6 things we learned from the New Towns Taskforce report

Development corporations are the most appropriate delivery vehicle

The report finds that development corporations have significant powers to co-ordinate investment, develop expertise, assemble land and facilitate faster delivery. The taskforce believes this approach will ensure that joined-up infrastructure and amenities are in place from the outset, as well as provide more certainty about the future path of delivery.

A range of delivery models may be appropriate depending on the circumstances in each location, including the potential for central government-led and mayor-led development corporations.

The extent of the powers needed may differ depending on sites, particularly where there are single dominant landowners or some existing planning permissions.

Development corporations also benefit from clear ‘no-scheme valuation’ rules when compulsorily purchasing land, meaning the uplift in land value which might result from a new town scheme (including any planning framework) can be ignored in the price paid to landowners.

The taskforce also notes that the government is legislating through the Planning and Infrastructure Bill to ensure that compensation paid to landowners through the compulsory purchase order (CPO) process is fair but not excessive. Inside Housing’s analysis of these reforms is here.

Target of 40% affordable homes, with 20% for social rent

The taskforce has endorsed the government’s commitment for a minimum of 40% affordable housing in each new town, with 20% for social rent.

Where viability testing shows 40% is not achievable through land value capture alone, the government should provide grant funding to meet the requirement.

In some cases where development values are particularly high, this will be viable without additional government intervention. However, in most instances, doing so will require access to government grants. 

With this in mind, the taskforce welcomes the government’s £39bn commitment to social housing investment, which will be important to underpin the delivery of new towns.

The report states: “A flexible but strong statutory tool is required for a development corporation to set out its masterplan, one which can create binding requirements for infrastructure and affordable housing.”

Certainty for landowners 

New town delivery bodies will need to ensure certainty early on for landowners by setting out what value they can expect for their land.

To prevent inflated expectations among landowners that cause prices to rise, delivery bodies should communicate early in the process to landowners how they intend to set the acceptable costs allowed for land when the planning system calculates what contributions a developer should pay towards the development.

Many of the new town sites shortlisted by the taskforce already have active developers which have undertaken work to assemble land, finance a scheme and, in some cases, gained planning permission. 

For these sites, patterns of existing landownership may mean it would be more beneficial to enter into a land partnership with existing landowners and developers so that the right contractual agreements are in place to deliver quality developments and build-out.

This may include consideration of land partnerships or joint ventures to share risk. The use of CPOs needs to be preceded by genuine attempts to deliver public outcomes through negotiated agreements with landowners.

New towns will need significant government funding

The report sets out why the plans will need significant government funding to help capture the increase in land value by buying land, before granting planning permission and building infrastructure, and selling “serviced parcels” to residential and commercial developers.

Given the likely breadth of infrastructure new towns will need over their lifetime – including social, transport and utilities – departments across the government, as well as local partners, must prioritise funding the infrastructure needs of new towns within their budgets, both now and over the longer term.

In the short term, new towns will require significant upfront cash to establish the necessary delivery vehicles for sites and overcome major constraints to delivery.

The taskforce believes the new £16bn announced for the National Housing Bank to help unlock large sites and the private investment needed.

The report states: “The examples of previous waves of new towns show that long-term loans to delivery bodies can be paid back, but that places will require flexibility in their funding packages to realise returns over the right timeframe and to adjust to the changing commercial and delivery environment.”

At the same time, publicly issued long-term loans should empower development corporations to manage their budgets outside of the government’s annual budgeting frameworks and the cycle of spending reviews, giving them certainty to invest and enter partnerships with the private sector.

Plus, lending at gilt rates should allow development corporations to manage budgets effectively.

Private sector partners

Investors and private sector partners could play an important role in the delivery of new towns, but only “where they can demonstrate alignment with the new town principles”.

For those that do, the taskforce has called on the government to foster confidence among investors and other key delivery partners across both the public and the private sector.

This will be particularly important with private sector providers of social infrastructure to ensure facilities are delivered promptly and in line with community needs.

Partners should proactively identify social infrastructure gaps, both within and beyond the town’s boundaries, and consider opportunities to attract major cultural and educational institutions.
Opportunities for partnerships with the private sector will be place-dependent and vary on length and type of financing, and investor demand will be influenced by the specificity and clarity of the proposition.

In return for meeting the new town principles, the private sector would benefit from the certainty provided by development corporations and their access to powerful planning and investment tools, which in turn allows for faster return of capital employed.

Placemaking principles

The taskforce has developed 10 placemaking principles that it recommends each new town should be built on.

Each new town should have a clear long-term vision for creating a well-designed and distinctive place, supported by a town-wide strategic masterplan and design code to ensure placemaking quality.

The towns should be built at a density sufficient to enable residents to walk to local amenities, support public transport, unlock better social infrastructure and create active, liveable neighbourhoods. The government should establish clear minimum density thresholds.

Plus, the developments should support thriving communities by ensuring access to schools, cultural, sporting and healthcare facilities, and other social infrastructure that meets residents’ needs from the outset.

New towns should be healthy, safe places that promote active lives for residents, with easily accessible green spaces and recreational facilities provided.

Other principles include standards for environmental sustainability; affordable housing and balanced communities; transport connectivity; business creation and employment opportunities; stewardship; and community engagement.