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Budget 2017: Reaction to devolution plans

Words: Laura Edgar

Announcements in the Budget 2017 to devolve more powers to London have been welcomed by interested parties.

In the Budget, delivered yesterday (8 March), chancellor Philip Hammond said a Memorandum of Understanding would see the government, the Greater London Authority (GLA) and London Councils – a think tank representing the capital’s boroughs – working together to explore the benefits of, as well as scope for, locally delivered criminal justice services and action to tackle congestion.

There will also be discussions about a task force to explore piloting a new approach to funding infrastructure.

Deal will help increase productivity


In a statement the Mayor of London, Sadiq Khan, says the pilot, Development Rights Auction Model, would provide funding for future projects, “allowing them to be built quicker and with less reliance on government funding”.

“Giving London the ability to invest more in building crucial new infrastructure and devolving control of business rates will help increase economic growth and improve productivity.

“And granting London greater control over health, criminal justice, skills and back-to-work programmes will allow us to better improve the life chances of thousands of Londoners,” he adds.

But Khan expresses disappointment that the government did not use the Budget as an opportunity to support Crossrail 2.

More room for devolving powers


The mayor and the boroughs have a “track record” of working together to deliver for the city, said Claire Kober, chair of London Councils.

“We are delighted that we will now be able to use the London Devolution Agreement as a springboard to enhance our plans to improve the lives of Londoners.

“As we’ve long argued, this promises local people the power to set out a new path for delivering both economic growth and excellent public services in the context of a continued squeeze on public finances.”

But Kober added that there is more room for further transfers of power to London and cities across the UK and “we will continue to argue the need for government to properly fund public services”.

Infrastructure funding must be part of CIL review


Although she said it is “hugely positive” to see the proposal for a joint task force to look at piloting a Development Rights Auction Model for infrastructure in the capital, Melanie Leech, chief executive at the British Property Federation (BPF), said the creation of new infrastructure funding models must be done as part of a review of the Community Infrastructure Levy (CIL).

It “should be tested with the wider developer community to ensure that efforts to bring about more infrastructure do not become barriers to the very development they are seeking to underpin”.

Infrastructure progress in LA hands


“In an age of giga-projects delivered by the government, this Budget reminds local authorities, city regions and developers that progress on infrastructure is in their hands, and puts tools in place for delivery,” said Howard Bassford, partner at DLA Piper.

On the auction model, he said it would be used where high-density development is possible.

“Landowners and the public sector would pool land for development, which would be auctioned to developers with the increase in value being split between participants – holdout landowners would suffer compulsory acquisition or increased planning obligation contributions.”

Bassford said the model should not be subject to s.106 contributions or CIL charges. Underpinning this would “doubtless” require a statutory mayoral transport strategy.

Wider thinking reflected


Roy Pinnock, planning partner at law firm Dentons, said: “The announcement of land auction trials through the Development Rights Auction Model reflects the wider thinking in government about ‘right pricing’ land.

“It will be interesting to see whether any auctions that do take place produce policy-compliant schemes, with incentives to deliver them early. Where they do, there will be real interest in pursuing a similar approach through neighbourhood and local plans.”

Read more:

Budget 2017: Further devolution for London

Budget 2017: Transport funding announced for the Midlands and The North

Budget 2017: Reaction to infrastructure announcements

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