New legal loophole allows developers to shirk affordable housing obligations. Photo: Christopher Furlong, Getty
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Developers able to demolish affordable housing provision

A new law is allowing property developers to wriggle out of their affordable housing obligations.

A Bill that was quietly approved last year is allowing property developers to get out of their contractual agreements with local authorities to build or fund affordable homes.

The Growth and Infrastructure Act 2013 introduced new guidelines last April for developers to appeal their affordable housing obligations, if they could prove they would not make a “competitive return” on their developments if they adhered to them.

These obligations require developers to include a prescribed number of affordable homes in residential complexes they build, or else negotiate paying a subsidy to fund those affordable homes being built elsewhere in the nearby area.

Many people would agree that for councils to confer some responsibility for affordable homes onto developers in this way is only fair. After all, left to their own devices, most developers seek to maximise profits by focusing almost exclusively on building lucrative executive accommodation.

The new rules, shoe-horned into the Town and Country Planning Act, mean that residential developers can fight their way out of their obligations, despite having agreed them as a condition of gaining planning approval.

A developer simply has to argue that honouring their agreed contribution towards affordable housing has become commercially “unviable” for their business's development.

The government has introduced this loophole based on the idea that differing economic conditions between the planning stage of a development and its construction or completion can render initial agreements to build or fund affordable housing “unrealistic”.

Not only does the new appeals process seem unfair in offloading all commercial risk from developers on to local councils, but it also appears open to exploitation by rapacious developers who might present cases of confected “economic unviability” in order to maximise profits.

Some recent waivers issued by councils are worth examining. Last October Oldham Council was left £450,000 out of pocket after waiving the subsidy payment that developers Wiggett Construction had agreed to pay in lieu of making a fifth of homes in their new site in Greenfield “affordable”.

The company had originally agreed to pay £700,000 in three stages. Having paid the first installment of around £230,000, the company was due to pay the second upon the sale of the 45th property on the site. Oldham Metropolitan Council decided to waive the subsidy when Wiggett was just one house sale away from that benchmark, however, leading to outrage from local residents.

The same council also allowed another developer, Tamewater Developments, to escape paying more than £280,000 in agreed affordable housing subsidy earlier this month.

According to Construction News, 10 appeals are currently under consideration by the Planning Inspectorate to reduce or eliminate affordable housing obligations under the new law.

Among them are bids to remove requirements for 290 affordable homes in a Gloucestershire development and a £9 million contribution towards affordable housing in Blackpool.

As many developers are only just waking up to the possibilities of this new loophole, the impact on the number of affordable houses built is yet to be realised.

In order to appeal, developers must submit appropriate up-to-date evidence that overturns the original viability appraisal and indicates that they will not make a competitive return under current market conditions.

The crucial question is, of course, what benchmark profit margin equates to a “competitive" return? The government guidance does not spell it out. Industry experts suggest that most developers expect to make in the region of 20 per cent profit. Are local councils simply allowing developers to avoid paying their contribution towards affordable housing if it threatens their usual profit margin?

When the demand for affordable housing has reached such exorbitant and desperate levels as it has across the UK, developers should not be allowed to renege on promised contributions towards their provision whether it threatens their profit or not.

Lucy Fisher writes about politics and is the winner of the Anthony Howard Award 2013. She tweets @LOS_Fisher.

 

Nicola Sturgeon and Tony Blair. Photo: Getty
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Nicola Sturgeon's SNP, like Tony Blair's New Labour, is heading for a crash landing

The fall of Tony Blair should be a set text for anyone wishing to know what happens next to the SNP.

If there was one thing the SNP and New Labour had in common, it was the hope. Both offered themselves as a burning torch of optimism to publics that had become tired of the same old gang running things in the same old way. Both promised a fairer, more equal society and a fearless embrace of the modern world with an appealing freshness and energy. The voters bought it: both won big, repeatedly.

The thing is, if you’re elected on a mandate to be different, you’d better be different. In many areas, for a long time, New Labour managed to be just that. The smiling PM with the huge majority pushed through radical policies, some of which even worked. Tony Blair’s methodology was so successful and so convincing that the Conservatives and the Lib Dems reshaped themselves in his likeness. Arguably, a form of New Labour won in 2010 and 2015.

But, as they say, it’s the hope that kills you. When the inevitable attritional realities of governing start to weigh, when you make, as you will, bad decisions, when the list of enemies grows long, when you’ve just had your time, you’ll fall like all the rest – only, when you’ve soared so close to the sun, you have that much further to plummet.

The fall of Blair and of Labour should be a set text for anyone wishing to know what happens next to the SNP. Sunday night’s debate between the Scottish party leaders was, I think, a foretaste of what’s coming – a public that until recently was politically and emotionally invested in the Nats is growing restive. In time, this will turn to disenchantment, then anger, then revenge at the ballot box. This is the unbreakable cycle of democratic politics.

Some of us have warned since the start that the SNP had over-promised and could only under-deliver. Its raison d’etre is independence; everything else - literally everything else - is just another brick to build the path. And so education reform cannot be either radical or unpopular, even if it needs to be so to work, because the SNP cannot afford to alienate teachers or the teaching unions or parents. Bricks, you see. Same with the NHS and doctors and health unions and patients. All the separatists have done – all they could have done, given their nature - is deploy the rhetoric of the radical while in reality body-swerving hard choices and conflict at any cost. And where they have found themselves taking flak, they’ve pointed south to Westminster: "it’s no’ our fault, it’s theirs".

But voters show signs of wearying of the predictable blame game and waking up to the time-limited strategy of show-over-substance. Middle Scotland is either ignored or maligned by the middle-class socialists who drive the nation’s political debate, but it is where elections are won. The SNP has secured the support of enough of these people to win every recent election in style, but somewhere along the way the party seems to have forgotten this was a mandate not for independence, but for good government. Ten years in to SNP rule, each new audit of public services seems to wail like a warning siren – things aren’t just not improving, they’re getting worse. The SNP is not keeping its part of the deal.

So, during Sunday night’s debate it was Nicola Sturgeon, not Ruth Davidson or Kezia Dugdale, who found herself in the audience’s cross-hairs. It will have been a strange experience for a woman more used to public adulation and a clamour for selfies. There were the teachers, who complained about the damp squib that is the Curriculum for Excellence, the SNP’s flagship education policy; who pointed out that a fifth of primary pupils are leaving without basic literacy and numeracy skills; and who warned that lowering the standard of exams in order to push up the pass rate was not a mark of success.

Then there was the nurse who said she had been forced to use a food bank (the existence of which has been used repeatedly by the SNP as a stick with which to beat the Conservatives and Westminster): ‘I can’t manage on the salary I have [which is set by the Scottish Government]. You have no idea how demoralising it is to work in the NHS. Don’t come on your announced visits, come in in the middle of any day to any ward, any A&E department and see what we’re up against.’ She delivered the evening’s killer line: ‘Do you think your perceived obsession with independence might actually cost you… in this election?’

The list of reasonable criticisms is growing and will grow further. The ideological obsession with free university tuition for Scottish students is increasingly seen as a sop to the better-off, while in England the fee-charging regime has seen the number of students coming from poorer families climb. Ms Sturgeon’s demand for a quick second independence referendum, when a worried middle Scotland was focused on what Brexit might mean for its future, was tone deaf.

The SNP has another problem (one that New Labour, for all its flaws, didn’t face): its doctrine of infallibility. The Nats’ constitution explicitly prohibits its elected members from criticising the party, its policies or each other. While total unity is useful when you’re on the climb, it starts to look bonkers when the cracks are showing. Allowing public self-criticism, far from being a sign of weakness, is a necessary vent for inner tensions and a sign to voters that a political party is something more than a cult.

That ‘cult’ word has long dogged the SNP and its supporters. The party has tried hard to normalise its electoral appeal while keeping the flame of independence burning bright, but it has been a difficult balancing act. The pro-independence mob is an ugly thing when it is unleashed (and it has suited the leadership to open the cage at times). Claire Austin, the nurse who criticised the First Minister on Sunday, has found herself at its mercy. Immediately after the debate, the Nats briefed (wrongly) that she was the wife of a Tory councilor. The SNP branch in Stirling said Tebbitishly that if she was having to use food banks "maybe she needs to tighten her belt a bit more?" Joanna Cherry, a QC, MP and the SNP’s Home Affairs spokesperson, was forced to publicly apologise for spreading "Twitter rumours" about Ms Austin.

The ravening horde has largely kept its head down since the 2014 independence referendum, but we now see it hasn’t gone away - it is not enough for the SNP’s critics to be debated, they must be destroyed. This isn’t the behaviour of a normal political party: it’s the behaviour of a cult.

I might be wrong, but I have a feeling that when the SNP does fall it will fall quite quickly. Its belief in its infallibility, its inability or unwillingness to do self-deprecation or apology, will increasingly aggravate voters. There is nothing to suggest the current public policy failings will be addressed, and plenty of signs that things will get worse. How, then, do you arrest your fall?

The SNP offered hope and promised it was different, and the voters believed. The sense of betrayal could make for a very hard landing indeed.

Chris Deerin is the New Statesman's contributing editor (Scotland). 

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