting to defend the status quo in a piece for Inside Housing. Give it more time, the numbers will recover, it’s all building safety related.
And would a deal of happened if Angela Rayner had stayed in post? Rayner was always spread thin and showed little interest or sympathy with the real estate sector.
The appointment of Steve Reed, a more pragmatic operator with a London seat perhaps was the difference. Reed is unusual for a Labour MP. He’s worked outside the Westminster bubble in the private sector. In a parliamentary party with limited experience of the world of commerce, Reed stands out.
I recall when I sat in Sir Eddie Lister’s Cabinet, the then Leader of Wandsworth. He would always speak fondly of his Labour counterpart in next door neighbour Lambeth.
Reed knew how to rub along. Perhaps he sometimes held his nose, but there was no obvious side to him. It also helps he ran a London Borough which saw big investors through the door and engineered the fruition of the Nine Elms.
Numbers, baby, numbers
In the fortnight before the package was announced, the doors of Whitehall opened up. Some very senior hitters from the development sector were called in to help brief on what was happening across the Capital.
And there was shock. The situation was far worse than had been understood. One senior figure used the term ‘entry level’ to describe the handle on development economics in Whitehall.
But by the end of the briefings and over the course of a few days, the penny had dropped. Whitehall might have been out of step, but it quickly realized there was a huge gap between policy asks and what development economics is capable of achieving. It was only going to get worse without intervention, much worse.
A very British fix
It’s a very British fix. It’s a consultation not a Written Ministerial Statement. Some of it is quite confused.
It will benefit the bigger beasts. It will offer little to SMEs and actually may weaken them. But it is something. And something is a start.
Late-stage reviews look set to remain. And if the current thinking is taken forward, there might be a range of late-stage reviews pathways. Some are already speculating the shadow of their author, no friend to the sector, still provides a protective veil to their existence.
However, it’s also a consultation. Why – because the Government knows it’s out of step with market data and needs a buttress if it is to go further as it might.
The industry is already organizing. Funders and developers will move quickly and with Steve Reed there is increasing optimism that there is someone willing to listen.
Medium to long term, this is all temporary. But no one is kidding themselves anymore. The current system doesn’t work. We won’t go back.
A new approach to development planning and how we fund the country’s housing and affordable housing must be found and before 2030.
