How does bad policy get made? The development sector has weathered more than its fair share in recent years, and doubtless will face more in the future – despite repeated promises to increase housebuilding. To understand why bad policy happens, you have to look at how Whitehall and Westminster actually work.
One major cause is the war of attrition that is Whitehall policymaking. While governments have manifestos and political agendas to deliver, every department and Secretary of State has their own priorities, often at odds with one other. Each also has the tools to defend those interests. The Cabinet system, meant to secure collective agreement, empowers departments to grind each other down and extract concessions. One former Minister, for instance, managed to water down brownfield regeneration planning reforms claiming they would cause “overdevelopment” in their outer London constituency.
Another source is backbench pressure. Local housing targets were diluted because 60+ MPs – quietly backed by many in Cabinet – signed amendments demanding their abolition. Warnings that this would choke off land supply and stifle housebuilding were judged less dangerous than ignoring MPs warning of electoral collapse. (Which, of course, happened anyway.)
One could argue these constraints are part of a healthy democracy. Cabinet government requires compromise. MPs should be free to stand up for their beliefs. But the most damaging cause of bad policy is something else: the lack of institutional understanding within government about how their proposals are likely to impact development.
Time and again, new taxes, regulations or levies on the sector are presented to ministers as painless interventions that will be absorbed by industry or passed through to land values. Officials assure ministers their modelling shows no impact on viability in the short or long term. Rarely do assessments consider how burdens interact with existing local or national requirements, or how cumulative costs reduce landowners’ willingness to promote sites for new homes.
Few policies were as ill-considered as second staircase requirements. Having initially consulted on mandating them in towers above 30 metres, the housing department decided to extend the requirement to all buildings over 18 metres. They argued it was “morally right” and there could be no conflict with the advice of bodies like the National Fire Chiefs Council and the Royal Institute of British Architects. The policy was bizarrely presented to No 10 as ‘pro supply’. The inevitable reduction in saleable floor space and viability were dismissed as problems to solve later. When decisions are framed as moral absolutes rather than carefully weighed trade-offs, coherent policy becomes impossible.
The point here is not to demonise individuals, but to highlight how poorly the system grapples with the economic and financial realities of development. Too often, government treats private developers as untrustworthy adversaries rather than partners. Too often, its policymaking rests on shaky assumptions and poor analysis, with little understanding of how incremental burdens accumulate on the ground.
To get better housing policy, we need braver politicians. But we also need to reform the way policy is made: recognising trade-offs, demanding serious economic analysis and addressing the actual constraints faced by those delivering homes. Until then, governments promising to increase housebuilding will continue to fail.
Jack is the Director for Housing and Infrastructure at Public First. He was previously a No 10 special adviser, advising two Prime Ministers on housing, planning and levelling up policy for over four years. Jack pushed pro-housing ‘YIMBY’ planning reforms at the top of government for a number of years. Before working as a special adviser, Jack was Head of Housing at the Policy Exchange think tank.
