Redrow boss Morgan blasts bureaucratic planning “mess”

Grant Prior 11 years ago

Redrow chairman Steve Morgan said the planning system is a “bureaucratic mess” which has left his firm with 16,600 plots currently locked in the system.

Morgan blasted planning during a sparkling set of results today which saw Redrow enjoy a 63% jump in pre-tax profit.

He hit back at critics who accuse house builders of land banking and put the blame on bureaucracy for slowing down construction starts.

Morgan said: “Home builders are often accused of land banking.  Under the present system once an application receives a signed S106 it counts in the statistics as a Planning Approval.

“However, that is not the end of the story as many of the sites currently “Approved”, including many of those counted in our own and indeed our competitors’ land banks, require Reserved Matters Approval and after that clearance of Planning and Pre Start Conditions.

“This process is becoming an increasingly bureaucratic, costly and time consuming exercise.

“We currently have 16,600 plots locked in the planning system at one stage or another on a total of 99 sites, which, if approved, would deliver approximately 120 additional outlets.

“Despite employing considerable resources only a minority of these sites are likely to progress sufficiently through the system to achieve a build start in the next 12 months.

“Although we do expect to increase outlets in the current year, the pace of growth is much slower than we would like and the level of planning bureaucracy is an unnecessary barrier to increasing the supply of new homes.”

During the year to June 30 2013 Redrow completed 2,827 new homes – 369 ahead of the previous year.

Turnover rose to £604.8m from £478.9m last time as pre-tax profit ticked-up to £70m from £43m allowing the firm to re-start dividends to shareholders with a 1p payout.

Redrow said it is starting to see the first signs of material and labour shortages and is expecting to experience “cost pressures across certain materials and trades” in the coming year.

The firm said: “We do however maintain excellent working relationships with our supply chain which will help to mitigate the impact of these shortages and cost pressures.

“We have always had a policy of paying our suppliers on time in line with our contractual terms and as a consequence were pleased to be one of the first major house builders to sign-up to the Prompt Payment Code.”

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