2. Securing the value of land

Competition for land uses plays out daily across the UK, over housing and energy developments, between shepherding and wilderness in the uplands, and as major infrastructure projects like HS2 carve their way across the country.

While agriculture and fishing contributes just £9.2 billion (8 percent) to the agri-food sectors £113 billion, it is the existing land use (pasture and arable) for over half of the UK’s land. Land is the UK’s most valuable non-financial asset, worth around £5 trillion in 2016, though that under-represents the societal value of land in providing a multitude of ecosystem services, distinctive landscapes and beauty. The future direction for agriculture will hugely influence land use and land management systems, and — vice versa — how land use is framed will largely determine how agriculture evolves in coming decades.

The issues we want to tackle

Almost a decade ago, a major inquiry by the government’s Foresight Unit made the case that pressures from competing land uses would grow and recommended addressing this with a more strategic approach. Crucially, it recognised that the same land can deliver several benefits at once, and that the need for such ‘land sharing’ or ‘multifunctionality’ will increase.

Yet present policies tend to block this. Agroforestry — having trees on farmland, which can provide productivity, environmental and animal welfare benefits — has historically fallen foul of CAP rules that treat farming and forestry as mutually exclusive. While amendments to the CAP has helped remove this block, other barriers remain. The government’s proposals in the Agriculture Bill to enable integrated land uses like these are encouraging. Yet there are still cultural silos between farm and forestry specialists, across government agencies and beyond.

Why this has been so intractable

One underlying challenge that affects different land uses, from housing to agriculture, is that land itself has increasingly become the object of financial speculation, investment and land banking. This has sucked investment from more productive uses and contributed to low housing supply. It has also led to land and house prices becoming detached from growth and income in the wider economy. One aspect driving land inflation will diminish during the transition from CAP — grants and payments through the Basic Payment Scheme — but other factors like inheritance tax relief (on farm land), land banking (for housing), and foreign investments (for speculation) may all continue to push up prices.

Huge profits from land speculation and land banking have created a perception of land as an easy source of wealth but have side-lined potential solutions that focus on restoring other kinds of land uses.

Towards more comprehensive solutions

We do not believe that the future of land use is best mediated via an inflexible strategy imposed from central government, which is unable to engage with the character and contexts of different places, and the particularities of their soils, wildlife, housing needs and identity. But these debates over rival uses of the land have to be mediated through an enabling framework — across finance, infrastructure, services, planning, agriculture and other domains — that allows local decision-makers in communities, businesses and government to negotiate the different uses and benefits of land.

“Environmental management schemes are currently approached from the top down, they are not monitored, they are not based on the individuality of farm and location, and It removes local knowledge. Farmers buy into environmental management schemes and the design is based on a farmer’s previous yield, there is no monitoring of productivity or biodiversity in the systems once applied.” Farm Advisor, Cumbria

Scotland has a land use strategy (2016–2021), which includes a long-term vision, objectives relating to the economy, environment and communities, and principles for sustainable land use to guide policy and decision making. Wales adopted its Wales Spatial Plan in 2004, and is currently working on a National Development Framework which will set out a 20-year land use framework to replace the Wales Spatial Plan. Northern Ireland has made significant progress towards developing a land use strategy which was presented three years ago to a group of Assembly Members but has not been implemented. Whilst none of these is an unalloyed success so far, they do illustrate a commitment in the devolved nations to start to deal with difficult issues that have been ignored for too long.

England is the exception. It has a National Planning Policy Framework, which provides a basis for locally-prepared plans for housing and other development, but no overarching strategy to guide land use in the public interest. The challenges that such strategies now need to address range from a shared view on how we use land, to the unintended effects of things like cheap mortgage finance, to how we protect and regenerate land for carbon sequestration to how landscape is valued. While these are devolved matters, there should also be a mechanism to debate and mediate those issues with local (cross border catchments like the Severn, Wye or Tweed) and supranational impacts (like aquaculture practices; or water quality).

Next steps

Support creative responses to housing needs

Housing affordability in rural areas and for rural workers is still a significant issue. In some rural areas the impact of second home ownership is negative , for example limiting homes available to local families and pushing up house prices, but it may also stimulate the rural economy through tourism and housebuilding. Policies must be sensitive to the local impacts of second home ownership and increase policy support and public resources available for small-scale housing development, including self-build, custom-build and affordable housing. Examples of policies include:

• The Princes Countryside Fund proposes a strategy which allows farmers to build a retirement house on their land, so that they can pass on the farm but not have to leave their home.
• The One Planet Development scheme in Wales, which supports sustainable housing in rural communities, could be rolled out more broadly across the UK to support innovative local practices.
• Planning policies such as Rural Exception Sites, which allow for small areas of agricultural land to get planning permission for housing, and therefore can help increase affordable housing for which people with a local connection are eligible.
• Agri-villages, which are a model of sustainable community-led housing that integrates land-based enterprises with affordable housing, such as the Millom project.

Making connections between affordable housing and more sustainable land use extends to how we build and what we build, as well as where we build. The Royal Society proposes making more use of timber as a building resource as part of a suite of practical proposals for greenhouse gas reduction.

Tying housebuilding with a land use framework in this more systemic way illustrates how integrated approaches could generate benefits across the policy territory. This could help mitigate the unintended consequences of positive policy intentions in one space undoing intentions in another. The Help to Buy Scheme is a case in point; it transferred public money to house-builders, but with little prospect of a sustainable housing solution. It also cost £2bn in the first nine months of 2017 (about the same, pro rata, as the cost of the Common Agricultural Policy).

“We’ve always had to share the water with energy folks, at least as long as I remember. It used to be oil and gas. They’d disrupt the catch when they were working. But we generally worked out ways we could both get our job done. The wind turbine folks though, they have a different ego about them. Like ‘I’m saving the world. Get out of my way.’” Crab fisher, Norfolk

The relationship between affordable housing, second home ownership and employment opportunities in rural areas needs nuanced policy approaches. It is much harder for younger people to live in these areas because there are fewer jobs available. Research by the Centre for Towns shows that since 1981, Britain’s towns and villages have lost more than 1 million people under 25 but gained over 2 million over 65-year olds.

A national land use framework and a mechanism to achieve this

Nearly all contributors so far agree that the UK should have a strategic land use framework. But the mechanisms for getting there are complicated. Our findings underline the need for something of the kind previously recommended by government’s Foresight review. This would have established duties, objectives and mechanisms for government departments and agencies that already influence land use to coordinate their activities in the public interest.

The Multiple Land Use Framework now used in Australia, for example, makes these decisions more transparent by setting out questions, principles, risks and the factors that should be considered, especially when land is designated for a single use.

The UK government has acknowledged that there are aspects of the national landscape that require better processes for strategic development, for example, through the National Planning Policy Framework and the National Infrastructure Commission, but these are not coordinated with other areas of policy that affect land use, including agriculture.

The National Infrastructure Commission was set up to provide independent, transparent analysis and evidence-based advice to the government on the UK’s infrastructure needs; and to unblock progress towards the major projects that governments have argued are needed for economic and social development. A standing body along similar lines for land use would take responsibility for convening, synthesizing and mediating the complex and competing perspectives on land use.

“There is a vociferous aura around re-wilding. There are some within the movement who understand the complexities, yet the ones who speak the loudest are extremists who drown out the realists… Farming communities are turning inward, they are feeling under attack by environmentalists. Since the 1980’s there have been two opposing forces between farming and conservation and that has eroded the middle ground” Campaigner, Cumbria

A National Land Use Commission could bring comparable independence, expertise, analysis and long-term thinking, but with stronger accountability to landscape bodies, communities and local authorities, and a responsibility for the overarching framework. As well as mediating different land use needs — for food and forestry, development, energy or natural capital — it would also ensure that aspects, like the value of landscape and beauty have a voice. It could help advocate for and drive important strategic investments such as coordinating rural transport, housing and rural development projects — on a more modest scale than HS2 or Crossrail but nonetheless vital to integrated rural regeneration. The appropriate remit of the framework and commission — UK or England — requires discussion.

Create financial instruments to protect and develop the public value of land

Sharp rises in land values make land, whether for farming, housing or other uses, increasingly inaccessible to those who do not own it. Mechanisms that allow communities to capture part of this increased value have the double benefit of discouraging speculative investment and sharing the rewards.

The main way in which rises in land values are currently captured to compensate the local community is via Section 106 agreements based on the Town and Country Planning Act or Community Infrastructure Levy — though some local authorities have not used their S106 funds properly to invest in improvements to public services. But there has been no systematic method set out for capturing rising land value for the public good since the attempt to create a Development Land Tax in 1976. This was widely agreed also to have been too complicated and it was repealed in the Finance Act 1985.

There are several possible approaches that could make some inroads into capturing rising land value, creating a more efficient land market, raising public revenue, and revitalising marginalised areas of the country. One is to allow local authorities to buy land at existing or agricultural use value — excluding any ‘hope value’ of the land being developed in future. This is how the new towns were built in the UK and is behind some of best examples of new development in Europe, such as Freiburg in Germany or Vathorst in the Netherlands.

“Our landscape is full of cultural stories. And the people that have written a lot of these stories are farmers. If we push farmers to the side of their own narrative then we’re damaging our landscape and misunderstanding it.” Conservation Manager, North Pennines

Another related approach, is to create a sovereign wealth fund for land, managed independently of the government, under a renewable charter, such as that which governs BBC. This could be used to buy land with particular public value, so that stakeholders can have some say in future land uses that sustain vibrant and flourishing rural economies, with environmental benefits. We will look at several ways to capitalise such a fund in the next phase of work.