Tuesday, 28 March 2017

An ill wind blows no good

Question marks over their viability threaten to make eco-towns undeliverable. Ahead of a government announcement on their future next month, Chris Ames investigates.

Plans to build a 5,500-home eco-town in Whitehill Bordon should be relatively straightforward.

The government is, after all, committed to the idea of eco-towns and, because the Ministry of Defence owns the land, it can also help make the scheme viable.

Negotiations over the land are still ongoing, however. A viability study into the scheme, commissioned by government, identified the availability and price of the land as the ‘greatest costing uncertainty’ for the scheme.

Will Godfrey, chief executive of East Hampshire Council, which is promoting the scheme, would like to see an end to the uncertainty.

‘I’m not suggesting that [the MOD] sell it below market value, but someone has to make sure the land comes into the pot,’ he says. ‘We are not dealing with the vagaries of the private sector here. The decision levers rest with central government.’

Whitehill Bordon is not alone in its uncertain position. Two years after ministers floated the idea, prime minister Gordon Brown’s grand eco-towns project may - or may not - be about to come to fruition.

The Communities and Local Government department is expected to make a decision about the 12 remaining candidates next month, amid signs that ministers have got cold feet.

Will the majority - if any - of the schemes ever get off the ground? And if they do, will they meet the government’s original ambitions? Missed deadlines and a constant lowering of expectations have caused many to doubt they will.

In May 2007 Mr Brown, then prime minister in waiting, promised five environmentally friendly new towns as part of plans for 3 million new homes by 2020. The CLG said these would be built by 2016. A few months later Mr Brown said there would be 10 eco-towns by 2020.

Amid fierce local opposition, political indecision and poor quality candidates, these promises have proved impossible for the CLG to deliver. Now it only talks about ‘anything from one to 10’ schemes making the final shortlist and anticipates that the first eco-towns will merely be ‘under development’ by 2016.

The department has also stopped claiming that the new towns will make any serious contribution to the 3 million new homes target. Instead it stresses the ‘exemplar’ benefits of a ‘quality not quantity’ approach.

Earlier this month, then housing minister Margaret Beckett raised the possibility that no schemes would get ministers’ approval. But a CLG spokesperson says that while the department would be disappointed if this happened, ‘we are confident that a number of locations can meet the tough standards that we have set’.

Expert opinion
While some schemes are itching to get the go-ahead, key documents published by the CLG suggest that others are a long way from coming to anything.

A draft planning policy statement and a series of sustainability appraisals into proposed schemes were launched last November, two months late, and found only one of the 12 shortlisted bids, in Rackheath, greater Norwich, was ‘generally suitable’ for the programme.

But the CLG stressed that the vast majority of the schemes had the potential to be eco-towns, with more work.

Inside Housing has now discovered that a second, more recent, study of the candidates’ financial viability did not appear to include full financial assessments that had been prepared for the government.

This study, published in March and compiled by a team of consultants led by Pricewaterhouse Coopers, provides advice to ministers on whether schemes will be viable without significant public subsidy, something on which the CLG has always insisted.

Again, it concludes that most schemes have the ‘potential’ to cover their costs, although two have been found to be dependent on as yet unidentified public funding.

The CLG says it has no plans to publish further assessments. But analysis shows that the study was not intended to be the last word on the subject.

The study was published as a CLG paper ‘with input from an external team of advisors’. The department insists that the financial appraisals within the document are ‘all Pricewaterhouse Coopers’ unabridged work’, but the paper itself described them as an ‘overview of the findings of the assessments’.

In addition, while ‘a series of sensitivity tests’ was completed to identify the impact on the schemes’ viability of varying certain assumptions,
only a selection of the tests was published.

The report states that ‘details of the full range of sensitivity tests completed will be included in the final report’, suggesting that there should have been another report.

The document also reveals that it used estimates of cost and revenue implications where a promoter did not provide the assumptions needed for an overview financial assessment to be carried out.

This reflects the ‘early stage of development that some scheme proposals are currently at’, the report says.

A spokesperson for the CLG confirms that the ‘published consultation drew on internal and external expertise to review proposals’.

A spokesperson for the Better Accessible Responsible Development campaign, opponents of a proposed 6,000-home eco-town at Middle Quinton, near Stratford upon Avon, complains that the study ‘only refers to potential viability, with numerous accompanying caveats and a woeful lack of transparency regarding the detail’.

She says the study’s findings on the Middle Quinton proposal contrast with those in a report published in February, commissioned by six councils in the area from consultancy CB Richard Ellis. This pronounced the scheme ‘not viable’, with a funding shortfall of £373 million.

A CLG spokesperson says: ‘The study is just one element of the assessment process and was published as part of our consultation.  This provided an opportunity for people to comment on it, and will inform the decision process.  

‘A government response to the consultation together with a summary report of responses received will be published alongside the final planning policy statement.’

Next month’s announcement by the CLG should finally provide some clarity about the future of the proposed eco-towns.

But with many of the schemes still in the very earliest of stages, and a general election approaching, there is a huge question about whether any of them will ever get off the ground.

The war of words

June 2008
‘These schemes are set to include up to 50 per cent social housing, but could become eco-slums of the future if they are built without regard to where residents can get to jobs or training.’ Sir Simon Milton, then chair, Local Government Association

July 2008
‘We don’t mind extra housing but put it in the right place and make it ecologically sound. We’re not stupid - these are just big housing estates.’ Susie Hunt, campaigner, Weston Front

December 2008
‘I do not expect all of these locations to go forward - the eco-town standards are tough and I think some of these shortlisted schemes could struggle to meet them.’ Margaret Beckett, then housing minister

April 2009
‘If we are to develop differently in ways that respect the environment more after the recession, eco-towns and eco-developments have to be part of the answer.’ Gideon Amos, chief executive, Town and Country Planning Association


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