Local Government and Housing Committee

Bore da. My name is Dorian Payne. I am the founder and managing director of Castell Group. We are a partnership house building company specialising in social and affordable housing right across Wales. We work pretty much with all local authorities, and we are delivering sites with housing associations and local authorities directly. We are land-led, so we are involved at the very earliest stage, and we also do the construction, so we provide a turnkey.

Good morning, all. I'm Mark Harris, I'm planning and policy adviser for the Home Builders Federation in Wales. We represent the larger and medium-sized house builders, mainly focused around the private sector.

Good morning, all. I'm Fiona Clay-Poole, senior policy officer for planning and economic development at the Welsh Local Government Association.

Good morning, committee and Chair. I'm Simon Gilbert. I'm here today representing Planning Officers Society Wales, which is a group of all the chief planners across all local planning authorities in Wales. My day job is head of planning at Cardiff Council. Thank you.

Thank you all very much for coming in to give evidence to committee. I'll begin with some general questions to set the context. We're concerned with how well the Welsh Government has responded to our report and to the affordable housing taskforce's recommendations. In general, do you believe the Welsh Government has been proactive enough in responding, and should there be greater prioritisation in terms of any particular recommendations? Who would like to begin?

I'm happy to make a start. When you're on the side of a report where you can see good recommendations that you support and you want to see implemented, you always want things to happen very quickly. There are clearly elements of recommendations that require legislative change, and the timing of the report was unfortunate, in the lead-up to the elections. It was very quickly established there wasn't going to be time to deal with some of this legislation. I guess there is an argument there that if you decide that housing is your priority, you could look at the other bits of legislation that are going through and go, 'Well, actually, we could bump that one, that one could wait, and we could put this one in front of it'. But, obviously, the public, I guess, have no understanding of how that conversation would even happen.

I think the other thing that we're aware of, certainly within the house building industry, is there are other issues that have come along. Probably the big one has been nitrates, and still some leftover stuff from phosphates. We're aware that that has taken up a lot of resources and time. So, yes, things are happening, but it does feel like they are happening quite slowly, if I'm honest.

Yes, okay. Thanks for that, Mark. Dorian.

Yes, sure. Thank you. I was very privileged and pleased to be a part of the round-table, like others as well, just to provide some context. It was great to see that the recommendations were supported, recommended and accepted, but as Mark says, really, as split out, there's the short term, the medium term and the long term. I think the real movers are going to be the medium and long-term recommendations, and I know that there are constraints as to why they all can't just be done today because there were over 40 recommendations. But I think, as I put in my point, the key needle-movers will be the medium-term objectives, which haven't yet been implemented, for obvious reasons.

I think the biggest one in the short term, which maybe Simon can allude to, was the internal reconfiguration of the importance of social housing, and having a direct designated member to drive through applications. But that's more from internal—I don't know how that's gone, so I'll pass over.

Thank you very much, Dorian. Did you want to—

A nice segue to me, Chair, maybe. I think, generally, across all professions and disciplines and those involved in the taskforce, the recommendations were very well received. They all seemed to make sense. They were all addressing an issue that was prevalent in areas of Wales, more so in some areas than others with regard to environmental matters. But generally, there is a consensus between all professional bodies, I think, that we have a housing crisis. We aren't delivering enough social housing in the country, and we need to collaborate to do more. So, I think the sentiment is superb. I would suggest that we move from a taskforce recommendation phase to a monitoring and implementation phase as quickly as possible. I think that's the overriding message here. And there are some easier wins than others in that, perhaps.

I think with regard to accelerating the delivery of social housing, in particular, there is great work being done collaboratively between people around this table, but generally within organisations. And I think the work that Welsh Government officials are doing in terms of trying to co-ordinate and capture that practice through an implementation phase has been really welcome in the last year or so. But I think we should do more, Chair, and maybe identify those areas that do have a more exemplary process, and then share that across the regions and across Wales.

Who would do that then, Simon?

I think it can come through the group that's been established to look at the taskforce recommendations, led by the planning division in Welsh Government. But it does need communication reach and buy-in from organisations, where possibly there's a role for the Welsh Local Government Association as well. It's already happening; it's just that unless we capture it and share it, then it won't happen everywhere.

No. Okay. And Fiona.

Just to build on that, I think the WLGA does have a role in this, and I think it would be really good to pick up on the momentum now and not lose what's already been established. There's been really good progress to date, but still an awful lot more to do. I think moving from taskforce to implementation is key here, because I think what we see in Wales quite a lot is that taskforces are established at a sort of crisis point to deal with an issue, and I'd like to see a little bit more of that multi-agency stakeholder involvement all the way through the process, and continuing through the process, not just at that crisis point in the situation. So, yes, it's definitely something we need to pick up on and develop as we go forward.

Okay.

Can I just—?

Sure, yes.

Because we run applications on behalf of housing associations across Wales, we have seen in our correspondence with planning officers, they've started to now say that they are having meetings internally about social housing projects. I don't know what that means or what it's called. Again, that's more from behind the glass, so to speak, from our point of view. But I can see that something has gone on since the taskforce, where they've implemented some form of new meeting to talk about the list of social housing applications. It might be because we're coming closer to the financial year end and there's grant funding, but I think that momentum is quite good.

There are a couple of recommendations that have already been implemented, like the planning fee has been increased. Hopefully, that's been ring-fenced and allocated towards the resource, because that's what we all raised last year, that the resource was critically low. But you can see there are more job applications and advertisements for planning officers, et cetera, which is good.

So, I can see that there has been movement, but I think, as you say, monitoring and publishing where they are versus what the recommendation is would be just useful. It would give you that sense that it is progressing.

It would provide a bit of clarity and transparency, really, wouldn't it? And then that aids accountability. Fiona, you wanted to come back.

Yes, I think more broadly, building on that as well, is the role of councils more generally. So it's more the mainstreaming of planning, because planning, historically, in some local authorities, is sat almost separately to the corporate function. So, it's building into the corporate understanding of planning and what planning actually does, and the role it has across councils. If you look at things like corporate plans, you often see 'housing' and 'housing crisis' mentioned; you don't often see it mentioned in the same paragraph as planning. So, I think it's just aligning your services internally. I think that's what's started to happen in places where maybe it wasn't previously. It's just building that corporate understanding, and that's where planning fee increases start to see the impact, and councils start to have that corporate understanding of keeping those fees within planning, because although that was the intention, it isn't necessarily the case in all local authorities that that's happening. It's seen as, 'There's more money', and it's being directed elsewhere. But I think if the understanding is broadened out a little bit more, then that money will be kept and redirected and invested in the planning service as a whole.

I think there is a—pardon me—a cultural shift, as you alluded to, where a good planner maybe knows the regulation that they're dealing with and can preside over developments, but a really good planner enables those developments as well. That's coming through the Royal Town Planning Institute, through the Planning Officers Society and the networks. Because we're a devolved nation, we know each other, we talk to each other more. So, I think there is a lot more positive traction in terms of the clear agenda to deliver more homes, more affordable homes at scale and pace within the nation. So, I think, as a representative of the planning profession, that is increasingly relevant and well-known to officers, without a doubt.

It's good to hear that, Simon, and that sort of enabling role and really good communication and engagement between those wanting to develop and those in the planning department is crucial, isn't it? But we'll be coming on to planning matters later.

Just to very quickly add to that, and it comes on to some of the questions that were highlighted that you may ask, it's around the complexity of planning now. And we're talking there about planners talking to housing people, but it's also that you need the highway people, you need the landscape people, you need the sustainable urban drainage systems approval body teams, you need the ecologist, and that list of professionals that you need to engage in the planning application all the way through the process is growing and growing as a result of the changes in policy that we're seeing. So, yes, local authorities are trying to bring those. It's the team approach, having a project manager and dealing with it as a project management approach, and getting everybody together. But it is hard to do that because of the complexity and the number of people involved.

Yes. Well, I wanted to come on to talk about policy goals, really, Welsh Government policy goals, and to what extent Welsh Government—. As you mentioned, Fiona, it's always important, isn't it, at a local authority level, at the Welsh Government level, to work across departments, but it's also very, very difficult to do that effectively. So, in terms of housing and affordable housing, social housing supply, how lined up is Welsh Government in terms of its policy goals? Are there still some policy goals that are working against the progress that we need to see? Who would like to—?

The short answer is 'yes', there are, and there probably will be, but there are so many angles to pull from because of the policies. You need to build high-quality housing. We need to also, obviously, look after biodiversity. We need to look after the surface water impact as well as the highway impact, whilst balancing sustainability. You want more sustainability, but we still want one car per room. There are so many pulls that it would be complex to talk it through.

I suppose the key one I wanted to raise today, if I could say anything, is that there are the planning policies pulling, which are set by Welsh Government, and biodiversity was a key one that came in with immediate effect, which stalled many sites already in the system. There was no lead-in period for it. That was quite difficult. It’s the same now with nitrates. It has come in with immediate effect, it's stalling stuff, with no lead-in time. But the key one is, there's planning and there's also viability. As we all know, the delivery of social housing in Wales is predominantly funded by the social housing grant, and to get a social housing grant, there are various policies in that that determine how much grant the housing association or local authority gets—that the recipient gets. One of those policies is the modern methods of construction uplift, or the energy performance certificate uplift. You get an extra 10 per cent grant—. I'm simplifying here, but there is a policy driver for MMC. But for some sites—. The cost of construction has exploded across Wales. It costs more to build now in Wales than the house values in most areas. Because we have to build on predominantly brownfield land—to get to my point quickly—you have a policy for increased grant funding if it's modern methods of construction compliant, but that might not necessarily be the best for that particular site, and it's still very expensive and complex to build, and there's still a social housing waiting list in that area. That's just one, but I don't want to hog the table. I could go through 10. So, I'll pass on.

No, it's a good point, because there can be a general policy, but there have to be exceptions, really, don't there—an allowance for those exceptions and different circumstances.

I think, to pick up on that comment, you're right. We often write policy well-intended, necessary, almost essential in terms of declared climate change and nature emergencies and everything else, absolutely, and Wales is probably at the forefront of that, particularly in terms of surface water drainage. However, I am often quoted as saying that a lot of the people we consult, all these experts, are naturally precautionary because of that; their role is to protect the environment, not necessarily to facilitate development. A planner then has to be more permissive maybe, a bit more pragmatic in balancing those often competing priorities through policy. And that's where maybe there should be more focus on the primacy of the ask here, which is to deliver affordable homes, so that then my officers have a clear understanding that that planning balance is weighted heavily towards the delivery of those schemes through national policy. I think that would help. Clear lines help people make consistent decision making.

Yes, and that clarity isn't there in that way at the moment, Simon.

I think it's a challenge for a modern town planner in Wales to understand that, yes.

Yes, okay. Does anybody want to add anything to that? Yes, Fiona.

Just a little bit more about the complexity of the policy landscape in Wales. Wales has 3.2 million people, 22 local authorities, 25 local planning authorities, three national parks, maybe four. It's really complicated. We've got four regions for one thing, we've got three regions for something else. We've got seven health boards, three fire authorities. It's just a very, very complex landscape. Trying to deal with policy within that from the get-go is really, really complex, and then you add in all the different factors and themes, like ecology, planning, house building, and then you come upon a crisis, like the housing crisis, and it's, 'Where does that fit within that wider policy landscape?' It's very complex.

Yes, sure. Yes, Mark, and then I'll bring you in, Peter.

I'm a planner by background, so I'm going to, I guess, always end up talking about planning. I guess, added to that, we work within a plan-led system. In that small nation we've just described, we've got a national plan. We should have a strategic development plan, but they've only just got going. We should also have up-to-date adopted local plans, but we're really struggling with those. Those are the plans that should be guiding development and actually allocating land for development. If you haven't got the land there, that's your starting point. If you haven't got the land, then you're never going to deliver, regardless of all the other constraints, and we are really struggling with that in Wales at the moment.

Okay. Peter.

Whilst there's a well-meaning in Government to strive, to push forward for more affordable housing, perhaps that leadership needs to be a lot clearer. They've got a contradiction of policies within portfolio; they aspire to try to do their bit, but they're conflicting with each other. Whereas if leadership was clearer, if the next Government is very clear about what it expects you to do within those various biodiversity or whatever, sustainability, there could be a far smoother transition, and that would be something you would wish, because it looks like, at the moment, whilst there are lots of laudable expectations, they actually hold up the process of delivering what the Government wants to do. Is that a fair assumption?

I think, again, the short answer is 'yes', but there are always unintended consequences with—. You get unintended consequences with broadness, and you get unintended consequences with prescriptiveness. It is quite a bit more complex than that. But you are right, for example with biodiversity, we're all in agreement that biodiversity is very important, but we're also in agreement that housing is in a crisis, and there are only certain areas where you can build housing, which are set out by plans. You can't just build anywhere. But it's subjective. The biodiversity is quite subjective, it's not, you know, 'This is—'. It's down to consultation and whether they feel like it's providing a benefit. It's not a straightforward science. As a developer or somebody trying to bring something through, the more prescriptive it could be, in a more checklist format, the easier it is to identify sites to check the viability before investing significant resource. Because it is very expensive to take such things through the system, with all the reports et cetera.

The short answer is 'yes'—the more prescriptive guidance of what is acceptable, what is the priority. It's kind of like you've got the step-wise approach for the biodiversity. When that first came out, it wasn't being followed, in my opinion, properly. I think, like everything, it has a bit of time to get into place, and maybe that's just what they accept it is. But guidance like that: 'In what areas is housing required?', 'What is the overarching focus, objective, priority?, 'What does it mean to be a net benefit?' Am I making sense?

I would add a really good example of that is what's happened with nitrates. We had phosphates initially. We sort of felt like we'd recovered from the phosphate issue, although that hasn't actually gone away, and then suddenly nitrates landed, and we've got 2,000 to 3,000 homes, and several thousand of those are affordable homes, held up in west Wales.

We know there are lots of conversations going on with the Deputy Minister in his portfolio with the agricultural sector, and the agricultural sector is recognised as one of the biggest polluters of the rivers,but none of those conversations are happening with the planning and housing people as well. We don't know what solutions are being brought and the changes being made there, and we're trying to tell them what we need—. I think that's a really good current example.

Yes, that's good. Thank you.

I'm hoping we can come back to these matters shortly, but just before we do, I just wanted to ask you about our recommendation for a national development corporation. There seems to be strong support for this in terms of how we identify and assemble large-scale land for affordable housing development and social housing supply. How significant do you think that recommendation is? Are you supportive of it? How much of a game changer is it likely to be, do you think?

In my opinion, like with everything, you should never develop something where there's a single point of failure. It could play a part, but what we can't forget is that the current resource and key stakeholders in the sector are really trying. I'm here to fly the flag of small and medium-sized enterprises, and SMEs shouldn't be forgotten. They really contribute towards social housing delivery, affordable housing delivery. The SME contractors are really the core, once you move past the land and the permission. Without SME contractors, you won't build to target, especially on value for money. They really get forgotten and looked over, and I'm here today to—. Whilst it could potentially play a part, especially with public sector land et cetera—if it's working hand in hand with Welsh Government, I think it definitely could play a part—it shouldn't be a single point of failure. It shouldn't override and remove or restrict the others, especially the SMEs in the marketplace who are really trying. We should hopefully talk about that in the future as well.

Yes, okay, Dorian. Thank you very much.

My perspective, Chair—'I don't know' is the answer. It's not because I haven't thought about it, it's because I genuinely think that it needs a lot more consideration. The risk is quite significant in having a national corporation in terms of the impact on private sector house builders, local authority house building programmes, land ownership across Wales. It could really skew what might otherwise be a better process. I'm really conflicted in answering this question, personally, without more evidence on what that corporation would do, what would be the remit of it, and what level of engagement there would be with landowners and developers, as well as local authorities. It's a really challenging question to answer in this forum, Chair.

It's true. Although, of course, there's the English example and the English approach. I don't know if any of you have got any views on how well it's working—how that approach is working in England?

I think there are good-practice examples there. I think Wales is different from England, in as much as it's not just necessarily about having an organisation that can facilitate land acquisition and deliver development. That is a positive, but it's how that would work within the context of a Welsh Government where resources have to play a part in that. We've seen situations where we've nationalised a lot of our infrastructure delivery, through Transport for Wales and other organisations—doing fantastic work, by the way, and releasing a lot of funding into the infrastructure delivery. That sentiment is encouraged by all, I'm sure. However, the consequence of that is often that good talent is moving around between these organisations in Wales. So, I don't think we should lose sight of the revenue and staffing implications of a national development corporation.

I think also there's a lot of good work being done in terms of land appropriation across local authorities to facilitate their own housing programmes, as well as working with registered social landlords and private developers. I think we should accelerate that as well, where vacant or underutilised land in areas in communities could be utilised by either the corporation or by other mechanisms. So, I think there's a lot to be said in a unified Wales looking at the problem holistically. There may be economies of scale between neighbouring authorities, regions, in delivery, but whether that extends to creating another organisation, I'm not sure, Chair, to be honest.

No. Okay, Simon. That's very useful, thanks. Mark.

All I would add is, a bit like Simon, I'm probably sitting on the fence in all honesty. The devil is in the detail. It's easy to say that, but I think what I would say is I think there is a risk that a lot of—. It's existed in Wales before, and a lot of the people involved with it are still in Wales and still in the system, and I think if we're going to do it, we need a fresh start. We don't need to just go, 'Okay, we'll start doing what we used to do', because the market has changed, the whole system has changed.

You mentioned the English model. It's interesting that it started very much focused on the private sector. The Government colours changed in England, and it's clearly refocused on affordable housing. My fear would be, if it was set up now under the current Government, it would be wholly focused on affordable housing and probably not help the private sector, and the private sector does help deliver a large number of affordable homes. Scotland have just announced their own system as well, so we've got another model that we could look at. But I think what would be important, if we did it, would be to really take a step back with a fresh set of eyes and start right from the bottom, rather than just putting together bits of what used to happen.

Yes. Okay. Thank you very much, Mark.

I think I'd just to agree with Mark completely. It's nice that a local authority planner agrees with the house builders federation. We've got a different dynamic now than we had previously with the WDA and the land authority, in as much as we've got mandated regions as well, and the funding stream into those organisations is very different post Brexit as well. So, I just think it needs that kind of contemplative approach for now, in terms of how is it going to be resourced. It's not just about appropriating or utilising existing land assets, it's about who do you sell them to, who builds, what partnership arrangements do you set up. And I think that where the magic happens often is in the public-private partnership approach to housing delivery, where viability becomes maybe slightly less risky for individual developers. Whether that could be co-ordinated on a national, regional or local level is not in my locus, really.

Yes, fully in agreement with that as well. If there are underutilised assets and it's deemed that an efficient way to drive more social and affordable housing through public assets, land et cetera and other resources is through a national body, provided that in the details there's scope for SMEs to still help get involved and have an opportunity, then that could only be a good thing.

Yes, thank you, Dorian. Fiona, is there any WLGA view? Would you prefer the local authorities to get on with it?

I think I might join my colleagues on the fence here. [Laughter.] It's very difficult to see how it would fit within the existing system without all the conflict and things that you've got, as have been alluded to—things like resources and the complexity of how it is now and how would that fit in the planning system, and the planning system is still the planning system. With the best will in the world, it's not necessarily going to expediate house building to have an organisation—. It might expediate the acquisition of land, but you're still going to deal with the same processes when it gets to the planning stage, so it's not necessarily a magic bullet, I guess. But, yes, on the fence a little bit—[Inaudible.]—work.

Yes, okay. Peter.

This is a really interesting conversation. Obviously, talking about some planning issues, we know that the taskforce, for instance, has called on local authorities to prioritise planning applications of new affordable houses. Now, in my mind, as a past council leader, I'm thinking that it's great that the aspiration is coming forward, but if I'm in the middle of doing a local development plan, or a revised LDP with all the regs around that, how flexible can that LDP and that planning system be to accommodate a new change in direction? Because in my experience, LDPs are pretty prescriptive—what's going to happen. And, of course, they usually identify all the candidate sites for housing going forward, so you've got this one major opportunity to sort things out, and there's going to be a mismatch between—. The aspiration of the Government, or the desire for all of us to build more houses is going to be frustrated if an LDP isn't up for renewal or whatever. So, are we seeing signs that local authorities are managing to become flexible enough or to alter their thinking, or making their LDPs, if they're being revised—? Are they enabling or facilitating more of the delivery of a planning system that prioritises that affordable housing?

I mean, the LDP, at its highest level, allocates land for housing; traditionally, it wouldn't specify what type of housing. There would be a level of affordable housing that would be achieved through a percentage requirement for every private house builder site, and we are seeing that percentage increase, so the Vale of Glamorgan plan that's just gone on deposit—sorry, Monmouth are due to go—[Inaudible.] Every allocated site has to provide 50 per cent affordable, whereas with the previous planning, it was ranging between 30 per cent and 40 per cent.

The problem with the LDPs is that they're not flexible. I mean Simon will hopefully support me again on this one, but the system isn't flexible and it takes far too long. The Monmouth plan—it's taken seven years, and that was a plan that was being driven by officers and a reasonable level of team there. The worst example, obviously, is Wrexham, where, after 15 years, they managed to have a plan for a week and then it was unadopted. So, yes, the biggest call we would make is, you know, we did have a system in technical advice note 1 that allowed for flexibility, so where a plan was failing, where a plan wasn't up to date, there was an opportunity to bring land forward. There was a feeling at the time that it meant that anything could be built anywhere. We would welcome a conversation around a new TAN 1, but far more constrained, so sites would have to meet all the policy requirements, they'd have to be sustainable, they'd have to deliver affordable, they'd have to be—the easiest comment here—the right homes in the right place. But that's the only way we can really introduce a quick system to deliver homes quickly.

Simon, are you seeing that local authorities—are they managing to prioritise more? Have the taskforce recommendations impacted on local authorities?

I think across Wales there are different views in different localities. I'm very happy to talk about my own local authority in that regard if it helps, but I sense from the wider area in Wales that there is a desire to deliver. But let's not forget here that large-scale housing developments in communities can often be quite controversial and generate significant objection. Those objections are increasingly well resourced and apply our own policies very well. So, there is inertia often in bringing forward these sites because of genuine policy concerns.

However, I think, from my perspective, in Cardiff, we're more advanced with our development plan, where we have got a very healthy supply of land for new housing development in the city. The model then becomes how we ensure that those sites are actually delivered on time within the planned period as opposed to wider conversations around development viability or policy constraints? So, Cardiff is very different to most other parts of Wales in that regard.

I think that there's a distinction between—. We've said earlier that there has to be a coverage of adopted plans. That's the bedrock of the decision-making process, and we are moving towards that in Wales. We've got unitary authorities. We've got an advantage over England, certainly, in that regard. But then it comes down to the individual negotiations, discussions, early engagement with the community as well as with the developer to ensure that there is more certainty and, therefore, more viability in the development itself. That, maybe, could happen more, because we are very busy, we are under-resourced and quite often a developer has their own expertise where they know what we're going to say. So, I think that the policy could be a little bit more prescriptive, perhaps, in terms of the mechanisms of delivering development rather than the principle of development.

Within the WLGA, then, Fiona, is there wider feedback from local authorities or is there a united approach, that, 'This is what we are going to do'? My past experience is probably there are lots of different positions.

Yes, there's not a consensus on it, and I think you've got to start looking at some of the environmental factors in terms of rural Wales as well, and the ability to host large-scale developments in certain parts of Wales makes it a little bit more challenging in terms of those allocations for affordable housing. It just makes it a more difficult offer. So, I think there isn't a consensus across Wales, and I think Cardiff's position is very, very different, but Cardiff is very different to the rest of Wales as well.

Thanks. If I move on a little bit and look at capacity, we know that the Welsh Government is implementing a programme of work aimed at tackling capacity in the planning system, including fees, and, Dorian, you mentioned that earlier. What are your views on the approach the Government is taking on planning fees and do you think that approach will increase the capacity that's needed?

Well, when we engaged with the affordable housing taskforce, it was a point that we raised last year as well, that developers would welcome an increase in the planning fee, provided that it would unlock extra resource for the planning authority and to help with not just local planners but the consultations as well, the consultees within the authority that also need to make a decision, because that's where there was a lot of hold-up. It wasn't necessarily just planning officers. Most of the time it wasn't; it was the key consultees behind them, but they couldn't make a decision until they had a response and various things.

So, that's come into place. The fee has increased by nearly 50 per cent, I believe, and we welcomed it. There wasn't significant kickback from it or backlash to it. We were pushing for it. I don't know, in terms of the actual policy—I've not done a freedom of information request to check—whether it has been ring-fenced for planning, but the intention, definitely when it was discussed, was that it should have been and it was, and it was purely to help that. I don't know if it has, but the intention was there and it was welcomed by everybody.

We can perhaps find out if it's been ring-fenced at some point. Thanks for that.

Looking at statutory consultees, what progress has been made in expediting the statutory consultee process? Were there shortcomings before that are now being overcome?

An example of something that has happened, for instance, and I don't know the detail, is I believe the Welsh Government have funded additional posts within NRW. It was something that they specifically did. I'm not aware of anything else specifically.

I think the problem is that there are two types of consultees. There are the ones within the local authority, and that's about that team approach and pulling the departments together. But then there are the external consultees as well, which, obviously, are slightly harder for the Welsh Government to influence.

Yes.

If I may, Chair, it's a really challenging question to answer. It's very easy to point the finger and say, 'The blockage in the system in terms of consenting is with x or y. It's the planners' fault; they take too long', or, 'It's the developers' fault; they put in applications that aren't right', or, 'It's the consultees' fault because they take too long to respond, and they're quite nuanced when they do.' All of those things are true, committee, in different cases. So, I feel that the benefit comes from relationships, again, in Wales. I'll keep going on about it, but we are quite a small nation and we tend to stay here because we like it, because it's great. So, there is really good interrelationship working between organisations, statutory consultees—familiarity is there. So, that's the starting point.

I think then we look at a systems approach to it: is their method of engaging and is their language correct, is the way that they go to an individual expert in their organisations—not just NRW, but across the piece; Cadw perhaps, and maybe another one—and then it becomes quite entrenched in terms of the conversation, where, again, as I said before, their role is to defend their expertise, not necessarily to make a pragmatic decision. So, it's about recognising that the consultee's role is not the decision maker. And if we can break that barrier down, I think we can get some traction in terms of progressing these processes.

Can I add something, unless you want to go first, Fiona? There are two things. One is—I completely agree with Simon—that all of those cases, with different applications, different local authorities, are true, and it's very hard to say, because it isn't—. Even recently, with a local authority—we obviously won't name them—we couldn't submit a SAB application—it sits outside of planning—because they had nobody in their department to take the fee to validate it for a whole month. That's a site for social housing that was in this year's delivery and which is now in next year's, purely because—well, I say 'purely'; I'm simplifying it—. That was a key reason, and there's nothing we could have done about that, but that's a separate discussion.

What I do want to raise though, which I think is important, is, in today's world, I think we just all need to be realistic with the actual timescale to get planning, regardless of the changes. The process isn't an eight-week planning application. The process is this: an initial pre-application, then a second pre-app, which you're encouraged to do, otherwise your application might be declined at planning. Both of those can take two to three months each, but more like three to four months each. Then you've got, in most cases, a pre-application consultation, which is the public consultation. It's a month's process, before you submit an application. So, you're already seven months in, which nobody sees. Then you're at the planning application, which might, if you're lucky, take eight weeks, but most of the time it takes four months, and, to be honest, four months most people could live with. After the planning application, you've then got committee most of the time, especially with social and affordable housing, because they always get public backlash, they're always contentious and they always get called in to committee. Again, I'm oversimplifying here. Then you might need a site visit, and that's a two-month process. After you've finally, hopefully, got consent at committee, you only then can start the 106 process, which in itself can take months. Drafting a section 106, which I raised in the affordable housing taskforce and last year, still can take months—and it's a document; there's no standardisation of it—even for small schemes.

After the section 106 is finally drafted and signed, only then is the decision notice released, and after the decision notice is released, you've got a six-week judicial review period, and no-one will really do anything until that period lapses. And whilst that's lapsing, you can only then start discharging your pre-commencement conditions, under which you legally cannot start construction until they're discharged. So, all in all, we are not talking about an eight-week timescale, which a lot of people do and refer to. The system is set up, at the moment, for planning to take, from start to finish, more like a year and a half. That is it.

I think it's really helpful to actually describe that, Dorian, because it's a reality check for the system, absolutely.

If I could just come back on the relationship with consultees. I recently attended a Newport developer forum. They've decided to set up a development forum, and there were a couple of private house builders there, me, and housing associations. And one of the things we all agreed on was this inability to speak to people face to face. I think we all know those situations where we've entered into an e-mail conversation, which we think will be sorted with a simple, quick e-mail, and you think, 'That's getting it off my desk', then, 10 e-mails later, you're still trying to get to the bottom of what you were talking about, whereas, actually, if you'd just rung the person up and had a conversation with them, or, even better, gone in and got a plan out on the table with a red pen and did some scribbling, you would have got it resolved a lot quicker. So, I think that would be something that would be really good to see. And I think we've all become used to thinking, 'You send an e-mail, it's sorted'.

Yes, that would be helpful. I'll move on to something that has come up—Mark, you raised it—a couple of times, and I can absolutely see it. I know that the phosphate issue is a big issue and I know it is still bubbling, but you've found ways to move forward with it. But, on the nitrate issue, which is now coming forward as that additional barrier to development, what needs to happen? What do you believe has to happen to move forward on that basis, as you've managed to find a way through the phosphate side of things?

I mean, the phosphate solution isn't a permanent solution. We are now seeing Monmouth's local development plan being held up with questions over whether or not it is the right solution. Nitrates can't be dealt with—or they're much harder to deal with—in the same way. It is a really difficult one, because, in terms of taking a step back and thinking of the wider environment, a strategic solution is the best solution for everybody. But strategic solutions take time to deliver. There are very quick wins out there. I think, at the moment, the focus is too much on the strategic longer term, doing it right, rather than going, 'Actually, housing is, really, very important and we just need to come up with a quick solution, albeit not a permanent solution, but it will do for now so that we can get those houses built.'

We didn't see much pragmatism in NRW with phosphates at the start. What we need to see is some pragmatism. If this is a real priority for the Government, there needs to be, whilst that bigger strategic conversation is being had, some discretion and pragmatism to enable development to continue. Is that fair?

Yes. And some of those conversations are happening, but they seem to be taking a long time. And, obviously, the worry is now, as we run up to election time, that we're going to lose three or four months where, potentially, those decisions are not going to be able to be made.

I get that.

I think—sorry, Fiona, I'll forget otherwise—what's happened is that there's been some fairly clear political messaging around nitrates in particular and what's expected. And there has been work, as we said, across various organisations and industries, but there doesn't seem to be that move from strategic direction through into implementation at a national level now through your officials. That's, I think, one of the missing links, I have been told by colleagues, and it absolutely requires a multi-agency approach, as Mark alluded to earlier, in terms of engagement beyond just the planning process. So, I think now is the time for some kind of national leadership in this process to give clear direction of travel to local authorities to implement what they are trying to do.

That is very much what I was thinking of. The leadership has been lacking from that national perspective and it feels like those affected most by nitrates are being left a little bit to look at the solutions and develop handbooks and guidebooks and invest quite a lot of money and officer time in looking at solutions for their areas, whereas it's a national issue and the national leadership isn't necessarily there, where it should be. I think there are definitely opportunities in this space. I think the water summit, which Mark alluded to earlier, was a really good opportunity. We had all the agricultural sector there with the Deputy First Minister, and I do not think anybody from planning or housing were invited. So, I think there are opportunities to get people together in that multisectoral space for those discussions, but we maybe missed out a couple of times.

Thanks for that. The last question from me, Chair, is just around the viability of renegotiation. We know that there's a new report by Dr Edward Shepherd of Cardiff University. He's called for a number of changes to reduce the scope for viability renegotiations at the planning application level. One recommendation is for better national viability guidance to be produced as a technical advice note. I just wonder, have you reviewed the report? Have you had a chance to and, if so, do you agree with what might be being said?

I've looked at the report, but it's very difficult, because Wales is challenging to build in. We build social and affordable housing 100 per cent, and even then those sites are sometimes unviable to deliver, because the push and focus is on brownfield, which we're all for, regeneration, but it is very expensive. We've had to have meetings with the Welsh Government on viability because of the abnormal costs to deliver brownfield sites. I'm all for transparency and I'm all for developers making an acceptable profit margin, because it is a very risky business. There is a lack of funding support because of the risks of this sector. I'm also all for contributions and affordable housing contributions, it all needs to work, but there just needs to be some acknowledgement that every site is different, abnormals are real, it's very expensive. And as long as that gets treated as such—. Otherwise, it will just stop delivery.

I think that it is an interesting point about the risk associated with the business and house building. In theory, in a plan-led system, that should remove most of the risk, but there are current examples of allocated sites that have been refused at committee, based on the principle of development, even—even though it's gone through five or six years of getting that site allocated. I was involved with the writing of that report in that I attended some of the workshops. Some of the recommendations are easy recommendations to make and it's easy to be critical of the system.

Part of the problem is the delay in planning at the moment. Although the front-loading of the LDP systems means you submit a lot of evidence upfront about viability, when you own a piece of greenfield you can only do so much in terms of viability. But when you then have to wait seven years before the plan gets adopted and then another two years before you get your planning permission, viability is going to have changed.

We didn't expect material prices to treble overnight, but they did. Based on a war in another country, suddenly our materials are three times more expensive. So that is a problem with viability. From a private developer point of view, we do pay a significant amount in section 106. We deliver an element of affordable housing, we often build on the bigger sites, we build new schools, we provide highway infrastructure. The list is ever-growing of the things we build, so you can always say, 'Should there be more?', but it will reach a breaking point if you push it too far.

I endorse that. I think that the report is well written, well intended, and there are many recommendations in there that I think are good practice. I don't think that one shoe fits all here, because development typologies are different, locations are different and viability is different. The point I'd like to make on behalf of planning officers is that we are not experts in development viability, nor do I want us to be. I want us to be sensitive to the commercial impediment of the house builder and the need for a viable development, otherwise it won't get built, yes, but from my experience, having discussed this and worked on this for 30 years, there's a need to have some independence to the process where verification of developers' costs is done by an expert.

I am quite concerned that planning officers are asked to be experts in drainage, in ecology, in highways infrastructure, in all of this stuff, and viability is another one that we should know about but we shouldn't be experts in, absolutely. My authority always seeks independent verification of viability evidence. We often use the district valuer or we use a third-party valuer, and I think that process works well if you draw a line under it. You only get one go to tell us what costs you've got and we'll have one go at verifying it for you. I think this process can be protracted and delay otherwise appropriate development, so I think it needs a bit of filtering in terms of which recommendations would benefit all authorities and which might not.

Thank you. Thank you, Chair.

Thank you, Peter. Joel James.

Thank you, Chair. Thanks ever so much for coming in today. I've got a bit of an apology. I'm a bit congested, and I knew if I didn't come in this committee wouldn't happen, I don't think, so I had to try to push through the pain, as they say, to come in. We've talked a lot about site viability, and I just wanted to get an idea of—you mentioned funding as well—where finance comes into it. Because obviously, as you've highlighted, Dorian, the planning process is a lot longer than that initial eight weeks, and all those costs are met by the developer before there's even any opportunity to get funding, which only really comes once planning permission has been granted, and that's quite some time down the line. I know the affordable housing taskforce made some recommendations to try and help with that. I just wanted to know how effective they've been.

That's what I referenced earlier; it was one of the medium-term types of recommendations. But you are absolutely correct. Funding planning is unfundable. You have to fund it from your own resources. There's no facility, really, for it. For us, because we have the data, on average it costs about £5,000 per unit, per home, per plot—however you want to describe it—to get through the planning process. That is just an average. So, if it's a 30-home site, it will cost up to £150,000 to get it through the system. That's from our data, and we've done dozens. It could be different for others.

That's what we work to as a business. When we look at our pipeline and how many homes we want to build, we have a target of building 300 social homes across Wales with our partners. We fund all of that. We are in conversations with housing associations and local authorities on whether they'll share. Sometimes, they'll look to pay half with us, or sometimes all of it, if they can exchange on the land. But 90 per cent of everything we do is self-funded. That's very difficult to do as a business, especially when you encounter delays. It obviously absorbs cash. And it's unfundable in the market.

When you do that type of funding and you go then to raise business funding—. And that's the one key thing I really want to talk about. There's developer funding, but then there's also, which is equally important in this sector, funding for contractors. Funding for contractors is absolutely dismal and is really not supported in the sector. It really, really should be. It's classed as a risky sector, being a contractor, especially in social housing.

Even the Development Bank of Wales's equity arm, FW Capital, e-mailed me specifically and said they do not support social housing. Development Bank of Wales are very difficult to get funding from. I know that first-hand. We've not been able to. We've asked several times. I even complained to them, and I'm happy to put it on camera. I've had to get funding from England to build social housing in Wales because it's deemed too risky in Wales. But we can probably talk about that separately.

So, sorry I didn't answer your question directly. I went off on a tangent there. But to answer your question directly, yes, there is very limited support. It's a medium-term recommendation. Hopefully it will—.

You mentioned there the—. Sorry, I've got to turn that off because the microphone puts it back into my hearing aid, so I just hear my voice, which isn't very good at the moment. You mentioned there the Development Bank of Wales. Obviously, one of the committee recommendations in the past, and also with the affordable housing taskforce, was for them to take a greater role in providing finance for social housing. So, basically, from your experience, that just hasn't happened at all.

There are two paths of funding: development funding and contractor funding. We've worked with Development Bank of Wales, or we've tried to, on development funding. As I've said, in Wales, for a development funder to fund a deal, to fund a development, which all development funders do—and the Development Bank of Wales as well—they'll come to site and they'll value it. But the problem you have in Wales now is that most areas are unviable, because it costs more to build social housing than what they look at, which is comparable market value. But the standards are different. We build to Welsh development quality requirements, we build to EPC A, we build much larger homes, so great standards, but it prohibits funding.

In the last couple of evidence sessions, and it's something that I've taken when I've met with stakeholders as well, they said that the Welsh Government is too focused on trying to deliver a gold standard, rather than a good standard, if that makes sense.

Yes, they are. Their standard is gold. I would be proud to live in any social home we build. The standard is fantastic. However, when a bank—the Development Bank of Wales—looks to fund it, they will look at market comparables, and if we say it's £300,000 a home, which it pretty much is for social housing nowadays, but you're building in an area where homes are £200,000, they'll say, 'We can't give you funding based on that', or 'What happens if it falls through?' So, that's when you revert to package deals. Sorry to hog this space, but this is what happens. The housing association buys the land off you, and they give you a build contract to build it for them. Then, you need contractor funding, because you're on retentions—it's a low-margin sector, they hold money back off you, and you have to fund costs upfront, like advanced costs. There's the push for modern methods of construction—we have to pay for timber frames or structural insulated panels upfront. It's not a given that they will fund that for you on a vesting certificate. Statutory undertakings—we have to pay them upfront. Dŵr Cymru—upfront.

Has there been any thought given—? Because I think there was something in England, where, especially when there was the collapse of Carillion and everything, a lot of people who were in the chain then—all the small SMEs—went under as well because they were owed money. Has there been any scope looking at whether or not developers or people in that chain can have that money guaranteed, that they'll have that money then?

They tried it with project bank accounts. We're effectively a main contractor as well, and we've experienced high inflation and fixed price contractors. We've delivered social housing at losses, and we could not have got through without the support of our supply chain, and I'm very grateful for them. At that time, there was an inquiry about bringing in project bank accounts, specifically to try to stop it collapsing. However, project bank accounts are just not set up for loss-making projects. If a project goes into loss, in unforeseen circumstances—. The social housing sector that we're all talking about right now is all operated on a fixed price, all-risk contract to the main contractor. There's absolutely no flexibility if anything goes wrong, because everything gets crystallised—the build cost, the grant rate. If anything moves—unforeseen statutory undertakings, which has happened to us, sites, anything—. So, the contractor takes all the risk. If it goes into a loss, project bank accounts don't work, because they send the money into the bank, but there's not enough to send it to the supply chain. So, what happens? You end up in a robbing Peter to pay Paul scenario, and you either get out of that or it all collapses. That's exactly what you've seen.

Does anyone else have anything to add?

I think there have been some conversations going on with the Development Bank of Wales. There's clearly an opportunity there. Certainly, I think one of the recommendations was around bonds. They're a very expensive element of money that you've got to pay out, which sits there for long periods of time, and you don't get back.

I suppose the other way to look at this is—coming back to that development corporation, maybe—that a lot of those upfront costs could be borne by someone else, arguably. If, for instance, a local authority were bringing forward a piece of land, they finance all the reports that are needed to be done, so it's not the developer paying out for all those reports. You often see land coming to the market with a red line around it, and they just say, 'Go away and do your stuff', and you take all the responsibility, all the costs. And even when you contact them and go, 'Well, you hold half the information', they're not really that helpful in getting the information.

There was an attempt to do that for self-build in Wales a few years ago, and, for various reasons, that stalled, and I think the local authorities realised it was quite difficult to do. But that's the alternative method—you either work with banks and funding, or you find a way of bringing land to the market that has a lot of the unknowns dealt with.

If I remember from the last evidence session, in England, they have—. Is it 'Build England' or something? I can't—

Homes England.

Yes, that's it, and that's similar to the development bank. How have you rated the effectiveness there? Because we hear that there are a lot of positives, but there are also a lot of negatives there.

I'll be honest, I haven't dealt with it first-hand. I've seen stuff in the press. As you say, there's some good examples and bad examples. They've changed their approach to things and focused more on affordable housing. But it's clear that they have delivered schemes, without a doubt.

If I've got time, Chair, the next question is on—it's quite esoteric, I suppose—capturing land value. The committee has previously suggested that the Welsh Government look at different ways it can capture land to then fund or provide finance towards social housing projects. At the moment, it seems to be focusing more on what it can get out of section 106 agreements. Do you think the Welsh Government should be looking more at that then, or is there a scope there, that, well, actually, if you're looking at that, say, from a private development point of view, that'll have implications there, then? Because, ultimately, we're not building houses, social or private, in Wales, really, and it's all, really, because of the same reasons.

The advantage of the 106 or the community infrastructure levy system is we've got a system we all understand, we all know. It could work better, it could be more efficient, it could deliver things more quickly, but we all understand the system. I think the Edward Shepherd report accepts that, yes, there is the alternative method where the state takes control of all land. But you've got to go back to the fundamentals of land ownership, and that's a big beast to move. Bearing in mind that a lot of the land that comes forward for larger sites is agricultural land, we know how strong the agricultural sector is to change. They resist any change, in many cases understandably. So, yes, it's an option, but it's going to take a lot of work and I think there'll be a lot of pain. So, I think we're probably better trying to finesse and work better in the system that we've already got.

I suppose my last question—[Interruption.] Sorry, go on.

I don't think it's one shoe fits all either. I think there is nuance within that, where certain localities may benefit from more direct intervention to appropriate land, strategic land as well, so you get more bang for your buck, maybe, where there's otherwise a potential ransom or something. I think that process is there. It does take a long time, though, to appropriate land anywhere.

However, I do feel the same as Mark, in some ways; the opportunity for the market to be working more collaboratively with the state and with the public and with third sector organisations is something that often yields better results, because you remove the risk in terms of a solely commercial proposition, and that can then, in itself, reduce the—. We can gift the land for nothing. Cardiff Council's housing programme is delivering up to 500 homes a year through that public-private partnership, where we de-risk it for the private developer, but then ask for a disproportionate amount of social housing as a consequence of the land ownership asset, and we retain it. So, that works exceptionally well as a delivery model. I see very few, if any, disbenefits in that, in terms of meeting the standards, delivery at pace and identifying the most appropriate sites for development. I think that model can teach us lessons across wider areas where there maybe isn't the latent demand for housing currently.

I suppose that brings me on to my last question, if I can, Chair. So, I know, back in November, the Welsh Government said there's plenty of land in the pipeline to build on. Do you recognise that? Or should they be doing more to bring forward discounted public land, really?

Again, it's understanding what the consequences of that might be to the market. It may conflict with the desire to have blanket coverage of LDP policies. It may also inflate land values in certain areas, which may be a good thing to release the land, but someone's got to pay for it, and it then may actually deny the delivery of otherwise necessary infrastructure. So, it's a really difficult one for me to capture.

So, do you think that there's enough land in the pipeline already then?

I think the policy framework is very clear in Wales, isn't it? It's brownfield beyond greenfield. It's more sustainable locations first. These are all just good, obvious town planning principles really, or human geography principles, if you like. So, I think the policy framework's there to do that. It's often that the hope value of certain sites is increasing the value of land probably beyond its actual value. It's quite a competitive market for good sites. And there are areas that are desperate for more investment in good-quality homes, in good-quality infrastructure, in good-quality land uses, where they are constrained because of the environmental factors we mentioned earlier. So, I think there is opportunity to identify the best and most appropriate land. And I think the local planning system, the regional planning system and the national policy all align with that. It's just that they're catching up with each other a little bit at the moment.

From a private house builders' point of view, my members would say there's not enough land, and how you see that in practice is, if you look at the number of—we call them 'outlets'—the number of sites they're selling houses on, that has significantly reduced in Wales over the years. Now, that's partly because we've seen a trend towards larger sites. So, in Cardiff, that's a really good example of three or four really large sites, and some house builders will have more than one outlet on one site, because they're such big sites they've got a different entrance in different parts.

So, yes. I mean, we've got two sources of land. We've got brownfield land, which runs out at some point, or you start going on about, 'Well, which is the better use? That piece of public open space that isn't particularly well used—would it be better used for housing?' The minute you put an application in for housing, everybody goes, 'Well that's a really important piece of open public space and we use it all the time.' And the LDPs don't often make those decisions, because that's within existing urban areas, so they don't necessarily allocate those sites. And the number of houses that are allocated in plans is a statistical calculation, often based on past trends, and because, again, of the timescales of plans, we often struggle to keep up with when census data comes out, and it comes out in the middle of the plan, at the wrong time in a plan, so—. There is one argument to say, 'Isn't it better to almost overallocate, and have that fall-back position?', so that—. You know, your main site that you think's going to deliver so many houses in a certain period suddenly doesn't—then where do you go for another site? You're scrambling around looking for brownfield sites, which Dorian said are often harder and more expensive; you haven't got the technical advice note 1 process, so you've got to wait for a review of the plan, which is taking five, six, seven years, and it isn't flexible and quick enough.

With TAN 1—. So, I used to be a councillor and, you know, am very familiar with TAN 1, especially with a lot of the housing applications that they tried to get through the joint housing land supply. I've seen it at its worst, I suppose, where environmentally sensitive land was being—. One development, it was a C2 floodplain that they wanted to build on. Welsh Government guidance says you don't build anywhere near that. Yet they're trying again now to get it in the council's local development plan. What do you think could be done, then, to avoid that, if that makes sense?

I mean, in theory, the system is there, because, ultimately, even within a TAN 1 process, you still have to submit a planning application, and that planning application has to comply with all the policy requirements. Ultimately, it was the Planning Inspectorate, in most cases, who were making the decisions, because the local authorities would refuse it, it would go to appeal and it would get allowed. That seemed to come down, generally, to that the inspectors' reading of policy was different to the local authorities' reading. What they tended to do was, ultimately, they did give more weight—. We're seeing in England—we lost TAN 1, and England introduced TAN 1—and we're seeing lots of decisions there where developments are being allowed because they say, 'Well, you haven't got enough houses. Housing is a priority; this site is actually suitable if you look at all the other policies.' So, I suppose it's finding an alternative system where you have greater assurance that the policy framework will be followed. But, again, if your LDP isn't up to date and adopted, you don't have a policy framework in place to follow. So, it all interlinks.

Thank you, Chair.

We've got very little time left, I'm afraid. Perhaps I could just ask two final questions. One is about infrastructure barriers, particularly water and electricity, which have been cited as significant barriers to the development of social homes. How significant are those barriers, and is there anything you would point us towards in terms of potential solutions?

From a delivery perspective, the challenge for us is that, when you bring a new development forward, you can only really get a budget indicator of capacity and of cost. That goes into the viability; it comes back to that. But, really, until you start the site—. That can change, and all of a sudden you can have an area that had capacity that no longer has capacity, or that needs a substation upgrade, or there's a diversion that needs to happen that we've got to contribute towards, and costs explode. So, there's the financial unpredictability, really; it comes back down to that, and it comes back down to the nature of this sector. It's fixed price, and, if it does move, it's all at the main contractor's risk—that is, completely, unless it's carved out beforehand. But from day one of promoting a site through, the unpredictability of the financials and capacity is there, and I don't really know what they can do about that. It always has been there. And then the second point is the service lead times, which are outside of one's control. We've had some sites—. We have one now that's been closed for three months—it's restarted now—purely because of electrical timescales. There's nothing we can do. So, it's very challenging—very challenging.

Okay. Anybody got any potential solutions, perhaps, or not really?

I don't think it's unique to Wales either. I think this is just one of those things, Chair. The way that we are regulated means that connections can take a significant time, beyond planning even. So, I think the only statement I can make is that, you know—. And I think this issue is only going to get worse, particularly in terms of power. Housing is not the only user of electricity, for example. We see in lots of parts of Wales demand for high-energy-use developments—data centres, battery storage. All these areas are taking network capacity away from housing developments. So, I think it's being aware of the issue, to be honest, Chair, and applying due diligence and working between organisations to facilitate development. It's not easy. There is a degree of commercial opportunity here from utility companies to maximise on the fact that there's a new development, that they can upgrade their systems as a consequence of that, rather than using their own funding. So, there's a bit of endemic opportunism here. But, generally, I think we're aware of the situation, and that pre-planning stage is where you would establish what the likely costs would be, I guess.

I think there is—. Sorry, very quickly. I think there is some interaction with policy there as well, though. So, taking electricity, for example, I've just been reading Conwy's deposit plan, and they've got a whole raft of policies in there requiring absolute net-zero-in-operation dwellings. So, they're basically saying every house built in Conwy has got to be electric and no gas or anything like that, which we all know is the right thing to do, but that suddenly has come from nowhere, and now the developers who were working on sites thinking, 'Well, there is electricity supply', now they need three times the electricity supply, so they've got to go and work with—.

And another example is when the sustainable drainage approval bodies came in at brownfield sites. You've got an existing building on the site that's connected to the drainage; it's not unreasonable to think that you've got a drainage connection, build away—'This is going to be a quick one.' But suddenly they go, 'You can't connect to that drain. You've got to find another way of draining', and you've got to start having conversations with highway drainage and other people. So, there is an impact from policy sometimes, where the way you build houses changes and that then has a knock-on effect on the infrastructure you require.

Yes. Okay. Final question from me, on workforce, the construction workforce. We recommended that Welsh Government should develop a construction workforce strategy, which Welsh Government rejected. Do you have a view on whether having that strategy would be useful, and are there any signs of progress in terms of having the workforce that we need?

It would be helpful. I don't know why they rejected it. I think it is absolutely a fundamental requirement to invest in workforce in construction. You see it now, the rising cost of salaries because of the lack of people. There are more jobs than there are people, especially qualified people, to do them. And we see it, we feel it—we're an SME. The national development company, for example, talked about how there are two strands: going out to the market or self-delivery. If you said self-delivery, I would say, in my opinion, don't do it, because you will struggle massively with resource, and most of that is people. And we need to invest in it. Construction and development and this sector need to be put into a spotlight and highlighted right now to the next generations through the schooling system. It really needs to be shown that this is a fundamental and proud profession to be involved in. Back when I was in school, it was: if you aren't a good kid, you could end up in construction. That needs to be flipped on its head. Construction is developing homes for the next generation. You should be proud to do it. I don't know why they rejected it. I disagree. I think they should. It's needed. There's a lack of workforce, and it will just help.

Okay. That's very clear, Dorian. Thank you for that. Are you in general agreement?

Yes, I think that where the strategy will be important is that, when you start to look at skills, there is actually a lot going on—there are a lot of organisations. HBF—we've even got a college partnership programme. We've just recently partnered with Bridgend College, through contact with Persimmon Homes who have got offices down there. So, there's loads going on, but everybody seems to be fighting for the same thing, and it's very fragmented. It does feel like it would be really helpful to have someone leading it all, and pulling it all together, and possibly even make better use of resources.

Yes. Okay.

I think the window is now, b2ecause there's good money in construction employment as well; these are highly skilled jobs these days, and they pay very well. I don't necessarily feel that that message is being articulated loud or often enough. I think there's an opportunity here for collaboration between people who procure contractors as well more, under frameworks perhaps, or looking at opportunities to add more social value into the enterprises by employing local people as a default. It's not something that I would want to see regulated or required, but something that should be lauded as best practice, really, working with local colleges and local companies.

Okay, thank you all very much. I'm sure this committee would very much agree that building is an extremely important industry, in all its aspects, including delivering those homes that matter so much for our people here in Wales—the quality, the affordability, everything that goes with a housing sector that really delivers for people. So, yes, absolutely worth while, very important, and hopefully we'll get that message into our schools and colleges and throughout society, I hope. Okay, thank you all very much for coming in to give evidence. It's very valuable for committee to hear from you. You will be sent a transcript to check for factual accuracy. Diolch yn fawr.