China Banking Advisor – Financial system ungovernable, world economy ‘could see mother of all crashes’

Andrew Sheng interviewed at INET Bretton Woods

Financial business is creating credit without limit until a crisis occurs. That’s the fundamental flaw which caused the current crisis, says Andrew Sheng in this INET interview. He also worries that the destruction of the tropical forest and other threats to the biosphere have the same character of ungovernable excesses until a crisis occurs.

Sheng says that what he learned about free markets at university – and what he practiced until 2008 – he now views as an intellectual dead-end. He believes that the takeover of private debts and zero-interest rate policies by governments around the world are both attempts to postpone the business cycle. He calls large complex financial institutions that move financial capital around the globe ungovernable Godzillas. These are a few of the many firm judgements coming from the Chief Adviser to the China Banking Regulatory Commission.

The world economy would see the mother of all crises, Sheng warns, if governments fail at managing the leveraged capital that is flowing into emerging markets these days. He also talks about the Chinese-American policy dialogue, that China needs to accept that with greater economic strength comes greater responsibility; and the world needs to respect that China, because of its size, is sailing into unknown territory.

House Price Recovery Ends

Fell 0.4% in may, down from a 0.8% increase in April, only London is on the up.

May Land Registry Report  (Note unlike the Halifax and Nationwide indices this is not seasonally adjusted).

National Planning Policy Framework Forensics#37 Isolated Dwellings in the Countryside

This compares the NPPF practitioners draft to policy on this topic in PPS7 (paras 10. and 11. and annex A)

The draft does not define or set tests for ‘essential need for a worker to live permanently at or near their place of work in the countryside.’ So LPAs would need to incorporate annex a as policy, or more likley SPD, if they wished to continue with its rigorous tests. All that is needed though is a footnote saying:

Essential need means a need for a full time worker with a functional requirement to live on site, which cannot be satisfied on site or close by. To prevent abuse the agricultural unit must be proven viable over a number of years; which can be tested through consent for on-site temporary accommodation’.

The securing the future of listed buildings exception is well established,

The re-use of redundant buildings exemption is new and would undercut precedent in this area. It is commonly and incorrectly assumed that if there is something of an old house or building left then there is a right to restore or redevelop it, even it is only foundations. This is incorrect there is no such right, there never has been under English Planning and there are very good reasons for this.

The uk case law is based on the principle of abandonment of a dwelling house. There is a useful summary of the law on this issue here from Saira Kabir Sheikh. The key issues are the physical condition and the length of time a building has been abandoned, the intentions of the owner has been found to be a much less important issue over the years.

These principle is set down in PPS21 in Northern Ireland which states:

[rebuilding is permitted where] where the dwelling to be replaced exhibits the essential characteristics of a dwelling and as a minimum all external structural walls are substantially intact. In cases where a dwelling has recently been destroyed, for example, through an accident or a fire, planning permission may be granted for a replacement dwelling. Evidence about the status and previous condition of the building and the cause and extent of the damage must be provided.

This seems to me a sensible test. There are 1000’s of abandoned rural dwellings with only the foundation, now only of archaeological interest. This policy shift seems to cut across these well established principles of English common law, including those set by the House of Lords.

PPS7 now allows buildings to be replaced if they are of ‘permanent design and construction’ (para 19) and lets LPAs set out criteria. Now with a distaste for localism the only test is ‘would lead to an enhancement of the immediate setting’.

The ‘country house’ (Gummer) exemption is similar but not identical to that in PPS7.  Only a tiny number of houses have passed the test (around 20-25) and few have found the money to get built.  So the main lobby to keep, sad to say, it are architects seeking expensive commissions, especially Robert Adam architects who seem to have got over half of the commisions – leading to accusaations that the rich could buy themseleves permission to live in the countryside (but havn’t they always)

Instead of ‘Exceptional quality and innovative nature of the design’ become or

It loses the following words after ‘ truly outstanding’ ‘and ground-breaking, for example in its use of materials, methods of construction or its contribution to protecting and enhancing the environment’

Also ‘contemporary architecture’ becomes architecture.

The concern of the originally drafted Gummer exemption was that we were getting too many mock Georgian and mock Tudor mansions, rather than applications which truly pushed the boat out.  After a proposal to delete the exemption the AJ ran a campaign and it was saved, but not before annoying the classical architects who said it was no purpose of government policy to determine style.  So there was a clarification from the labour government of the day about the meaning of ‘contemporary’.

As Keith Hill said in 2004 “The emphasis is on looking to the future — on innovation in design, construction methods and materials,”… “We are against the replication of designs from the past.”

Robert Adam replied he was “absolutely gobsmacked” by the wording.

“Be absolutely clear, There is no doubt whatsoever that the government is declaring modernism to be its chosen style. There’s no other way of interpreting it. This is a stylistic statement. It departs from the position of every government from time immemorial not to be in involved with style.”

Adam said that Hill had ignored entreaties from TAG — the Traditional Architects Group — to steer clear of stylistic references in the new PPS7.  Hill was accused no ‘Stylistic Stalinism’.

Hill in turn denied the government was imposing a “taste standard”.

“We are certainly looking for the best in contemporary design, but that doesn’t have to be steel and glass. It could be contemporary design with traditional materials, like the work of David Chipperfield. Or a traditional design which is highly innovative in materials or ecologically, such as Robert Adam’s Solar House.”

So you could build a traditional house, or a modern house even, but it had to be innovative as well.

The proposed wording means that if someone proposed a carbon copy of Chatsworth with no innovation whatsoever this would be acceptable.  This cant be the intention, and should stay.  ‘Contemporary’ is right to go – otherwise we would never have had any Palladian villas.

National Planning Policy Framework Forensics #36 The Countryside and Rural Development

This section compares the NPPS draft with PPS7 Sustainable Development in Rural Areas 2006, and rural specific sections of other PPSs especially PPS3.

The NPPF practitioners draft completely lacks a section on the countryside. The only mention of ‘agriculture’ are in relations to being an appropriate use in green belt band minerals aftercare. Other than green belts there is only one mention of villages, and that is in relation to housing. There is no mention of rural services.

Current policy, relating to the principle of development in the countryside, is as follows:

the creation and maintenance of sustainable rural communities in market towns and villages (mentioned several times in PPS3)

The need to provide housing in rural areas, not only in market towns and local service centres but also in villages in order to enhance or maintain their sustainability. (PPS3 para 39)

PPS3 Affordable Housing Rural Exceptions Policy – wont attempt to summarise.

Away from larger urban areas, planning authorities should focus most new development in or near to local service centres where employment, housing (including affordable housing), services and other facilities can be provided close together. This should help to ensure these facilities are served by public transport and provide improved opportunities for access by walking and cycling. These centres (which might be a country town, a single large village or a group of villages) should be identified in the development plan as the preferred location for such development.

Planning authorities should set out in LDDs their policies for allowing some limited development in, or next to, rural settlements that are not designated as local service centres, in order to meet local business and community needs and to maintain the vitality of these communities. In particular, authorities should be supportive of small-scale development of this nature where it provides the most sustainable option in villages that are remote from, and have poor public transport links with, service centres. (PPS7 paras 3 & 4)

To promote more sustainable patterns of development and make better use of previously developed land, the focus for most additional housing in rural areas should be on existing towns and identified service centres. But it will also be necessary to provide for some new housing to meet identified local need in other villages.(PPS7 para 8 )

local planning authorities should apply the policies in PPG3. They should: (PPS7 para. 9 )

(i) have particular regard to PPG3 guidance on the provision of housing in villages and should make sufficient land available, either within or adjoining existing villages, to meet the needs of local people; and

(ii) strictly control new house building (including single dwellings) in the countryside, away from established settlements or from areas allocated for housing in development plans.

New building development in the open countryside away from existing settlements, or outside areas allocated for development in development plans, should be strictly
controlled; the Government’s overall aim is to protect the countryside for the sake of its intrinsic character and beauty, the diversity of its landscapes, heritage and wildlife, the wealth of its natural resources and so it may be enjoyed by all (PPS7 para 1(iv))

Isolated new houses in the countryside will require special justification for planning permission to be granted. Where the special justification for an isolated new house relates to the essential need for a worker to live permanently at or near their place of work in the countryside, planning authorities should follow the advice in Annex A to PPS7. (PPS7 para 9.)

Special policy on new country houses (PPS7 para 11)

Planning policies should provide a positive framework for facilitating sustainable development that supports traditional land-based activities and makes the most of new leisure and recreational opportunities that require a countryside location. Planning authorities should continue to ensure that the quality and character of the wider countryside is protected and, where possible, enhanced. They should have particular regard to any areas that have been statutorily designated for their landscape, wildlife or historic qualities where greater priority should be given to restraint of potentially damaging development. (PPS7 para 15)

When preparing policies for LDDs and determining planning applications for development in the countryside, local planning authorities should: (PPS7 para 16)

(i) support development that delivers diverse and sustainable farming enterprises;

(ii) support other countryside-based enterprises and activities which contribute to rural economies, and/or promote recreation in and the enjoyment of the countryside;

(iii) take account of the need to protect natural resources;

(iv) provide for the sensitive exploitation of renewable energy sources in accordance with the policies set out in PPS22; and

(v) conserve specific features and sites of landscape, wildlife and historic or architectural value, in accordance with statutory designations.

The Government’s policy is to support the re-use of appropriately located and suitably constructed existing buildings in the countryside where this would meet sustainable development objectives.

The Government is also supportive of the replacement of suitably located, existing buildings of permanent design and construction in the countryside for economic
development purposes.

Wheras all the NPPF draft says about the general principle of development in the countryside is:

In rural areas, local planning authorities should be responsive to local circumstances and allow housing development and the growth of villages to reflect local requirements for market and affordable housing.

Ill deal with the specific issue of isolated rural housing in a moment.

In no other area of the draft NPPF is there such a fundamental shift in policy, much more so even than the presumption in favour of sustainable development.

• No longer the overall policy objective, which has stood for over 60 years, of protecting the countryside per-se, now the shift is to ‘allow housing development…to reflect local requirements for market and affordable housing‘  – as price signals are considered an indicator of market housing in the NPPF in attractive rural areas where house prices are high the implication is to permit more housing.  The only general protective power is against ‘isolated’ housing, so significant estates next to villages in rural areas would need to be permitted, and, as drafted, whether or not this a site in a development plan.  The only fall back to LPAs would be having a 5 year housing supply, however where this has been rolled forward from pre-RSS days developers will be claim the plan is out of date.  We should expect a rash of appeals.  We should also expect an outcry from the CPRE and the shires.
• The lack of recognition of the importance of land based activities.  Many rural Tories will consider this curious, a metropolitan liberal elite bias?
• No mention of local service centres, until now this has supressed appeals for new housing in other locations
• No mention of villages as anything other as a place for new housing, their local services or character.
• No mention of access to the countryside for recreation.
• No indication of how to mediate local strategy with localism at the neighbourhood scale.  Cleanly and rightly there wont be a ‘parish veto’ but it needs to set out how this issue will be resolved.

The likes of Thomas Adam or Patrick Abercrombie would be spinning in their graves at this.  Indeed were they alive today we would expect them to immediately start campaigns to change the governments minds.

Part of the problem has been that planning has been so biased against development in the countryside, with those with high property values sitting on planning committees seeking to defend those values by excluding development and trying to reduce the targets for new housing, the purpose of which are to drive house prices down.  This risk has always been that the pressures would mount so much some government would open the floodgates.  Tony Blair was tempted to do it in the manifesto for his second term, and now the coalition plans to.

It is possible to signal a more proactive approach without opening the floodgates to an appeal-led disaster.  It just requires the right balance to be struck in policy.  I would suggest the following wording.

The Government’s overall aim is to protect the countryside for the sake of its intrinsic character, beauty, landscape, biodiversity and land based resources, as well as to secure sustainable rural communities in market towns and villages

The focus for most additional housing outside larger towns will be in or adjoining smaller/market towns and the villages with the best services (local service centres)– as identified in development plans. It will also be necessary to provide for some new housing to meet identified local need in other villages (see also para X on housing meeting local rural needs).

Finding the right distribution between urban and rural areas, and between rural settlements is matter for local choice given testing for sustainability  Each rural settlement will need to meet its share of development within the locally chosen strategy.  How and where this is delivered will increasingly be through neighbourhood plans driven by local people themselves.

New building development in the open countryside away from existing settlements, or outside areas allocated for development in development plans, should be strictly controlled, and restricted to development requiring a countryside location.

Planning policies, and planning decisions, should facilitate sustainable development that requires a countryside location.  This includes:

1. Diverse and sustainable land-based enterprises including farming, horticulture and farm based tourism and enterprise, as well as farm shops & horticulture sales;
2. Equine-related  activities (subject to local policies)
3. Development facilitating open air recreation and access to the countryside;
4. Sensitively designed and located transport and energy networks and water infrastructure;
5. Sensitive exploitation of renewable energy (see section x);
6. Development facilitating the enhancement and protection of the natural environment;
7.  The re-use or redevelopment  of existing permanent buildings (in line with criteria set in local plan policy);
8. Minerals extraction and waste disposal/recycling (where in line with policy on these matters);
9. Housing for agricultural, forestry and other essential rural workers (see below);
10. The extension of existing dwellings to provide self contained accommodation for elderly or disabled members of the same family;
11. Other countryside-based enterprises genuinely requiring a rural location (& if justified in local policies – ancillary associated and small scale low impact housing).

All rural development is subject to appropriate statutory undertakings being in place or capable of being provided (conditions for off network development should be set in local policies), and meeting other polices, including on nature conservation and landscape protection.  The expectation is that all development should bring a net benefit to the countryside.

Planning authorities should adopt a positive approach to planning proposals designed to improve the viability, accessibility or community value of existing services and facilities, e.g. village shops and post offices, rural petrol stations, village and church halls and rural public houses, that play an important role in sustaining village communities. Local planning authorities may set out policies to retain these services and encourage their local provision.

The wording here is quite careful and has tried to keep up with the caselaw (for example on the difference between agriculture and horticulture, how horse based activities are not agriculture etc.)

A constant issue in rural areas is the desirability of providing granny annexes (the recent Wealden disabled solider issue was another example of why policy should be changed) and some housing and work spaces and homes for rural based employment.  Some other jurisdictions are slightly more relaxed about this – such as the Welsh rules on low impact dwellings.  I have tried to keep a balance between  having a general national protection policy, to avoid another concrete and cream teas incident, and  allowing refinement to local circumstances.

I deal with rural workers dwellings and new country houses in the next section.

National Planning Policy Framework Forensics #35 Creating Sustainable Communities

We covered most housing topics earlier in the series but there are a couple of outstanding areas.

The draft contains a section on creating sustainable communities, it would replace several sections of PPS3 as well as the supplement to PPS on Ecotowns.

To create sustainable and inclusive communities, local planning authorities should:
• create a shared vision with local communities of the types of residential environment they wish to see;
• plan positively for the integration of community infrastructure and other services to enhance the sustainability of residential environments;
• ensure that housing is developed in suitable locations which offer a range of community facilities and good access to key services and infrastructure; and
• where large scale development is proposed in less sustainable locations, planning authorities should require investment to improve the sustainability of the site.

The section concerns soley the actions of the LPA. It is unlear if they are intended as general tests for assessment of new residential communities.

The bullet on shared vision is taken from PPS3 para. 14 but is much shorter:

Local Planning Authorities should develop a shared vision with their local communities of the type(s) of residential environments they wish to see and develop design policies that set out the quality of development that will be expected for the local area, aimed at:
– Creating places, streets and spaces which meet the needs of people, are visually attractive, safe, accessible, functional, inclusive, have their own distinctive identity and maintain and improve local character.
– Promoting designs and layouts which make efficient and effective use of land, including encouraging innovative approaches to help deliver high quality outcomes.

Although there is a need to avoid duplication with the design section one of the key concerns of communities which oppose housing is that the housing proposed will be of poor quality – the NPPF needs to more clearly signal that an expansion in housing will require a step change in design.

The last bullet does not set a bottom line, how accessible does a site have to become? Does this now open the gates to large inaccessible airbases, such as Upper Hayford, becoming whole towns? We raised concerns in the transport section about the changes to policy on remoter sites, there is a risk of duplication with the transport section and it is better if this was a rare but necessary case of the need for a simple cross-reference.

The issues here break down into two categories, firstly the key public concerns over the form (rather than the principal of location) of development, uncertainties over which can lead local communities to oppose the location of development.Communities will typically ask:

• There isn’t enough infrastructure
• It will be dominated by car use (especially for the peripheral locations of urban extensions and new settlements)
• The houses will eat up energy and water resources and this wont be sustainable
• The houses will be poor quality ‘little boxes’
• The houses wont meet local need
• The houses wont form a real community with the facilities and long term management that needs

The NPPF needs to tackle these issues head on.  The failure to tackle these will fail to acheive the step change we need, whether locally determined or not.

The second issue is that large scale developments, whether inner urban, urban extensions, or eco-towns/new country towns (however ministers want to describe them) present real opportunities for joined up planning to create sustainable communities, as the recent JRF report recognises.

I would therefore suggest the following wording, which attempts to distill this, and extract from the Ecotowns supplement the essential features of large scale sustinable developments (whether new settlements or not):

The Government’s aim is not just to raise housebuilding but to enable local planning authorities, developers and neighbourhoods to work together to create sustainable and inclusive communities.  To plan for neighbourhoods both old and enhanced, and new and exemplar, which are a proud legacy for future generations. To this end:
Local Planning Authorities should:

• develop a shared vision with their local communities of the type(s) of residential environments, and those valued features of local character’ they wish to see  and develop simple design policies (which can be enhanced in design guides and neighbourhood plans) to deliver this;
• plan positively for the integration of community infrastructure and other services to enhance the sustainability of residential environments;

The Decision Maker should:

• ensure that housing is developed in suitable locations which offer a range of community facilities and has good access to key services, sustainable transport and infrastructure.  In rural areas this will mean focussing development on local service centres unless small scale development is necessary to meet an identified local need.

The government’s other key policy tests for new housing, which the decision maker should follow, are:

• It is supported by adequate infrastructure (up to date development plans will secure this, the decision maker should ensure that the development is linked and phased to infrastructure where appropriate)
• The housing is sustainable, making prudent use of resources to meet the new national standard for sustainable buildings.  As well as buildings schemes should be designed as a whole enhance sustainability;
• The scheme takes opportunities to enhance the area in line with national policy on design (see…)
• The scheme meets the national standard on room sizes and inclusive design [based on the London standard which works very well, developers don’t want a confusing mix of local standards, they want to design internal layouts they can use everywhere]
• It meets national policy and local development plan policy on affordable housing, where this applies.

Larger scale developments offer real potential for securing sustainable and inclusive communities.  Whether urban villages, sustainable urban extensions, or new country towns (whichever is chosen as the best local & strategic option) they should:

•  Have a clear master-plan and strategy for delivery and maintenance & governance over the long term;
• Include mechanisms to ensure that the phases of the masterplan can be delivered quickly with minimum planning delay (this can include a design code backed by a local development order);
• Are expemplars for sustainability, including energy and water use and waste, exceeding national minimum standards where appropriate;
• Either link closely to existing services or are of sufficient scale to offer a degree of self-containment, in order to reduce unnecessary trips and the length of trips.  They should be genuine mixed-use communities;
• Have local services and frequent public transport within an easy 10 minute walk of all homes;  
• Include substantial green infrastructure and demonstrate a net gain in local biodiversity.

This approach is very much in the spirit of David Willets permissive approach to localism, as inspired by Disraeli, rather than the  american, let it rip lassez-faire approach promoted in some quarters.

Melton apologises to Bunnyhuggers but still not happy with Archaeologists

Thanks to Planning Blog for pointing to this Radio 4 PM debate on You Tube.  He recognises now it would be contrary to EU directives, but doesn’t like them either.

Housing Voice Campaigns to Raise Profile of Affordable Housing

From Inside Housing.

A campaign is launching in parliament today to put pressure on the government to prioritise affordable housing.

The Housing Voice campaign has been set up to highlight the need for more affordable housing while also giving the issue greater prominence in government and the media.

Backers include David Orr, chief executive of the National Housing Federation, Alison Seabeck, shadow housing minister, Alison Graham of Child Poverty Action Group and Stephen Gilbert, the Liberal Democrat chair of the all party parliamentary group on housing.

At the launch Lord Whitty, chair of the campaign, will say: ‘Housing is currently beset by a perfect storm of demographic change, the long term shortfall of new homes being built, issues around the availability of finance for would-be buyers, and the inadequacy of available homes to rent in the social and private sectors.

‘The Housing Voice campaign aims to become a forum for ideas and a vehicle for action in order to build public awareness and push for urgent government action to deliver more affordable housing.

MeanwhileToby Lloyd  of Shelter has stated  the sector needs to come up with arguments ‘that this government wants to listen to’.

‘The housing sector tends to bang on about housing need, I think we have to accept fundamentally the government does not care,’ he said.

‘It’s because their strategy of housing allocation is that it should be based on the market. That is not unreasonable, 80 per cent of the housing in this country is based on the market.

‘We need to maintain lines about value for money, the economic impact, both the positive impact for housing investment and the negative impact of a lack of housing investment.’

Paul Finch backs UCO Employment to Housing Changes

At Architects Journal Paul Finch backs the proposed changes to the UCO allowing employment premises to change to housing without the need for planning permission.

There are two main opponents of the idea: the City of London and a substantial section of the planning professions.

In the case of the City, it is not opposing the root and branch of the idea, but simply the effect it will have on its own area. It is a sort of reverse nimbyism, rooted in sound logic. If the City is to be a major world business market, it needs as few hurdles as possible to provide the buildings necessary to do that business.

The more residential blocks you have there, the more real nimbyism will grow like a virus. …The government should exempt the City, and indeed any other area where a compelling argument such as this can be made.

The more general argument from some planners has less logic. It is based on the idea that only they know best, and that the identification of so-called employment areas should trump the need for the housing that those in charge of planning have failed to deliver….

I don’t believe planners who oppose the idea are doing so as a matter of self-interest. That is too cynical; in my experience they are quite idealistic about what they should be achieving, and what worries them about the government’s draft proposal is that it represents a threat to the concept of a balanced built environment – with the removal of office space seen as the commercial equivalent of ethnic cleansing.

They should go with the flow and monitor what actually happens, rather than avoiding the issue by giving local authorities autonomy in this area. If we suddenly find a shortage of office space, particularly for smaller firms, the likelihood is that the market will deal with it, subject to a constructive planning approach. These days, the conversion process will not seriously affect the workplace market, not least because of remote working made possible by the extraordinary advances in communications technology, letting you carry your workplace with you.

Well of course Paul its the politicians who have failed to back up planners wanting to provide more housing, and this proposed change is a rather desperate reaction to that by the self same politicians.  The market will deal with it if rent rise to above house prices/sq’.  In other words if the UK has the most expensive rents in the world.  NOt a formula for growth of ssmall businesses which provide jobs.  Any firm that wanted to do anything remotely noisy or anything larger than that which could be conducted in your front room would find it difficult to expand.  Paul your another one of the real enemies of enterprise.

Ken Shuttleworth – A return to the cheap boxy office block

The worlds worst architect has an interesting interview at Building, somthing of an epithany, criticing some of his previous work.

the days of designing buildings with “crazy shapes, silly profiles, and double curves” is over.

in an age of austerity, the market should focus on building “beautiful, simple, rectangular forms”

But Makes response so far has been to wrap ugly primary coloured cladding punctured by windows around rather conventional cores.  Ikea architecture.