SCOTLAND’s New Towns (East Kilbride 1947, Glenrothes 1948, Cumbernauld 1956, Livingston 1962 and Irvine 1966) were an early example of so-called ‘public interest-led development’ (PILD), set up in the immediate post-war years when the shortage of housing was at its most acute.
Their example is often forgotten nowadays, but it is interesting to look at them to see what we can learn.
The New Towns were set up under an Act of Parliament – the Local Government (Scotland) Act 1947 – which gave their governance bodies, New Town Development Corporations, wide powers – including those of compulsory purchase – and substantial funding.
They employed their own teams of in-house architects, planners, surveyors and engineers.
The New Towns were able to borrow money from the Treasury, at the same – relatively low – interest rate as the Public Works Loan Board, and paid back over a long time period, the final payment being made in 1999.
They were able to use that money to buy land, develop infrastructure, build public sector houses, schools and all of the social facilities needed for residents to enjoy a full life, develop industrial and business areas and much more.
They gained substantial economic and development expertise, acting as a focus for inward investment to provide businesses and jobs.
The build-out rate at its peak was in excess of 1,200 houses per annum – less than the 2,500 houses per annum which were produced at one of the UK’s best-known New Towns, Milton Keynes (read more, here), but very comfortably ahead of any private or public sector development which has happened in Scotland in the last 30 years or more.
They worked in partnership with private sector housebuilders, providing the infrastructure to allow them to build houses for sale, and selling them the land at full development value, having acquired it at much less, as they had to pay for the cost of all the infrastructure.
The surplus, after all loans were repaid, went back to the Treasury, and land sale receipts generated a substantial additional income.
Whilst we might think nowadays that any surplus might be better being returned to the community, the New Towns nevertheless provide an example of successful public interest-led development, using, in part, partnerships with the private sector, to build successful communities.
It is often believed said that one of the reasons for their success was that they were able to buy land at ‘existing use value’ (EUV) and re-sell to developers at full market value.
In fact, only the two early examples – Glenrothes and East Kilbride – were able to buy any substantial areas of land at EUV. By the time the bulk of the next New Town, when Cumbernauld’s land purchases got underway, compensation for ‘compulsory purchase orders’ had reverted in 1959 to its pre-1947 basis of market value.
There has been a recent focus on the New Town legacy as part of a wider reflection on the loss of what was in part the social and egalitarian mission which underpinned the New Town movement.
As Bob Colenutt and Sabine Coady Schaebitz say, in their article for the Institute of Historic Building Conservation: Context 162 (2019) (here): “New towns were extraordinarily ambitious.
“What made them different was that they were comprehensive town developments providing complete living, working and recreational places along with public services from cradle to grave, within a setting of extensive green space and public parks.”
Since their construction, the popularity of New Towns has waxed and waned, but there is currently a renewed interest in their achievements.
Like many large-scale developments of the post-war era, they have suffered from a lack of investment, which is needed to meet the changing requirements of the 21st century, and, for many New Towns, this still needs to be addressed.
There are issues of governance, of course. The New Towns were developed by their Development Corporations, and there was a singular lack of local democratic input, neither the local community nor elected representatives from nearby communities being significantly consulted.
It no doubt ensured a quicker process than would otherwise have been possible, but that is not a procedure which would be regarded nowadays as acceptable.
With the New Towns, the public sector took most of the risk, and received most of the reward (if we regard the Treasury as part of the public sector).
As my colleague, Steven Tolson, and I said in our discussion paper for Scottish Land Commission (‘The Delivery of Public Interest Led Development in Scotland’ (here), March 2018), it is a lesson which we could usefully study, as a basis for new forms of current PILD development.
It is interesting too to look at successors to the New Town model.
Erskine New Community was begun in 1970, and bears great similarities to the New Towns, but with one fundamental difference: it was developed in a partnership between Renfrewshire Council, and a government body, the Scottish Special Housing Association (SSHA).
SSHA had been set up in 1937 to provide employment and housing in ‘Improvement Areas’, a remit which was later extended to all of Scotland.
Like the New Towns, SSHA employed a large team of architects, engineers and surveyors, and was responsible for the master planning and development of many post-war developments, constructing over 100,000 units up to the early 1980s, when it fell foul of UK government funding drying up.
Its housing stock was transferred and many of its staff were transferred into Scottish Homes, as part of the Scottish Office, as it then was, but the development role was lost.
All of the public sector housing, which was intended to be around 50 per cent of the total, was constructed by the SSHA.
Land at Erskine was acquired by the local authority, using its compulsory purchase powers. Infrastructure was created and land for industry, leisure and retail was serviced and sold by Renfrewshire Council to the private sector, for private housing and commercial development. The local authority developed the schools and social facilities, much as the New Town Development Corporations did.
This is an useful example of a successful PILD happening as a partnership between a local authority and a government body, without the need for the special legislation developed for the New Towns, and demonstrates that such developments can happen under the current legislation – if there is a will to do it.
These are models which have developed in Scotland.
Meanwhile, models in Continental Europe developed differently.
These have been considered by two papers commissioned by Scottish Land Commission: ‘Local authority land acquisition in Germany and the Netherlands: are there lessons for Scotland?’, by Professor Tony Crook (2018) (here), and ‘Housing land allocation, assembly and delivery: lessons from Europe’ by Satsangi and others (2020) (here).
Professor Crook characterises the German position, thus: “German municipalities capture development values when they zone land for new development. They do this by temporarily pooling sites in mixed ownership, service them and return them back to their original owners, net of the land needed for public uses, at prices that cover municipalities’ infrastructure costs and the impact of the re-adjustment on values.
“In designated regeneration areas, municipalities can freeze existing land values, allowing them to acquire land at these values, install infrastructure and sell on to developers.
“Where developers undertake new development themselves, they pay a share of municipalities’ infrastructure costs.”
The position in Netherlands, regarding what has been termed its ‘active land policy’, is as follows: “In the Netherlands, when municipalities were very active in acquiring development land, especially for affordable housing, they captured some development value by buying land at prices that reflected planned new uses, but without infrastructure.
“They then serviced it and sold it on to developers (many being housing associations, at prices covering their infrastructure costs. Municipalities are now less active in the land market because of the financial risks of land holding.
“Infrastructure is funded by developer contributions and municipalities can now use planning powers to require developers to build new affordable housing.”
Dr Satsangi summarises the position in Germany, Netherlands and Switzerland as follows: “In all three countries, municipalities are actively involved in land assembly, either via an active land policy or land readjustment.
“The Netherlands is best known for its active land policy in which municipalities acquire land, service it before selling it off to developers, though German and Swiss municipalities are engaging in public land banking to deliver public policy goals and accrue land value uplift.
“Pre-emption rights support land assembly. Land readjustment is practiced in Germany and Switzerland and allows municipalities to assemble and re-parcel land without actually acquiring the land.”
There is much to be said about these methods of housing and place delivery, and I would recommend a perusal of these papers for a full picture of how things are done in these countries, how they have changed over the years (for example, Netherlands is now adopting land pooling as a means of land assembly), and what we can learn from them.
What cannot be doubted, however, is the very strong element of public interest-led development (PILD) as a means of housing and place delivery.
This can be contrasted with the position in Scotland, which is summarised in a recent Scottish Land Commission briefing paper, ‘Land Focus: land for Housing and Development, (2020) (here): “The speculative private development model, which is currently delivering most housing in Scotland, is not suited to increasing the supply of new homes or making homes more affordable.”
Essentially, the problems with our current housing delivery model can be summarised in a few statistics:
- Between 1952 and 1976, for 25 years, we averaged 34,000 houses each year; we struggle to achieve over 20,000 in any year now, when housing need is estimated at 23,000-25,000 per annum (page nine of Housing Statistics for Scotland 2017: key trends summary (here));
- Most private sector houses built are three-to-five bedroom, detached family houses, when almost two-thirds of us are in one or two-person households (Page five of NHBC New Home Statistics Review, 2018 (here));
- The fastest-growing, and largest, household size is one person, with an ageing population, yet only one per cent or so of private houses constructed are single-storey, suitable for older people wanting to move down, when 25 or so years ago around seven per cent of new houses were single storey, and 30 years ago the figure was 14 per cent (NHBC figures); and
- There are very few sites available for self-build, custom build, or co-operative housing.
It was this background which led Steven Tolson and I to produce the discussion paper mentioned previously for the Scottish Land Commission, in which we developed a PILD delivery model.
We noted the need for a body to act as ‘prime mover’, which would:
- Work in partnership with local authorities and the local community;
- Acquire land, do masterplanning and develop infrastructure;
- Sell land to developers, ready to build, at full market value, with no need for so-called ‘Section 75’ discussions, where planning approval is
- Reserve areas for various house types and tenures, as required in that location, such as self and custom-build, cohousing, affordable housing and build-to-rent; and
- Deliver housing at the pace and type required according to local need, and not related to what has been called the ‘market absorption rate’, where the pace of build-out is determined by the limits at which the market will absorb them.
Similar recommendations have been made by the Royal Institution of Chartered Surveyors (in Building a Better Scotland, 2014) and also the Land Reform Review Group (here), which, respectively, use the terms, ‘Housing Land Delivery Agency’ and ‘Housing Land Corporation’, to describe such a body.
It is also worth noting that the Scottish National Investment Bank, as part of its remit, can lend for housing and infrastructure.
It is surely time to consider what might work, rather than continue to persevere with the current policies which have proven unsuccessful for the last 40 or so years.
Archie Rintoul is a former chief valuer (Scotland), leading the Valuation Office Agency in Scotland, and also a former Scottish chair of the Royal Institution of Chartered Surveyors.
He is still actively involved in housing and related issues, through RICS, and is a member of NHBC Scotland board, Hillcrest Housing Association board, and various other public bodies.
This paper is a version of an article published by the Glasgow-based UK Collaborative Centre for Housing Evidence, here.
Pictured: north end of Livingston, at the interchange with the M8 motorway
Picture credit: PlaceDesignScotland