The planned growth of Milton Keynes

The planned growth of Milton Keynes (the story so far)

Milton Keynes is about to embark on a major programme of growth. New developments will create 28,100 new homes by 2011 and 71,000 homes by 2031 giving a projected population increase of approx 110,000. By 2031 Milton Keynes will be as big as Cardiff.

The trigger for growth in Milton Keynes is housing shortage especially in the South East of England

Milton Keynes is designated as a growth area for Housing

Who will plan the growth of Milton Keynes?

The Roof Tax

The trigger for growth in Milton Keynes is housing shortage especially in the South East of England

In 2001, around 175,000 houses were built in the UK – the lowest level since the Second World War. And over the past ten years, the number of new houses built has been 12.5% lower than in the previous decade.

Worried about the impacts of this situation on labour markets (i.e. shortages of labour caused by insufficient housing) and the rising gap between the haves and have nots in housing (in 2003 there were 93,000 households in temporary accommodation compared to 46,000 in 1995) the government commissioned the Barker Report to help understand how housing supply failure may be damaging UK competitiveness. Kate Barker, a HM Treasury economist, delivered her interim report in 2003 and her final report came in 2004.

Barker found that over the last 30 years, UK house prices went up by 2.4% a year in real terms – compared to the EU average of 1.1%. In Germany it was 0.0% and in France 0.8%. Latest evidence suggests the trend rate of house price growth has increased to 2.7% over the last 20 years.

Because of this, housing has become unaffordable for young people and lower paid workers. In 2002 only 37% of new households (i.e. all individuals who live in the same house) in England could afford to buy a house, compared to 46% in the late 1980s.

To make houses more affordable, Barker recommended that between70, 000 and 120,000 additional private sector houses were required annually plus another 23,000 social housing units. Her report also called for regional planning co-coordinators to decide where the new houses should be located.

In February 2003 the Deputy Prime Minister announced the publication of “Sustainable Communities: Building for the Future”

This document, together with the accompanying regional documents, sets out the Government’s programme for action to address the lack of affordable housing, lack of demand for housing and to make better use of previously developed land etc.

As part of the response to these problems four growth areas were identified:

• Thames Gateway

• Milton Keynes/South Midlands

• Ashford

• London – Stansted – Cambridge

Milton Keynes and South Midlands Region (MKSM) published March 2005

The final Milton Keynes and South Midlands Sub regional strategy was published in March 2005. This documents aims to provide a clear agreed sub regional strategy for the period 2001-2021

Key points for Milton Keynes arising from the strategy

Importantly, this plan was not about defining the location of the new development within Milton Keynes.

Who will plan the growth of Milton Keynes?

The role of the Milton Keynes Partnership Committee (MKPC) has been set up to set the strategic vision for Milton Keynes and take the decisions required to deliver that vision. Those familiar with urban development in England will immediately recognize the MKPC as an Urban Development Corporation. UDCs were first introduced 1981 in the London Docklands and Merseyside. Their aims were typically: (1) to improve the local environment, making it more attractive to business; (2) to give cash grants to firms setting up or expanding within the area; (3) to renovate and reuse buildings; (4) to offer advice and practical help to firms considering moving to the location.

The MKPC is a sub committee of English Partnerships comprising the following:

- two independent private sector appointments with appropriate property, infrastructure, economic and planning/design backgrounds. One of these will be the Chair of the organisation who should have a connection to the growth area;

• two English Partnerships Board members;

• three Milton Keynes Council members, including two from the majority party and one from the opposition party, or in the event of there being no overall majority, three representatives, one from each of the main parties; and

• three Local Strategic Partnership members (one each from the Chamber of Commerce, the Health and the Community Sectors).

Under the new procedures the Committee has been granted development control powers to determine major planning applications within a defined Urban Development Area (UDA)

.

Outside the UDA boundary Milton Keynes Council will continue to control development within the remaining areas of Milton Keynes and non-strategic applications in the UDA.

Within the UDA area the development control planning powers available to the MKPC will be for:

• Those involving 10 or more dwellings;

• Office, industrial and retail developments involving 1000 square metres of floor space;

• Any development involving a site area of 1 hectare or more.

The Milton Keynes Council

Milton Keynes Council will remain as the Plan making authority for the whole of Milton Keynes including the UDA areas.

A protocol will also be established over the handling of section 106 planning policy issues within the UDA.

The new “Roof Tax

Every new development imposes a cost on the existing settlement in terms of road improvements, the need to provide new utility capacities, the impacts of additional pupils on schools and a long list of other costs. A constant debate amongst planner s and policy makers is how best to recover these costs.

The usual mechanism is a legally binding obligation made under Section 106 of the Town and Country Planning Act 1990 in which the developer agrees to make payments or provide facilities to mitigate the third party costs on the host community. However, for a major strategic development such as that planned for Milton Keynes it is very complicated to attribute precise impacts to each new construction.

For this reason a pilot tariff scheme in Milton Keynes was introduced last year. The tariff requires a contribution of £18,500 per dwelling on 15,000 homes to be built by 2016 and a further £33.46m contribution from employment developments to support the requisite infrastructure. The total contribution from the private sector will amount to £300m. The tariff is applied without reduction, no matter what the size or value of the development.

The levy will be spent on infrastructure such as: road improvements, public transport improvements and subsidy and patronage schemes, hospital infrastructure, universities, voluntary sector capacity building and voluntary sector small grants funding.

A moments thought reveals a potential flaw in the scheme – there is an inevitable time lag between expenditure on new infrastructure to enable new development to take place and actual payment of the roof tax. To address this, English Partnerships forward funds some of the infrastructure and later recovers those costs from the subsequent tariff payments.

The tariff must be paid by a specified date - whether or not development has commenced. This means that new infrastructure can be delivered ahead of development in the knowledge that payment to meet the costs incurred will be received. In addition, this guaranteed payment mechanism also tackles the perceived problem of “land-banking” - the practice of purchasing land for the future use by a private or public entity.

The levy, between 5% and 10% on the cost of an average house, which could bring Milton Keynes more than £60m a year, will be used to build schools, health centres, roads and other community facilities.