Government to support local 'development corporations' in England

It is consulting on a legal framework for locally-led 'development corporations', to ensure that they have the powers that they need to deliver new communities. It is also offering £10 million in seed funding to councils seeking to develop initial proposals for up to 10 such projects, from which one will be selected for further government support.

Housing secretary Robert Jenrick said that the proposals were designed to "drive economic growth outside London and the South East".

"Our new development corporations will empower local areas to come forward with ideas for new towns that deliver jobs, houses and economic growth – creating the future Canary Wharfs of the North and Milton Keyneses of the Midlands," he said.

Jenrick launched the consultation in Toton in the East Midlands, where the government is supporting the first of what it is describing as a "new model" of development corporations. Midlands Engine chair Sir John Peace is leading the project.

Development corporations have been used historically to deliver projects such as 'new towns', mixed use regeneration and urban extensions. They can help boost development by providing focus, coordinating plans for new development across different local authority boundaries and demonstrating the necessary public sector commitment to give the private sector the confidence to invest in sites.

Many of the laws governing the current generation of development corporations date back to the early 1980s. Development corporations also have different powers and remits depending on their governing legislation. In its consultation, the government is seeking views on whether this varied legal framework inhibits the operation of development corporations and to invite ideas on how the legal framework should be modernised and reformed.

Public policy and planning law expert Robbie Owen of Pinsent Masons, the law firm behind Out-Law, said that the consultation was "long overdue".

"These mooted reforms are significant because they will go a considerable way towards helping delivery of much needed housing and regeneration and renewal proposals," he said.

"We urgently need to increase the number of houses we are building in England, and there are still former industrialised areas requiring major regeneration and renewal. Development corporations are a well-recognised way of helping to secure the delivery of major housing and regeneration and renewal projects and programmes as they have enhanced powers, a different focus to local government, better funding, are to some extent insulated from day to day local politics and can also cover more than one local authority area. Yet outside Greater London and the areas covered by the English Combined Authorities in particular, the options are limited to a centralised model designed in the late 1970s and still in place now through a 1980 Act of Parliament," he said.

Owen said that there are increasingly demands for locally-led, locally accountable development corporations of a type not possible under the existing legislative framework except for new towns. One potential programme that could benefit is the Oxford, Milton Keynes and Cambridge arc promoted by the government, in which an anticipated one million new homes could be built. However, Owen said that it had never been very clear how this vision would be delivered, as some key individual local authorities "do not seem willing to rise to the opportunity".

Owen said that the existing legislation governing development corporations "should be brought together and modernised to provide a single but flexible model that can be utilised in many different ways, to suit the circumstances of different areas of England whether what is proposed is a new town, major housing or regeneration and renewal programmes and projects".

"Taking all four different types of development corporations possible at the moment, we have a confusing array of options in terms of the available powers of development corporations and also the procedures involved in setting them up," he said.

The government has appointed Sir George Iacobescu, chief executive of Canary Wharf Group and one of the original developers of the regeneration project, to lead the £10m competition. Councils will be expected to demonstrate that they want to build not only housing, but the supporting infrastructure needed to deliver "vibrant communities where people want to live".

Housing expert Iain Gilbey of Pinsent Masons said that a "joined up approach - both in terms of cross-boundary issues and in terms of the effective coordination of the delivery of the required social and physical infrastructure" would be needed to deliver new housing of the scale required by the government's own numbers.

"It is crucial that the necessary infrastructure is delivered in a timely way, in order to support sustainable placemaking," he said. "Whilst local authorities can work well to meet these challenges in their own areas, at a larger scale and on cross-boundary schemes a different solution will be required – and that is where development corporations can be powerful and most effective. We look forward to engaging in the government's consultation process."