District Matters

Rapid changes

August 2022

Well, it's amazing the difference a month makes. It is becoming increasingly evident that the world has changed. The combination of war in Ukraine and a long, hot summer is pushing inflation higher and making the ‘cost of living crisis' far more difficult and expensive with which to deal. What is also now very apparent is that this is not just a short-term blip.

There is an expectation that energy prices will not come down significantly until 2024 and even then, they are unlikely to revert to 2021 levels. I have seen an estimate that offsetting the energy cost increases for everyone for one year would cost £37 billion. This estimate is, I think, already out of date.

To put that in context, the FT on Saturday 13 August reported that the Bank of England's latest forecasts show that debt service costs are likely to be £95 billion next year. This is almost double the current level, before any additional borrowing or tax cuts.

Obviously, some of my previous columns have been far too optimistic.

It is all too easy to focus on our local council, so it is interesting to note what is happening at some other councils:

• Thurrock, as reported in the Daily Mail, borrowed £644 million to invest and may end up costing taxpayers £200 million.
• Slough Borough Council, which currently has borrowings of £680m and needs a ‘fire sale' of assets to raise about £500m, and even then, may need to raise council tax by 12-20% a year for the next 3 years.
  The catastrophic saga is outlined in graphic detail - Best Value Intervention - Slough Borough Council (publishing.service.gov.uk)

I could readily list a number of others. The combination of stagflation and rising interest rates will probably uncover more difficult issues at more councils. The general point is that an inept council can end up costing local taxpayers a lot of money. Competence really does matter. Allied to this is the need to be aware of undeliverable promises. For example, Northamptonshire County Council kept council tax unsustainable low and has been wound up.

Very shortly we will be starting the next budget round. We do not expect generosity from central government. Nor do we anticipate using a combination of borrowing and catastrophic investment decisions to take away the likely pain. We will remain realistic and disciplined in our approach.

We are currently in the early stages of developing the South Warwickshire Local Plan which will run through to 2050. The very uncomfortable reality is that, as long as the population continues to increase, there will be the need for more houses. In our current Local Plan that runs from 2011 to 2031, we have to deliver 14,600 houses. I would expect that the new Plan will probably entail delivering more. I would not be too surprised if, for Stratford District alone, this would be in the order of 20,000 more houses. During the creation of the last Local Plan, there was massive resistance to increasing housing numbers. Every Local Plan has to be examined by the Planning Inspectorate. Until the Inspectorate is satisfied with the Plan, it will not be approved. One of the results of the strong but utterly doomed resistance was that we ended up with ‘planning by appeal'. This effectively gave control to developers. It meant development took place in areas where we would have preferred it not to happen.

We have no intention of repeating that mistake.

There are two additional reasons for starting the process early and running it through to 2050. It provides more options, particularly regarding the creation of new or significantly enlarged existing settlements. It also means that we can have early dialogue with the range of infrastructure providers that will need to be involved. Indeed, it has already commenced.

Infrastructure is emerging as a likely key constraint on development. The critical infrastructures are:

• Roads - the providers are either Warwickshire County Council or Highways England.
• Schools - overseen by Warwickshire County Council (most schools are Academies so are nominally independent).
• Electricity - the provider is Western Power Distribution. (In my last column I mentioned that the grid needs investment of a mere £54 billion. Electricity supply is already a constraint in many parts of the District).
• Water Supply - drainage and sewerage; the provider is Severn Trent, with the increasing impact of climate change, none of these can be taken for granted.
• Health Services - in the case of hospitals provided directly by the NHS, in the case of GP surgeries funded by the NHS.

This should provide a feel for the complexity of the process of developing a Local Plan.

There will be no escaping decisions on where to put development with which many people will be unhappy. Whilst we will, of course, consult and listen to peoples' views and concerns, a Local Plan will have to be produced that meets the Planning Inspectorate's requirements.

Pretending this is not the case is, as I said earlier, folly. Anyone who pretends otherwise is disingenuous. In my view, facing reality and setting out the stark options for people, knowing that many people will find them unpalatable, is what political leadership is all about. Telling people what they want to hear is all too often an unsustainable fantasy that usually only make things worse.