New towns in England: what next for the winners and runners up?

Which schemes will receive support as new towns?

As trailed, the government has plumped for a mixed bag of 12 schemes (135-page / 6.7MB PDF) comprising a combination of new settlements, sustainable urban extensions and town and city centre schemes to try and ensure some "quicker wins" and "spread bets" as well as England-wide coverage. The 12 schemes are:

Brand new settlements

• Adlington, Cheshire East: a standalone settlement to serve the growing industries in Greater Manchester and Cheshire, as identified in the government’s industrial strategy.
• Marlcombe, East Devon: a standalone settlement bolstering the region’s labour supply and support the Exeter and East Devon Enterprise Zone.
• Tempsford, Central Bedfordshire: a new settlement to maximise the benefits of East-West Rail, by building a well-connected new town in the heart of the Oxford-Cambridge growth corridor.

Already promoted new settlements

• Heyford Park, Oxfordshire: redevelopment of the former US Air Force base near Bicester - this scheme has already started.
• Worcestershire Parkway: expanded development at Wychavon, accelerating delivery around the existing train station to meet regional housing need and act as a model for sustainable, carbon neutral development.

Sustainable urban extensions and city centre regeneration new communities

• Brabazon and West Innovation Arc, Bristol/South Gloucestershire: a corridor of connected development building in one of the highest productivity areas in the country with a high value research, advanced engineering and technology economy. The Brabazon scheme at Filton has already started.
• Chase Park and Crews Hill, Enfield: an expanded development which would deliver green development and helping address London’s acute housing need.
• Thamesmead, Greenwich: the creation of a riverside settlement, unlocking inaccessible land in London and improving connectivity if the proposed extension of the Docklands Light Railway can be achieved.
• South Bank, Leeds: urban development in Leeds, capturing the benefits of the government’s £2.1 billion local transport funding allocation for the region by delivering well-connected, high-quality homes to support the city centre.
• Victoria North, Manchester: inner-city development and densification around Collyhurst and north Manchester, supporting continued growth and attracting high-skilled workers to service the city’s diverse industries
• Milton Keynes, Buckinghamshire: a ‘renewed town’ proposal, reinvigorating the city centre and expanding to the city periphery whilst reshaping the way people travel, by delivering a mass rapid transit system
• Plymouth, Devon: densified development in Plymouth, evolving Britain’s Ocean City and capitalising on the £4.4 billion investment in HMNB Devonport, western Europe’s largest naval base.

What next for the selected schemes?

Consultation and strategic environmental assessment

In its interim response to the task force recommendations, the government has confirmed it will progress a consultation on draft proposals and a SEA on the 12 recommended locations “early next year”, with a view to at least three of the sites being targeted to begin delivery before the end of this parliament.

Housing numbers

The government will set out more detail on how the delivery of new towns will interact with local housing need, which is clearly a key issue. In the meantime, though, the government wants to “reassure local leaders that a consistent and fair approach will be taken to how local housing need targets interact with the future delivery of new towns, to support our overall aim of increasing housing supply”.

Development corporations

The task force says there should be a role for development corporations in virtually every form of new town scheme. The various planning, funding, land assembly, place-making, stewardship enabling and delivery focused roles of different types of development corporations are championed extensively.

To work, the "pick and mix" approach to development corporation purposes, powers, functions, resources, boundaries, speed and so on will need to be tailored to the particular circumstances of each project to be most effective. Interim vehicles are key, and feature in all of the proposals made to the government over the last few years.

There is also emphasis on centrally-led urban development corporations as well as mayoral development corporations, although there could be a squeeze on locally-led urban development corporations unless the local authorities have a good track record of delivery. For example, the task force notes that “provision currently exists for a centrally-led development corporation to transition to local authority control … but the appropriate structures should be put in place to enable potential transfer to Mayors in future.”

The task force recommendations include that where there is a clear rationale for a new town’s delivery body to acquire land, this should happen at the earliest possible stage, with the development corporation becoming the planning authority if used in developing a new town. However, the distinction between plan-making and development management functions is not addressed and there have been varying experiences of this in practice.

The task force also recommends that new town delivery bodies should ensure early certainty for landowners by setting out what value they can expect for their land. New town delivery bodies should implement a robust skills strategy that regional training providers align with and which addresses current workforce shortages, with an encouragement of innovation in the construction sector as part of the build out. New town delivery bodies should effectively coordinate infrastructure strategies for new towns to ensure that residents’ needs are met.

In its interim response, the government agrees with the task force recommendations of a “preference” for a development corporation, whilst recognising the “need for flexibility depending on the circumstances of each site”.  It said: “The government will assess the delivery vehicle options for each place, including consideration of central, mayoral and local development corporations, and the potential for public-private partnerships”.

The direction of travel, however, seems clear – we are going to have a lot more development corporations on their way.

Funding

The key themes from the task force are government loans, government-backed guarantees and land partnerships or joint ventures, rather than grant funding, in a financially challenged fiscal environment and to ensure the public purse sees a return on investment where appropriate.

However, grant funding could potentially still be part of the mix, particularly if a scheme has a development corporation. Indeed, it is specifically recommended that the government will need to provide significant up-front funding for new towns. The government’s interim response also confirms that the delivery of new towns will be backed by the Social and Affordable Housing Programme, along with “hundreds of millions of grant” from the National Housing Delivery Fund and additional capital funding managed by the National Housing Bank. No specific figures are given, however.

The task force recommends establishment of new towns be factored into future spending plans of other departments and regulators, ensuring they have the utilities, transport and social infrastructure needed for the community to thrive. The government’s interim response confirms that this will happen.  

It also recommends the government explores tax financing instruments within the financing model for each new town over the long term. This is already an area of particular interest, with a number of schemes in dialogue with the National Housing Delivery Fund, MHCLG, the Treasury and Homes England.

Beyond land value capture and institutional investors, the task force also suggests that government should explore the role of tax within the new town’s financing model, to support the delivery of new towns. The partial funding of Crossrail in London, as well as international examples such as special tax districts in the US to cover social housing and development costs, are highlighted. Beyond the boundaries of the new town, regional transport authorities will need the tools to capture the revenue benefits of local transport schemes so they can fund transport projects.

The government’s interim response confirms that a working group bringing local leaders together with the Treasury is exploring how to unlock potential levers, but there is no suggestion of any tax reliefs or capital allowances at this stage, despite this being lobbied for. Other levers to institutional and development investment into these projects, such as works in kind cost savings or securitisation of microgrid and data trust income streams, are not dealt with.

Testing the 40% affordable housing requirements, half of which should be available as social rent, is critical. In its interim response, the government’s interim response stated that this is the “aim” rather than a “definite”, so testing will be key. It is helpful that the task force recommended that new town masterplans should include specific measures to support accelerated build out. This is linked to another recommendation that new town business plans should phase development by flexibly advancing different tenure types across the project’s early life. Tenure flexibility per phase in the planning policy and resultant planning permission for new towns would indeed be highly helpful in cashflow terms.

Land assembly, land value capture and compulsory purchase

These figure highly, with use of CPO powers, ‘no scheme’ valuations and disapplication of hope value all encouraged by the task force and the government’s interim response. These tools can work well on some schemes but can cause delays in others if not handled properly: the task force acknowledges this, but it does need further elaboration. The government’s interim response confirms that it will examine where opportunities to use the power to disapply hope value would make a difference to delivery of a new town. It also reiterates that the new town compulsory purchase guidance is clear that a fully developed new town scheme is not necessary to commence a CPO and that “we will ensure that new town development corporations are resourced to progress acquisitions via CPOs – where they are needed - as quickly, efficiently and fairly as possible”.

Viability

The government’s interim response confirms it is reviewing the planning practice guidance on viability, which sets out how land value should be defined for the purpose of viability assessment. The interim response states that the government will set out, in due course, further detail on viability and land value considerations for new towns. This will help to ensure that landowners receive a fair return while also minimising the development costs that are borne by the new town delivery vehicle to deliver high placemaking standards. 

Public-private partnerships

PPPs are encouraged, provided that they demonstrate alignment with the new town principles. The opportunities for partnerships with the private sector will be place dependent and vary in length and type of financing, and investor demand will be influenced by the specificity and clarity of each proposition. Masterplanning, planning certainty, stability and continuity are highlighted as the requirements for an investible partnership.

Role of local authorities

The task force emphasised that most involvement will be where those local or combined authorities have a strong recent track record of housing delivery, or have robust plans to develop capability to deliver on the scale required. In these cases, the local authorities should play an “enhanced role” in delivery of new towns.

How a “strong recent track record of housing delivery” will be measured still requires confirmation. The task force recommends, though, that local authorities should still have a role on the governing body of any new town development corporation to ensure that the interests of existing and neighbouring residents are represented, as well as supporting effective long‑term stewardship.

It is recommended that new town delivery bodies should develop robust strategies to secure local support for each new town; and that shared responsibilities between elected local government representatives and new town delivery bodies should be captured in a contractual deal with elected leaders with a stake in each new town location.

Planning and regulatory reform and guidance

The task force has recommended a large range of planning and regulatory reforms for the government to consider, including:

• an immediate commitment to an interim planning policy to protect new town locations;
• clarity from the government on the interactions between new towns and local housing need targets;
• clear minimum density thresholds, although this will surely need to be tailored to each circumstance;
• a minimum target of 40% affordable housing, of which at least half to be available for social rent, as referred to above;
• exploring whether it can fast-track the statutory consultee process for new towns, as this takes around 18 months to two years at present;
• considering reviewing the current legislative framework to ensure it is set up to support successful and accelerated delivery of new towns and other large-scale developments more generally;
• moving to a standardised and updated route for assessing the impact of development on strategic roads to allow for progressive monitoring of the impact from new development over time. Sorting out transport modelling delays is indeed fundamental;
• reviewing the regulatory cost drivers for urban mass transit schemes and providing guidance on reducing costs for future new settlements;
• reforming the national infrastructure and planning processes to support the government’s strategy for bringing forward future waves of new towns;
• ·new town-specific local plans are encouraged, alongside a toolkit of supplementary plans, outline applications, local or mayoral development orders (L/MDOS), special development orders (SDOs) and hybrid models combining elements of both;
• treating new towns as a strategic priority as part of a coordinated cross-Whitehall approach, with government departments responsible for infrastructure prioritising for new towns as part of their future budgets.

The interim response from the government tackles a number, but not all, of these recommendations.

• more call-ins of new town schemes are clearly indicated;
• a plea to local planning authorities for areas in which a new town may be located to continue with plan-making in a positive and proactive manner and give consideration – presumably as a material consideration in planning terms – to any potential impacts of other developments on the delivery of the locations recommended by the task force for potential new towns;
• spatial planning frameworks will be established for each new town location, following SEAs and relevant consultations. These will reflect infrastructure and affordable housing placemaking principles and the expected developer contributions required to deliver such principles through capturing land value uplift;
• The government will consider how best to support the development of new towns in the National Planning Policy Framework (NPPF) in its autumn consultation.

In addition to providing funding and infrastructure support set out above, the interim response confirms cross-government collaboration between MHCLG and DOHSC, DEFRA, DEWP and DCMS to co-ordinate healthy living, nature positive and climate resilient approaches, new skills partnerships and economic hubs and the opportunity for culture, sport, youth and community infrastructure. The objective is to have a “single front door to government”, with the government’s New Towns Unit joining forces with Homes England in “a new delivery partnership to lead on discussions with places and work across government departments to stress-test spending and delivery plans for the vital economic and social infrastructure that each new town will require”. The housing minister will oversee this work, reporting directly to the Home and Economic Affairs (Infrastructure) Cabinet Committee. The government will also ensure that valuable expertise and direction from outside of government is continuously fed in, with the establishment of an advisory group to provide expert advice on delivery, placemaking, quality and design.

Stewardship

The task force recommended that a long-term stewardship model for new towns should be in place from the outset, including clear governance and funding structures to manage and maintain communal assets, building on ongoing work in that area. There are opportunities for new delivery models and income streams to move away from the dependency on service charges, in particular the relationship with microgrid, fibre, EV charging and data trust income streams.

Sustainability framework

The task force suggested that a sustainability framework for new towns should set out a clear environmental vision which highlights ambitions, sets high standards, and identifies areas for innovation where even more ambitious standards may be achieved. This could, for example, include targets related to renewable energy generation water supply or biodiversity, among other areas. It calls for particular consideration to be given to future climate risks.

Innovation in construction

The task force notes that as new towns are large-scale developments, with the planning and placemaking principles established up front, they should provide a stable pipeline for housebuilders and manufacturers, which should support modern methods of construction (MMC). The certainty of timescale and horizons beyond short term market cycles provide the foundations for confident long‑term investment in a sector which has been struggling. Large-scale new towns may also provide an opportunity for creating new on-site MMC production facilities, fostering innovation at the same time as creating local employment opportunities and skills.

Utilities provision

The taskforce recommends that new town delivery bodies should effectively co-ordinate infrastructure strategies, developing detailed plans to ensure that the needs of residents are met. For example, development corporations have all the powers needed to provide utilities infrastructure directly where needed and enter agreements with providers across water, power and heat networks. Ebbsfleet Development Corporation’s model - where it has taken on infrastructure co-ordination for the whole site, agreeing innovative approaches to providing modular utilities access and agreeing with electricity providers to pay back the cost of ‘up front’ upgrades over time - is highlighted. The water industry should also commit to taking a long‑term approach for water drainage resource management plans for new town locations, to plan for additional investment.

Digital delivery

The taskforce recommends that new town delivery bodies should work with MHCLG, Homes England and the housebuilding industry to adopt a digitally-enabled integrated approach to planning.

New town delivery bodies should also ensure that new towns are designed with future digital needs in mind, including reserving space for digital infrastructure and embedding the timely rollout of new transmission technologies in their planning policies. This will ensure that new towns are digitally resilient and able to support continued growth and investment into the future.

This approach to digital planning and digital infrastructure is commendable – we would like to see further emphasis on community data stores, ‘digital twins’ and community apps which are valuable tools that can be incorporated to save time and money in masterplanning, construction and stewardship of new towns and also provide income streams for stewardship.

Next steps for the runners up

There remain some warm words and support for schemes not selected. The task force notes that “there remains a significant need for smaller new settlements and sustainable urban extensions with co-located housing and employment opportunities, alongside physical and social infrastructure. Many schemes not selected will still be well placed to deliver these benefits”.

While government funding and support may well concentrate on the selected sites, there are many locally-led and privately funded new town, SUE and city centre site opportunities which can still be progressed. Institutional and private equity investors involvement can be targeted, particularly where land values are reasonable and sales/lettings values higher. Government support via Homes England can also continue to be explored, as well as the opportunities available to engage with the National Housing Delivery Fund and the National Housing Bank. The recommendations from the task force can also provide useful ingredients for a wider variety of schemes.

Next steps from the government

The government will publish the draft proposals and final SEA for consultation early in 2026. It intends to confirm the locations that will be progressed as new towns later in the spring, alongside a full response to the new towns task force’s report.