This blog post relates to the new paper Infrastructure to support housing.
We often hear that Britain is in the midst of a housing crisis. The government aims to tackle it by building one million homes in England over the next five years, with the annual build rate rising towards its 300,000 homes target. This will require the expansion of some of our cities, towns and villages – alongside the creation of entirely new settlements.
Inevitably, these emerging communities will need water, energy, wastewater and broadband, so further infrastructure must be built and existing services strengthened. Infrastructure can take longer to deliver than housing, so usually it’s necessary to invest in it at an earlier stage in the process. This means that utility companies must work with developers and planning authorities to ensure coordination.
Developers have been open about the challenges they face in getting their properties connected to utilities. Beneath our feet there’s an intricate arrangement of cables and pipes supplying buildings with these vital resources. While historically there may have been space to accommodate new housing on this network, today it’s under pressure.
The impact of drought and flooding will challenge our water and wastewater systems. While Britain pursues net zero, electricity demand is expected to rise, as we plug in more electric vehicles and install heat pumps to warm our homes. And with digital connectivity increasingly considered a basic need, gigabit–capable broadband may become a requirement for new build properties.
Back in July 2018, the Commission’s National Infrastructure Assessment found that there were barriers to effective deployment of infrastructure to support housing. Expanding on that, today we are publishing a new paper examining the role of utilities in supporting housing delivery. This has been informed by engagement with developers, planners and infrastructure providers.
These stakeholders have shared concerns that aspects of the legal, regulatory and governance frameworks within which they operate have been hampering delivery. Our paper incorporates their feedback and takes a closer look at the problems they are grappling with.
We have identified four core issues, with the first centring on transparency. The accessibility of information concerning the location of new homes, the capacity of utility networks and the likely cost of connection needs to be improved. This would help developers factor in more accurate costs of utility provision when purchasing land for future development.
Second, large developments, especially where there are multiple developers involved, could benefit from a coordinating body to help bring relevant parties together and prepare the utilities required for housing development sites. We think development corporations are best placed to do this, and where this is not feasible, planning authorities should be resourced to take on this role.
Similarly, infrastructure providers can be poor at providing timely updates to their customers about milestones for deployment. To remedy this, regulators should focus on monitoring and reporting this area, to ensure the expectations of developers and planning authorities are maintained and met.
Finally, developers and infrastructure providers are reluctant to carry the risk of investment in infrastructure until they have certainty that it will be used, and they can be confident their outlay will be recouped. The issues this creates will persist unless parties are incentivised to manage risk differently or change to the regulatory frameworks shift the balance. Regulators must evaluate the impact of such shifts on all utility network users.
We hope this paper will draw attention to these challenges and highlight some of the solutions that have been identified across sectors. By making improvements to the way infrastructure is provided for new housing, some of the barriers to getting new properties built quickly should be removed. This will be an important step towards ensuring that more people have access to the homes and services they need.
Olivia Powis is a senior policy adviser at the National Infrastructure Commission.