Opinion

Housing land is a core priority

Matthew Farrow, EIC

The next Government should extend Land Remediation Tax Relief to get more brownfield sites into use for new homes, says Matthew Farrow.

After several barren years since the coalition government axed targets for the proportion of homes to be built on previously developed land, ‘brownfield first’ is back in vogue.

A combination of a cross-party acceptance that more homes must be built (the Association for Consultancy and Engineering reckons 880,000 new homes will be needed over the next few years) and the strength of lobby groups such as the CPRE has meant that George Osborne and Boris Johnson to name but two political heavyweights have been arguing for a push to build homes on brownfield sites.

"A Cambridge University study has estimated that the UK needs to find an additional seven million hectares of useable land to ensure the housing and food needs of our rising population are met by 2030."

The 2015 Budget included new brownfield initiatives in the South West and in London while Labour has also announced it will pursue a pro- brownfield policy if elected.

The UK should be well-placed to step up a gear in its efforts to get more previously developed land reused for homes. While the land remediation industry was hit very hard by the 2008 economic crash with many firms downsizing, the sector has been slowly recovering, and my experience is that countries such as China look to the UK as a centre of expertise in contaminated land remediation (across consultancy, onsite treatment and laboratory soil analysis) – a consequence of the scale of our historical industrial base and our retrenchment from it.

Change needed

But getting brownfield developments up and running takes more than some welcome speeches from political heavy hitters. Developers usually prefer greenfield sites for the simple reasons that they are cheaper, less complex and quicker to build on, so we need to address this differential if we are going to reverse the greenfield trend of recent years.

So while the budget announcements were welcome as far as they go, I think a more fundamental change to the tax treatment of brownfield development is also needed. A new government looking to improve the economics of brownfield development could do worse than look at extending Land Remediation Tax Relief.

"Attempts by Defra to develop more consistent definitions of contamination levels have not found universal favour"

This relief was earmarked for abolition by HM Treasury a few years ago, and abolition was only averted by an award-winning lobbying campaign carried out by the Environmental Industries Commission in close conjunction with our member for AECOM.

Prioritise brownfield

But LRTR is not as widely use as it could be on brownfield sites, in part because its eligibility is quite restrictive and was made more so through changes made in 2009. In addition, the steady lowering of corporation tax in recent years has also reduced its incentive value. Increasing the rate of the relief, or extending its coverage to demolition or soil stabilisation costs incurred on a brownfield site, could make a real difference.

There is also more to be done to reduce the complexity of brownfield regulations. Like all areas, brownfield has its own jargon: ‘Part 2A’, ‘Category 4 Screening Levels’ and so on. As development control and land use are local authority matters, regulatory approaches can vary across the country. Attempts by Defra to develop more consistent definitions of contamination levels have not found universal favour and the split in government responsibilities for brownfield policy between Defra and DCLG does not help either.

The old adage is that ‘land is the one thing they’re not making any more of’. A Cambridge University study has estimated that the UK needs to find an additional seven million hectares of useable land to ensure the housing and food needs of our rising population are met by 2030. The next Government will need to make facilitating brownfield development a core priority.

Matthew Farrow is director general of the Environmental Industries Commission, the leading trade body for environmental firms.

www.eic-uk.co.uk 

Comments

Our food security is rarely mentioned when housebuilding is discussed. Yet we have to import half the food we need from a world growing short of it. So, a presumption in favour of 'brownfield' sites for housebuilding makes more sense than 'food-field' sites. If so, the definition of brownfield might need to be widened to protect our food-fields. For instance, should the Secretary of State intervene with compulsory powers to complete developers' housing sites in town-centre margins? Or, in more remote parishes, so family houses could be built around a half empty village school? Or, new towns built beyond the North South Divide?