The Impact of New UK Housing Rules on the Utilities Sector
In July 2024, the Secretary of State for Housing, Communities and Local Government, Angela Rayner delivered a statement to the House of Commons, in which she unveiled ‘a radical plan… to drive growth, create jobs and breathe life back into towns and cities’. [1]
The key initiatives addressed in the Secretary of State’s speech include:
Reintroduce Mandatory Local Housing Targets
Local authorities will be required to plan for homes proportionate to the size of existing communities, and incorporate an uplift where house prices are disproportionate to local income. Local housing targets will increase from 300,000 a year, to 370,000 a year. [1]
Review and Release Green Belt Land
Local authorities will be required to review their green belt land, and allocate low quality ‘grey-belt’ land for the development of affordable housing, schools, GP surgeries and transport links.
Introduce a Planning and Infrastructure Bill
The Planning and Infrastructure Bill will reform compulsory purchase compensation rules, so that the landowner is paid fairly, but not excessively. In addition, the bill will streamline the delivery process for infrastructure and provide the legal underpinning needed to ensure nature and building work can operate hand-in-hand.
This blog post considers the impact of the Labour Government’s decision to overhaul planning rules and set new housing targets on the utilities sector.
Increased Demand and Infrastructure Strain
To deliver on Labour’s promise of 1.5m new homes by 2029, the demand for water, energy and telecommunications will increase significantly. [2] This could potentially place a strain on these sectors. For example:
Water Sector: The increased necessity for water could be problematic in regions where the existing infrastructure is under pressure. For example, Sussex, Cambridgeshire, Suffolk and Norfolk are already experiencing water shortages. [3] In addition, Labour’s increased regulatory oversight will require water companies to meet more stringent compliance measures.
Energy Sector: The amplified need for energy, combined with Labour’s intention to fully decarbonise the power system by 2030, will place pressure on utility companies to both innovate and expand their capacity.
Telecommunications: The requirement for high-speed internet across new housing developments, will involve laying new fibreoptic cables and additional telecommunication towers to ensure adequate coverage and connectivity.
Collaboration between the Water, Energy, Telecommunication sectors and local councils will be critical to the Labour Government’s ambition to increase housing targets can be achieved.
Opportunities
However, Angela Rayner’s speech also presents opportunities for the utilities sector. Rayner notes that delivering new housing ‘flows from making it easier to build the infrastructure on which we rely’.
Water Sector: The emphasis on pollution control and infrastructure upgrades could lead to the adoption of advanced water treatment technologies and smarter water management systems. These upgrades may also open the door to integrating green infrastructure solutions which could enhance resilience to climate change.
Energy Sector: The focus on sustainability and energy efficiency could drive innovation, leading to the development of smarter, more resilient infrastructure. Renewable energy projects, such as wind and solar farms, may see faster approvals and integration into local grids, pushing the sector toward its decarbonisation goals.
Telecommunications: The sector will benefit from the push towards greater connectivity, driving the expansion of 5G networks and the adoption of IoT (Internet of Things) solutions in smart homes. This opens opportunities for collaboration with tech companies and housing developers to create fully integrated smart communities, enhancing both connectivity and energy efficiency in new developments.
Conclusion
Labour’s new housing planning rules are poised to place significant demands on the utilities sector, requiring substantial investments in infrastructure to support the increased housing targets. These changes may prompt restructuring within companies while fostering opportunities for cross-sector collaboration and technological innovation. The success of these reforms will depend heavily on the sector's ability to not only scale infrastructure but also to adapt swiftly to new regulations, embrace sustainability, and invest in cutting-edge technologies.
In the long term, these changes have the potential to strengthen the resilience of the UK's infrastructure, aligning the utilities sector with national goals for sustainability and economic growth.
References:
[2] https://www.bbc.co.uk/news/articles/cn074jzzrkjo
[3] https://environmentagency.blog.gov.uk/2024/03/21/meeting-our-water-needs-for-the-next-25-years/
Words by Alice Brookes
Edited by Anna Pringle
