New Towns: the next generation

14 December 2017


The New Towns Act 1981 s1 provides that the Secretary of State may make an order designating an area as the site of a proposed new town if he is satisfied, after consultation with any local authorities who appear to him to be concerned, that it is expedient in the national interest that the area should be developed as a new town by a corporation established under the Act.

S3 goes on to require the Secretary of State to establish a development corporation for each new town after consulting representatives of local residents and businesses, the county or district councils for an area wholly or partly within the site and anyone else he considers appropriate. Unitary authorities and parish councils can expect to be included in such consultations where they have been consulted on the designation itself.

The government sees 10,000 new homes as the threshold to be met for new town status. The consultation paper is unequivocal in saying that "a locally led New Town Development Corporation will only be created where this has the express support of and is requested by all the local authorities, including in two tier areas the county council, covering the area to be designated for the new town." In addition, Government expects the authority or authorities asking for the designation and the locally led New Town Development Corporation "to have a strong evidence base demonstrating that the site or sites are suitable for development at the scale proposed and that appropriate consultation has been undertaken locally." We would normally expect such an evidence base and consultation to have been demonstrated through a review of the local plan.

Development Corporations and their oversight

The Secretary of State may appoint one or more local authorities whose area includes all or part of the new town "to oversee the development of the area as a new town" (s1A(2) of the Act). The draft regulations identify the respective roles of the oversight authority and the development corporation.

The aim of the oversight authority will be to plan for the creation of a high quality settlement which is a sustainable community, to support sustainable development and good design, and to plan from the outset for the long-term stewardship of the assets of the new town for the benefit of the community.

The objects of the development corporation are based on the Act and will be to secure the laying out and development of the new town in accordance with proposals approved by the oversight authority. In pursuing these objects a development corporation must aim to contribute to the achievement of sustainable development and, in particular, have regard to the desirability of good design. The corporation must publish and keep under review a statement setting out its development objectives (including its quality requirements) and how it will ensure the long-term stewardship of the assets of the new town for the benefit of the community.

The draft regulations go on to provide for the transfer of certain functions of the Secretary of State to those authorities. They include the power to give directions, to consent to borrowings (but not in excess of £100m without Treasury consent), to acquire and dispose of land, to approve proposals for development and to make a special development order, but not to grant planning permission itself following an application in that regard. That is the function of the local planning authority, who may happen to be the oversight authority, wearing this hat.

The consultation paper points out that the transfer of functions in relation to planning "requires careful consideration of the relationship between the plans of the New Town Development Corporation and documents adopted as part of the local plans process."

Some oversight functions remain with the Secretary of State such as the power to confirm compulsory purchase orders made by the development corporation.

The oversight authority may approve spending by the development corporation on any functions of any local or statutory authority including on the acquisition of land or the provision of amenities for the new town.

Constitutional arrangements

The oversight authority will appoint all the members of the development corporation, with no more than 11 in total, including at least one member nominated by each local authority appearing to be concerned with the development of the new town (including any local authority which is, or forms part of, the oversight authority). Other members are known as independent members. They must include the chairperson and deputy chairperson and be a majority of the board. In making appointments the oversight authority must have regard to the desirability of appointing:

  • residents or those with special knowledge of the locality; and
  • others with experience of, and who have shown some capacity in, a matter relevant to the development corporation's functions provided they are satisfied that the prospective member has no financial or other interest likely to affect prejudicially the exercise of that person's functions as a member of the board.

It follows that a local authority nominee need not be a councillor and an independent member can be a councillor as long as he or she is not nominated by the local authority.

The functions of the oversight authority may be delegated to a committee or a company where it is the sole member. Where the oversight authority comprises two or more authorities, the functions may be delegated to one of them or a joint committee. The oversight functions are not therefore executive functions allocated to the executive (Leader and Cabinet) but these or separate regulations might make this absolutely clear for the purposes of s9D of the Local Government Act 2000. The obligation to achieve political balance under the Local Government and Housing Act 1989 will therefore apply to oversight committees.

Local authorities will usually have a cabinet member responsible for development and planning. This councillor can also be a member of the planning committee. "Probity in Planning", published by the Local Government Association and the Planning Advisory Service, states that "Leading members of a local authority, who have participated in the development of planning policies and proposals, need not and should not, on that ground and in the interests of the good conduct of business, normally exclude themselves from decision making committees." This advice is consistent with the aim of the Localism Act which seeks to draw separate the personal and private interests of a councillor from those arising from the councillor's wider public life.

Although it therefore appears that a councillor could be both a member of the development corporation and an oversight committee or the planning committee for the new town area, we suggest such an arrangement puts at risk the ability of the oversight authority to appoint the councillor to the board in the first place. The duties of the councillor in discharging his or her roles as a member of the oversight committee and especially the planning committee are potentially in conflict with the duties of a member of the development corporation. They would amount to interests "likely to affect prejudicially the exercise of that person's functions as a member of the board." The best way forward is for local authority members of the development corporation not to sit on the oversight committee or the planning committee. The consultation paper reinforces this point by implication in saying:

"We want and expect.. the New Town Development to have significant operational independence to get on with the job of delivering the new garden city or town, drawing in private sector expertise and partners."


Locally led development corporations will be controlled by a board appointed by local government but financed in part by borrowings which may be Treasury guaranteed and in part by central government revenue grant, or grants for capital projects being roads, paths, bridges and car parks, public open spaces, recreation grounds, playgrounds, landscaping, meeting halls and assembly rooms and similar facilities. The new town itself is likely to be financed by a mixture of public and private finance with a big role for private landowners and housebuilders.

We do not know if the Office for National Statistics will classify locally led development corporations as part of the central or local government public sector. If the former, the chief officer will be the accounting officer for the purposes of Managing Public Money and the corporation will be within the general remit of the Public Accounts Committee. However, the accounts of the corporation are not subject to audit by the Comptroller and Auditor General through the National Audit Office. They are within the local audit regime under the Local Audit and Accountability Act 2014.

We think the classification could usefully be clarified at an early stage. Local leadership and central government accountability are not an easy mixture to resolve.

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