GENERAL ELECTION 2024: REIMAGINING NEW TOWNS FOR FUTURE URBAN DEVELOPMENT

Many in the Labour party still see Clement Attlee’s reforming post-war administration as its high watermark in power. Its New Towns programme – which began in 1946 and was continued by successive governments – is often cited as one of its most enduring and successful achievements in the field of housing and planning, so it’s unsurprising that the party keeps returning to the idea. Indeed, in its recently released manifesto, it has pledged to create a “new generation of New Towns”.

The idea is not without its critics and sceptics. Firstly, it could be argued that what we really need (and probably needed in the 1940s and 1950s) are planned extensions to existing cities, although this has long been prevented by green belt policy.  England also already has a lot of medium-sized towns compared to some other countries, but jobs have increasingly concentrated in cities. Creating more of them will only lead to more commuting, congestion and pollution, unless new fast, cheap rail links are provided. (Although there are no reasons why ‘New Towns’ could not mean extensions to existing urban areas, to be fair).

Urban extensions could be accompanied by the densification of inner suburbs and existing town centres, which have low population densities on international comparisons; indeed, some think tanks, such as Centre for Cities, have suggested this as part of the cause of Britain’s productivity problems. To be fair, other Labour policies, such as the Brownfield ‘passport’, imply this is also a policy aim.

Sceptics might also point to more recent attempts in this field, including New Labour’s “Ecotowns”, and suggest that they are difficult to get off the ground. That initiative though, was not very well thought through. They were located where public land was available and this was not always the best location for new housing given where employment and infrastructure were. It could be argued that new New Towns might suffer from the same problems, with a tendency to locate them where political pressure and costs are lowest, rather than where is most economically and environmentally sustainable.

New Towns were latter-day interpretations of the Garden City ideal, designed to be self-sufficient communities for those starting a new life away from the hated Victorian cities. In fact, many new residents were ‘decanted’ there after inner city slum clearances, and the early towns were dominated by social housing. However, as the programme and the political context changed, the new communities became more mixed, with the private sector playing a bigger role, most notably in arguably the most successful one, Milton Keynes. Some have been successful (Crawley for example) with low employment and strong business bases, but others struggle with unemployment and deprivation. Most now suffer from dated town centres and a culture of car dependency.

They have always been controversial, especially with rural voters. When Stevenage, the first, was planned it was bitterly opposed by existing residents who altered the railway station name to “Silkingrad”, a play on the name of the then-Planning minister. Later New Towns were no less difficult politically (Milton Keynes was labelled ‘a little Los Angeles in North Bucks’) and as planning has become even more challenging since, policymakers increasingly must have anticipated heightened levels of local opposition if they were to attempt to repeat the process.

However, New Towns were eventually abandoned for legal and ideological reasons. Firstly, a number of legal cases which threatened and then changed the Compulsory Purchase Order (CPO) procedures that had made them possible. They had generally been built through land acquired compulsorily at roughly agricultural values, allowing affordable housing to be provided at low cost. Later Towns, such as Milton Keynes, tended to see serviced plots sold to developers (often under licence) with the difference in price used to fund infrastructure.

However, a number of controversial legal cases led to the introduction of so-called ‘hope value’ in the 1961 Land Compensation Act, which stipulated that landowners were to be reimbursed not just for the value of their land at present (EUV) but also for its potential value for a conceivable and practicable alternative use. This has enabled landowners subject to CPOs to apply for a “Certificate of Appropriate Alternative Development” indicating what alternative uses may be available, enabling this ‘hope value’ to be priced.

The owners of land due to be incorporated into New Towns had claimed that they had not been properly compensated, although towns like Milton Keynes could continue by very carefully demarcating the development scheme and closing down alternative options. Nevertheless, it did make this route to realising new settlements extremely difficult.

The Conservatives had historically been far less keen on New Towns, and with the far more laissez-faire approach of the Thatcher Government in 1979 they became completely anathema. New communities, where they were developed, were private sector-led, typified by Bradley Stoke near Bristol.

Even though later Governments became keener again on the idea of planned new settlements (such as the ecotowns), the 1961 Act and the use of ‘hope value’ meant that the CPO model used for the New Towns was generally seen as overly expensive and complicated. Some reforming policymakers have looked longingly at the way that large new developments are executed in neighbouring countries such as France, Germany and the Netherlands.

Here, local authorities generally agree and adopt infrastructure and housing plans. The land is then generally assembled through the use of Development Corporations that may include landowners, builders and contractors as well as local government. They provide the infrastructure before delivering the serviced plots to housebuilders at what are deemed to be market values. The difference in pricing between these and agricultural values are used to fund new transport links, community facilities and so on. Compulsory Purchase Powers have a central role here as, even if rarely used, landowners know they can be bought out at existing use value if they do not participate in the agreed scheme.

Looking at the wider policy package proposed by Labour – from CPO and New Towns to talk of new Development Corporations – it is clear that this is the model that policymakers would like to import (or rather restart, as it is similar to the New Towns). However, it is debatable whether this model could work in the UK. Most obviously, the planning systems are entirely different. In the countries mentioned above, once local plans, design guides and so on are agreed they are binding; there is no subsequent need for planning permission voted on by council members. This discretionary, case-by-case element of British planning, which makes the final shape of a development – or whether it occurs at all – hard to predict, makes land value a much more debatable affair. Ultimately, the main blocker on new communities is not land availability or value extraction per se, rather the lack of consented land, and local opposition to development.

The 2024 Levelling Up and Regeneration Bill, which became law in April, already made it possible for local authorities to apply to Whitehall to remove ‘hope value’ on selected sites, restricted to health, education and affordable housing uses. This has not yet been tested. However, Labour is promising more extensive reforms, potentially removing hope value altogether for all forms of development. The problem is that this may not speed up CPO processes, as there may be more appeals against value judgements through the legal system.

As mentioned above, it was those legal challenges that led to the hope value clauses being inserted in the 1961 Act. The systems that work elsewhere are dependent on different planning and legal systems and precedents, and without wider reform CPO changes may achieve little. Homes England, for example, has had the power to purchase land for urban extension but has not yet done so, presumably because of the processes involved and risk of challenge.

Simon Mole, a partner at Montagu Evans specialising in CPO and Development Advisory, explains some of the other complications: “Many obvious sites for new towns are already under option to housebuilders or land promoters and are waiting for planning consent. Unpicking such arrangements would be time-consuming and particularly likely to be legally difficult.

“There are also administrative issues; under the 1990 Town & Country Planning Act, the CPO authority must be the planning authority, meaning additional reform will be required if Development Corporations are to play that role. There is also the question of how this interacts with the (more specific) CPO powers that are held by Highways Departments, National Highways and Network Rail to develop new roads and infrastructure.”

Nevertheless, some form of Development Corporation model – which has CPO, planning and infrastructure powers – would probably form the basis of any New Town model. The legislation mostly already exists and has had some successes. It also shortcuts an increasingly gummed up planning system. What might make the whole process even more feasible would be treating large new and urban extensions as essential infrastructure. They could then be dealt with by the Nationally Significant Infrastructure regime, which also circumvents local planning procedures and is dealt with by a special department within the Planning Inspectorate. This still requires overly extensive consultation – although procedures here are currently reviewed – but would allow for the greater certainty that would help other planning-related reforms.