The great planning swindle

Here we go again. Once more a projected tower — or, in this case, three — is to be subjected to a planning inquiry. Highly paid lawyers will discuss what is and is not "good design" like cravated aesthetes in a perfumed salon. The destiny of many millions of pounds will turn on this whimsical debate. The "Three Sisters" by Waterloo Station will probably win but if not the Government might well decide it likes them anyway, and overturn the inquiry's outcome.

As usual in these cases, the project's developer will point out the benefits to the public that will come with its scheme. At the foot of the towers will be an open space nearly triple the area of Parliament Square and £1.5 million will go to improving nearby Jubilee Gardens. An additional £100,000 will go towards transforming the adjacent roundabout with the Imax at its centre.The undecorated side wall of the Victory Arch entrance to Waterloo Station will be beautified. There will be affordable housing, albeit at 20 per cent of the total built rather than the Platonic ideal of 50 per cent that the last mayor sought but rarely achieved.

Such benefits are standard with large developments, and are called "planning gain". The Doon Street tower on the South Bank will, if it overcomes a legal challenge recently made against it, bring with it a swimming pool. The proposed Victoria Terminus plan would donate some space for bus stops. The Shard of Glass would pay for some tidying up of London Bridge station.

On the face of it planning gain is reasonable enough. It is a quid pro quo whereby developers pay back to the public some of the profit made from expanding into the city's airspace. It suits everyone: the site gains value from the improvements around it, so the developer gets at least some of its money back.

The concept has been around for a long time. In the Sixties planning gain paid for car-friendly projects such as underpasses and gyratory systems, as was then the fashion, making the bases of towers whirls of wind and cars. Now developers are often asked to donate money towards reversing the actions of a previous generation and making areas more foot-friendly.

Much of the time, planning gain pays for perfectly reasonable improvements. The problem comes when it is connected to large and controversial projects. At this point, combined with all the other vaguenesses and variables of the planning system, it becomes a recipe for mud.

With plans such as the Three Sisters or Doon Street, there are a series of separate issues. Are they too big for their sites? Do they intrude unacceptably on views from places such as Somerset House or Parliament Square or the Embankment? Are they good architecture? What kind of spaces do they create at their base? How great is the planning gain?

Each of these should be dealt with separately. If there is some notion of what is too big or too high, that should be established at the outset. It should be decided not in relation to a single site but an area as a whole: if the surroundings of Waterloo are to be a new Canary Wharf, what does this mean as a whole, not just in relation to the Three Sisters site? How architects then design their buildings within the agreed volume should be the subject of separate discussion. The extent of planning gain is something else again.

What actually happens is that these questions are mulched together. Planners refuse to give a definition of "too big" or "big enough", so developers push for as much as they can. Architects, sometimes good ones, are brought in to massage the proposals into acceptability. They are prized less for their ability to make a thing of pride and joy than as lubricants for the insertion of large objects into the skyline. At the same time planning gain is laboriously negotiated. The process takes years, and hundreds of thousands, if not millions, of pounds in fees.

Eventually planners and the public are presented with a choice. The towers have to be built, argues the developer, who has invested much in the project, or he'll shoot the swimming pool/new public space/new bus stops. In the case of the Three Sisters, planners must either accept the hefty wall of development they present to the river, or the improvement of Jubilee Gardens will be shelved. Two separate issues are conflated: the local one of planning gain, and the Londonwide question of the impact on important views.

Developers, architects and planners may all be acting professionally and in good faith but the public benefit becomes a pawn in a spectacularly inefficient process of planning negotiation, one that proceeds through blur and compromise. Power is put in the hands of the consultants and officials who manage this process and removed from public debate. Given the mismatch in negotiating skills and resources between a developer and a local authority, the former is likely to come off best.

When built, the "public spaces" achieved through planning gain tend to be formed on the developer's terms. They are highly managed, excluding elements thought undesirable to commercial tenants or damaging to rents. They are located near development sites, leaving swathes of London that might be equally deserving of improvement untouched. And, if the market turns such that a development is postponed, the planning gains don't happen at all.

Planning gain is a tax that dare not speak its name. It is a stealth tax whose cost is not only in the money squeezed out for some nice new paving here and there but also in the delay, expense and uncertainty that goes into negotiating it and in the skewed logic of the decisions it leads to. It removes the possibility of thinking clearly about the public good, as opposed to finding ways of shaving benefits off commercial developments. It turns planning officers into hustlers and wheeler-dealers, which they are singularly ill-equipped to be. On large developments, it turns property companies into ersatz mayors, determining the physical and social characters of whole neighbourhoods. Again, developers don't necessarily have the skills you'd look for in a local leader.

This might for now be the least bad way we have of getting public benefit from property. But is it too much to hope for a world where a tax on development is openly and honestly levied, its proceeds to be spent as elected bodies think best for the city as a whole? In this utopia, however, the officials and consultants who currently gain work and influence through the machinations of the system would find themselves short of employment. For this reason it is unlikely to happen.