(Bloomberg) -- The ruling Conservative Party let local anti-development skeptics to grow in influence over the past 14 years by choosing not to intervene in the vast majority of UK homebuilding applications.

That’s based on calculations by Bloomberg News using data from the Planning Inspectorate and National Archives, which shows the number of planning applications reviewed by the secretary of state — known as a “call-in” — dropped to five in the previous financial year from an average of more than 50 per year during the 2000s. The government has the right to take over the determination of a planning application rather than letting the local authority decide, a tool often used to push development through in areas where local protectionism is rife.

The number of annual recovered decisions — which give ministers the power to determine appeals instead of allowing a planning inspector to make the call — also dropped to 19 from an average of more than 100 in the same period.

It suggests a hands-off approach to planning from the Tories, who came to power in 2010 with a promise of giving local authorities more control over development in their communities. The result has been a transfer of power to the not-in-my-backyard, or NIMBY, lobby that’s contributed to the country’s acute housing shortage.

“Call-ins are an easy lever to pull,” said James Fennell, chief executive at planning consultancy Lichfields. “They would certainly give an idea of the next government’s stance on housebuilding.”

The Conservative Party did not respond to a request for comment.

In contrast to 2010, when the Tories were penning legislation to localise development decisions, the election-favorites Labour are plotting a “blitz of planning reform delivered in their first days and weeks in office”. That will see them intervene to approve new homes in poorly performing areas, using call-in powers in the most extreme cases, the party has said.

Whoever replaces Levelling Up Secretary Michael Gove when he stands down as a member of Parliament at the July 4 general election will need to decide how aggressive they want to be to boost housebuilding. The share of rejected planning applications ultimately overturned on appeal rose to more than 30% last year, according to a Bloomberg investigation, suggesting projects that abide by development rules are often refused based on NIMBYism alone.

The data indicates that the Labour Party, which is far ahead in the polls, would be more likely to actively intervene in development rulings. Prior to the Conservatives taking power in 2010, the number of annual call-ins in England exceeded 22 in every year where the data was available from the start of the century — a threshold not reached once since 2010.

Deputy leader Angela Rayner, the shadow levelling up secretary, was a star guest at the UK’s biggest real estate conference last month, where she shared bullish plans to build a new generation of towns to tackle the housing crisis. 

“Getting applications over the line can be like swimming through treacle,” Rayner told a packed room of delegates at the conference. “It’s absolutely right that local people get a say, but a failing system is not in the local or national interest.”

Planning and housebuilding has long been a point of friction within the Conservative Party, whose voters typically dominate in leafy, rural areas where many are against more development. Since the 2010-11 financial year when the Conservatives took power, the number of applications called in annually by the secretary of state has plunged 69%, while recovered decisions have more than halved.

Britons view housing as one of the four most important issues facing the country ahead of the election, according to a YouGov poll, prompting it to be a discussion point for Prime Minister Rishi Sunak and Labour leader Keir Starmer in their first live television debate before the snap vote. 

“It is a question of how brave the government is prepared to be to force planning decisions to be made in accordance with the rules of the game,” said Melanie Leech, chief executive officer of the British Property Federation. “We need to put more resources in the planning system to achieve that.”

Pledges to fix the system by Labour and the Conservatives — both of whom promised a more heavy-handed approach on the local authorities that aren’t allowing construction — have been met with scepticism by some industry experts, who argue that a lack of resources is the main issue holding back effective planning. 

Read more:

  • UK’s Broken Planning System Costing Taxpayers More Than Ever
  • Britain’s Chronic Housing Shortage Is About to Get Even Worse
  • UK Home Buyers Thwarted by System That Can’t Build Enough Houses
  • We Can’t Be Prisoners of the NIMBYs Forever: Matthew Brooker

A Bloomberg investigation last year found that the average annual funding in local government planning departments has tumbled 44% since 2010, while the average number of employees in those teams has more than halved over the same period. 

Labour’s manifesto promise to hire 300 planning officers would replace fewer than 10% of the planners that left public service during the first decade of the current Conservative government, according to analysis from the Royal Town Planning Institute cited in the Financial Times. 

“I’ve got some of the resources and the powers that I need, but if I was given more I could absolutely make sure that those homes were delivered within a parliament,” Labour’s Greater Manchester Mayor Andy Burnham said in an interview, referring to the 10,000 council homes he plans to build in the county by 2028. “If you replicate that across the country, then in one parliament Labour could build a significant number of the new homes that the country needs.”

Labour has pledged to build 1.5 million homes over five years if it wins the election, which is essentially in line with a 2019 Conservative pledge to build 300,000 new homes annually — a target they missed in every subsequent year. Some housing experts, including former Bank of England rate-setter Kate Barker, have called Labour’s pledge a “Herculean task” that would be “very difficult” to pull off.

The UK’s housing shortage would be solved if the government replaced the current discretionary planning system — where decisions are made on a case-by-case basis — with a flexible zonal system, according to Centre for Cities. In a 2023 report, the think tank cited planning systems in Finland, Japan, and Houston in Texas, as potential inspiration.

“While there’s much to like in Labour’s manifesto, it stops short of the total overhaul that’s needed,” said Mark Booth, co-founder of developer Hayfield Homes. “Planning professionals are restricted by politicians whose drive is to prevaricate, prevent or posture while our housing stock reduces.”

Former Prime Minister Boris Johnson attempted to bring in a more rules-based system in 2020, but his effort floundered the following year when his ruling Conservative Party suffered a heavy by-election defeat that was widely seen as a NIMBY backlash to its planning proposals. 

At the UKREiiF conference last month where Rayner was a guest speaker, talk of planning reform dominated conversations among delegates.

“You don’t have the same planning issues in swathes of the US where zoning is the main form of regulation,” Rob Mills, a partner at fund manager Clearbell Capital, said on the sidelines of the conference. “We need to make planning easier in the UK.”

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