Our intern Lizzie gives her view on the current political situation and what is store for the development industry…
Since the 23rd of June, Britain has been simultaneously waiting in anticipation and attempting to manage the chaos as the dust begins to settle over a post-Brexit political landscape. On the one hand, very little has changed in the month since the referendum however this illusion of stasis has only created an atmosphere of uncertainty, where everyone looks to the government and media with bated breath, expecting every new announcement to cause another tremor.
One of the more immediate effects of the EU referendum could be a slow down in the delivery of much needed housing. A recently published House of Commons briefing paper warns that new rules around the freedom of movement could have an adverse effect on building costs and supply. The UK construction industry’s use of migrant workers, as a percentage, almost doubled between 2007 and 2014, and as such a depletion in the migrant labour force could cause construction costs to rise. This could result in a decrease in the supply of housing, and in particular affordable housing as margins are pushed.
Although local government plays a minimal role in the delivery of new affordable housing stock, (this usually being left to housing associations or private developers) any councils that have development programs may alter them or halt them altogether in the uncertain economic environment. At a community level this could again mean less affordable housing available and significant additions to housing waiting lists.
A rather interesting outcome of the EU referendum has been the call from the Local Government Association and the Mayor of London himself, Sadiq Khan, to again call for the increased devolution of powers for London and other prosperous areas of the UK. It has been suggested that some EU responsibilities such as recycling legislation, food hygiene and air quality are ‘devolved’ to local councils, giving them greater autonomy. Mr Khan even went as far as to suggest that London and areas in the North (Manchester, Liverpool, Leeds, Sheffield and Newcastle) should be given greater fiscal devolution from Whitehall. This is not so far-fetched an idea, given that both Cameron and May’s governments have recognised the ‘Northern Powerhouse’ and pledged greater fiscal devolution for the North, which began last February when Manchester was given power over its health budget.
The powers that could potentially be devolved to local governments would greatly exceed those they have ever held, and in combination with new regulations around the collection of business rates, this could be one of the more positive outcomes of the EU referendum, as it would enable local government to tailor policies around their constituent’s specific needs.
The referendum result has caused a lot of confusion over local policy because many of the laws that now govern British Councils were first implemented by the EU, specifically those concerning energy efficiency, waste collection and disposal, procurement rules and state aid. Leaving the EU could have a further positive result for councils as they would no longer be beholden to the EU’s energy efficiency rulings. This could reduce overall expenditure, as it would mean councils would no longer have to adhere to requirements for the energy efficiency of their own buildings, products and services. This is further supported by the fact that Theresa May has abolished the Department of Energy and Climate Change which suggests that her government will be less focused on energy efficiency and perhaps sustainability. This could also be the case regarding waste disposal as councils will no longer have to pay fines to the EU for missing landfill reduction targets, which means lower costs, which ultimately could mean lower council tax bills. A potential win for local authorities, but where does it leave the well being of their constituents?
Theresa May announced this week that she believes ‘English councils’ should be involved in Brexit arrangements and negotiations, but it still seems to be ‘too soon’ to tell exactly what impact Brexit will have on local government. However with the government having announced that they will not trigger Article 50 this side of the New Year, one thing is for certain, the uncertainty will not be dissipating any time soon.
For more information please call 0203 176 4161