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You get to shake hands with a lot of people in my job. I've noticed recently that an increasing number of hand-shakes are with people who want to get stalled development schemes moving. This is good news because there have been moments over the last three years when the prospect of getting investment in homes and jobs has looked very challenging. We're getting used to the phrase shovel-ready, which is thrown around Whitehall with the kind of abandon shown by people whose familiarity with a shovel could only be described as remote. This is often accompanied by an unspoken implication that if only local government got off its backside and removed some onerous, bureaucratic planning conditions and affordable housing obligations, then queues of enthusiastic bricklayers could be unleashed in an instant. The clumsy attempts of civil servants and ministers to support housing development in recent years have been more reflective of policies around reducing public spending than they have been about encouraging investment. At the heart of the problem is our old friend, the banker. Having precipitated the financial crisis of 2008 by allowing banks to be contaminated with vast numbers of junk mortgages and unsustainable lending policies, the banks have now anchored themselves firmly at the other end of the risk spectrum. Getting housing schemes moving is not simply a matter of re-thinking planning obligations, however. The reality for developers and housebuilders is that the financial industry has retreated from bricks and mortar and is reluctant to back the kind of financial deals that underpinned large-scale housing schemes over many decades. When we launched our lending scheme for local growth businesses in Newark & Sherwood we were surprised by the high proportion of lending propositions in the construction sector. We have now backed quite a few with our money because the plans are good, the jobs are worth having and the council's money is secured. They are the propositions that banks traditionally supported but now will not touch. Unblocking schemes that are investment-ready is a complex job. Councils have the knowledge and relationships to know what can be done and how to do it. Let's hope that government has got the message. Andrew Muter is chief executive of Newark and Sherwood DC

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Bankers are at the heart of the problem

By Andrew Muter | 19 February 2014

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