The Tories’ localism agenda may risk becoming a nimby’s charter, but the construction industry should not forget that local people have a voice and deserve inclusion
So is the Conservatives’ notion of “localism” heart-warmingly uplifting or gut-wrenchingly scary? The Titfield Thunderbolt or The League of Gentlemen? In the cheery 1950s film, the locals of Titfield come together to fight faceless government bureaucrats threatening to axe their railway branch line. The locals triumph. As for the good folk of Royston Vasey in the BBC comedy, well, they present a less cheery picture of localism.
What’s instinctively appealing about localism is the promise of “power to the people”, but without the Che Guevara posters. Furthermore, it presents a clear alternative to the more corporatist approach of target setting and strategic development planning.
But, unfortunately, there is a critical problem at the heart of localism, and that’s the crudeness of democracy. Democracy is easily hijacked by minorities when indifference or inertia grips the majority. When the choice facing locals is broadly between win-win outcomes then all is well. But in a win-lose situation, as is often the case in planning and development, then democracy is found wanting. When you divi up the bill for a meal equally between diners, for instance, some lose out. That’s no problem when decisions are small and frequent and the swings-and-roundabouts principle holds, but not when decisions are large and rare.
Democracy becomes even less appropriate when the decision to green-light an urban extension or an airport runway involves gains extending outside the group that is taking the decision or making the sacrifices. Planners know this. Construction folk know this. Hence the concerns over the Conservative policy paper Open Source Planning. But if the Tories do end up with a majority, or in a coalition administration, it is likely that the policy will be implemented or accommodated – so the industry had better get used to it.
Perhaps it’s time for construction to find new ways to accommodate local aspirations and local feelings that will prove fairer than the ideas outlined by the Conservatives. While Open Source Planning is a flawed concept, its ideas on housebuilders incentivising locals to support development “by reaching voluntary agreements” touches on a vital point – local people respond to money or the promise of financial benefits.
Given this, smart financial engineering could offer mechanisms for pain-gain sharing that accommodate local people and businesses more actively and more equitably. With public sector funding set to dwindle and many private sector clients in extended hibernation, financial engineering might offer hard-pressed contractors a way to breathe life into otherwise dormant projects, through drawing in new funding locally.
Imagine, say, developers or contractors at the consultation stage offering local people and businesses the option of investing in “neighbour bonds” or “neighbourhood shares”. These would both raise finance locally and offer local people a financial stake in the project.
Bonds could be tailored to be compensatory – a payment in lieu of financial loss or disruption – or they could be tailored to reflect the financial gains that the developers, contractors or investors might make. Either way, local people and local businesses would have a choice of sharing in the longer-term success of developments in their neighbourhood. Bondholders and shareholders could even be given representation on the development board.
The link between financial engineering and local development has already been established elsewhere. The Tax Increment Financing (TIF) approach, for example, has played a major role in local redevelopment in the US for decades. And new financial tools could help development and construction firms build more fruitful relationships with local authorities.
It would not be easy, mistakes would be made – and indeed have been in the US. But if localism is to determine the fate of construction projects, it would be better to turn the unmistakable threats localism presents into potential opportunities.
Brian Green is a construction commentator and blogger
