Ref: 99865444 [rev A]

Non-technical summary
Section 1: a new economic model
The great new town pitfall is to attempt in architecture what
should be done in economics. Elevated walkways, fountains
and parks can do little to eliminate hardship and inequality.
Better economics can. But how can a city challenge
systems set at a national level?
This submission set outs:
What the new economic model should be
How it will work within the existing national system
How it can deliver a new town relieving pressure in existing urban hubs
How it could be applied more widely to ease that pressure at source

Illustration: an outstanding school

Parents all know that a house in the catchment of an outstanding school commands a
premium. Estate Agents do too but few of us reflect that:
The uplift can total 40m over the schools catchment
This is added value created by the efforts of teachers
For the teachers a consequence of their achievement is that they cannot afford to
live where they work
Outstanding education is the product of teaching, not buildings however grand, or
settings however green. On the other hand if part of the land value uplift could be
returned to the schools that create it, then they can fund their own buildings and parks.
Some would instead choose to employ more specialist teachers in sports, music or
languages for instance; or pass back part of the value in higher wages to the teachers
who created it. Probably they would do all three.
This illustrates the potential for a new economic model to make:
Public services and infrastructure self-funding
Effort reap more of its just reward in higher wages
Additional employment - not through outside investment but self-generated
locally in things we all want to see happen but which do not seem economically
viable at present.

A liberally endowed new school will be the first element of the urban plan,
supported by the economic model that forms the central proposition of this
submission. Employment and schools are the prime reasons people relocate.
The finished city will have several schools, but other public services like a new
railway station or light urban transit system create similar added value effects.
The new economic model will apply across the citys public services and will
also reduce the tax burden on employers, to drive higher wages without higher
payroll costs, create more employment and enable people to get things done.

Section 2: landmark projects for a visionary urban plan

The worlds most loved cities flower at the height of their
economic liberalism. They define themselves in our
memories by iconic landmark features. However cleverly
clad, a shopping centre as the town focus fails to do this.
It should be a religious, cultural or civic masterpiece,
preferably seen across water, like San Marco on the Grand
Canal, the Palace of Westminster over the Thames or the
Opera House jutting into Sydney Harbour.
The church
The worlds first cathedral in glass will be a spectacular icon attracting
international renown. Far from the empty mirror plate of the modern high rise it
will be a contemporary gothic structure of arches and spires in luminescent
white sand cast glass on an arcade base of local masonry.
New towns have this spiritual challenge to cultivate depth without history and a
church can draw committed communities that give more than they take. 6%
attend services but 25% of us visit cathedrals each year for their architecture or
choral music. The school can provide the choristers.
This church leads the way. The town will open its doors to committed
communities of all sorts and the economic model will make generous provision
for any group wishing to found new community or religious buildings.

The canal
The glass church will shimmer over a created lake. The canal will provide for the
towns water needs, a space for poetry, rowing, sailing, cycling, all sorts of
recreational and ecological benefits and transportation of the cast glass blocks.
Level changes are opportunities for hydro-electric generation and mains services
benefit from water-cooling. Subject to location, the canal can offer solutions to
flooding for a wider hinterland, or help launch the ambitious North-South Grid
proposed (by others) to relieve water stress in the Southeast.

The pods
A light urban transit system with electric pods quietly zipping around on slender
elevated guideways provides a low energy transport system: personal like a taxi,
less expensive than buses and producing zero emissions locally. It may sound
like science fiction but is proven technology piloted at Heathrow and achieving
the highest availability of all transport there. It will be a city of bridges in the air.

Section 3: principles for the urban plan

Planning policies supplement the economic model to promote local
employment, craftsmanship and diversity. Design will be constrained neither by
modernist manufactured aesthetics nor nostalgic historicism. Visual unity will be
established through a strictly limited palette of materials: local masonry (brick or
stone), glass and a local roofing material.

Sections 4/5: location, delivery, popularity

and viability
Selection principles define what makes an appropriate location and they are
applied to a provisional location for illustration purposes. The actual location is to
be selected by inviting communities to bid for the town. The economic model
supports a governance model that will invigorate local democracy, conveying
real choice and the benefits of growth in perpetuity to local people. The
economic and governance models offer solutions to a community with a
problem: whether that is flood risk, water stress or rapacious developers. This
proposal combines those promises with iconic projects that will inspire some
active groups, to present a package that would win a local referendum.
Delivery outlines 5 stages from village to embryonic town to city of 21,500
population on 450 hectares. Each stage is a finished self contained whole.
A first draft of the numbers demonstrates economic viability.

Ref: 99865444

[rev A]

How would you deliver a new Garden City which is

visionary, economically viable, and popular?

Main submission
Section 1: a new economic model
Section 2: landmark projects for a visionary urban plan
Section 3: principles for the urban plan
Section 4: location
Section 5: delivery, popularity and viability

Section 1: a new economic model

The great new town pitfall is to attempt in architecture what should be done in
economics. Fountains and parks cheer us up but can do little to reverse the
causes of hardship and inequality. The brief invites a more comprehensive
response and the central vision of this proposal is a new economic model to do
that.
The school example in the non-technical summary illustrates the potential for a
new economic model to make:

Public services and infrastructure self-funding

Effort reap more of its just reward in higher wages

Additional employment - not through outside investment but selfgenerated locally in things we all want to see happen but which do not
seem economically viable at present.

Two components of the model

The tax and benefit system should have a coherent structure based
on clearly defined economic principles in which unnecessary
distortions have been eliminated. Mirrlees
The leading assessment of our national economic system identifies distortionary
forces throughout the tax system that stifle productive enterprise and
employment. The challenge taken on here for the new Garden City is to identify
a better way to fund its public services that meets that test: coherent and based
on clearly defined principles. But to do that in a way that is feasible at city level
within the existing national system. The new economic model described applies
a two-pronged approach to meet that challenge.
Firstly it proposes a public services funding basis founded on the principle of
land value capture applied on an ongoing basis to replace existing local forms of
taxation.
Secondly it applies the surplus from that model to offset the worst distortionary
effects of national taxation establishing the city as a new form of enterprise zone.
Two components of a new economic model at city level:

1.1

A new funding basis for public services

1.2

Enterprise Zone tax offsetting

1.1 A new funding basis for public services

Funding through land value capture is anticipated in the brief. The
real opportunity though is to establish that funding principle as a
durable and ongoing source of public revenue.
The school example in the non-technical summary illustrates how that value is
created not once only as a windfall of planning consent but on an ongoing basis
through the public benefits conveyed by teachers and other service provisions.
This section describes:
-

Three methods of land value capture on an ongoing basis

A case study: Hong Kong

How the leasehold method will operate

Benefits of the new funding basis

It would be a lost opportunity to build a city but let it go the way of those we
already have, with hardship and inequality rising in proportion as the city grows.

Annual land value capture: 3 methods

The appropriate method depends on characteristics of land
use, ownership and governance. Three approaches:
1. In traditional economies land is held by a chief on behalf of the community
and allocated on a use or need basis.
2. Land Value Tax is a market variant for developed and monetarised
economies where land is registered in private freehold possession. LVT is
practised to some extent in Denmark, Estonia, New Zealand, Taiwan, Australia
and the US. Critics cite valuation difficulties but VOA Surveyors here valuing land
and buildings regard the land only valuation as straight-forward. LVT is the
method for which the most data is available, notably in Andy Wightmans report
A Land Value Tax for England, but we show how the data can be applied to an
alternative method.
Mirrlees states: The economic case for taxing land itself is very strong and there
is a long history of arguments in favour of it. Taxing land ownership is equivalent
to taxing an economic rent to do so does not discourage any desirable
activity. Land is not a produced input; its supply is fixed and cannot be affected
by the introduction of a tax. Ch 16 conclusions quoted by Andy Wightman.

Proposals for land value taxation have not fared well in England, diverted by
Garden tax headlines or concerns for the widow in the 4-bed house, that is,
older people who are asset-rich but income-poor. Worked up LVT proposals
have tended to set an unambitious target to replace NNDR and CT and
therefore proposed a low rate Andy Wightman proposes 1.85% of annual
rental value. That is because they are trying to minimise stress on the key
political measure of residential winners and losers.
3. In special circumstance where land is assembled but not released as freehold
then a leasehold approach can deliver similar results. Instead of collecting the
economic rent through taxation it is collected more directly by auctioning leases
and collecting an annual ground rent.

Case study: Hong Kong

Hong Kong consistently appears at the top of league tables measuring
adherence to free market principles has the 7th largest sovereign wealth fund
in the world 200bn the more remarkable as it does not derive from natural
resources GDP per capita is similar to UK but unemployment half and 10year growth double Andrew Purves
All land is held by the state, most granted on 75 year leases or rented at 3% of
annual lease valuation from which revenue in 12/13 was 600m. Perpetual
leasehold (Nissim) auctions for new leases raised 5.3bn in 12/13 into a
separate Capital Works Reserve Fund off balance sheet. Development rights
around and over MTR (Mass Transit Railway / underground) stations are granted
to MTR and fund its works off balance sheet.
Government spending appears to be lower in HK but many services funded
directly from rent of land held by utility companies and therefore off balance
sheet. Wages appear much lower 1/3rd but Income Tax is zero for most families,
there is no NIC, VAT, Council Tax or Excise so real wages are more like 2/3rds.
The people have comprehensive social security provision including hospital care,
old age, disability, unemployed, single parents, education from 3-15 etc.
Including for a massive influx of impoverished immigrants from China from 1953.
31% live in public rental housing. HK Housing Authority is also off balance sheet
with $29bn of land.
The system has been allowed to deteriorate with ground rents becoming low
and initial leasehold purchases very expensive in other words moving toward
freehold. However it illustrates that the leasehold model can work as a secure
revenue model for funding public expenditure and infrastructure in a fully
developed trading economy.

How the leasehold method will operate

Land acquired for the city will be vested in a Community
Land Trust held on behalf of residents in perpetuity and
made available on a leasehold basis, an approach
consistent with Howards original ideals.
Lease values are established by the market in the usual way, at the best
permitted planning use, but separated into two parts:

Unimproved land value lease purchase and annual ground rent paid to
the Trust in perpetuity.

Capital improvements value, including the building, paid to the person

who created it or his successors in title in the usual way.

Leases are auctioned to developers or to individuals for self-build and capital

improvements (buildings etc) owned and marketed by the developer. Costs to
households and firms do not change, only the economic rent of land is
redirected into different hands.

Terms and reviews

Leases are for 99 years reviewed annually so that uplifts, whether from growth
or improving infrastructure, are collected by the Trust. Letchworths experience
was that 99yr leases with no reviews were more popular than 999yr leases with
reviewed 5-yearly, indicating a preference for certainty. Accordingly a secondary
market will be encouraged to provide fixed rate options as in the mortgage
market. Lease reviews are not upward only.

Built-in compensation
Households suffering negative effects of development, such as loss of a nice
view or noise from a new train link will see a reduced valuation and reduced
ground rent providing built-in compensation. Likewise an economic downturn
might see a general reduction in values that would act like a tax rebate.

Effect on normal revenue streams: Council Tax

Council Tax is highly regressive since it was never revalued after 1993. Valuation
of the building also discriminates against improvements while unimproved
properties are relatively under-taxed. Occupation criteria encourage underutilisation. Low rate at 0.3-1% (of annual rental value) compared to 46% for
business rates distorts the market in favour of conversion to residential uses.
Council Tax rate will be set to zero and the revenue to the LA supplemented
from leasehold income.

National Non-Domestic Rates

LA entitlement to its formula calculated quantum of NNDR is unaffected but the
valuation will be rebased on land only, on a revenue neutral basis.
Businesses complain that NNDR is regressive with marginal areas being
relatively overcharged. The rebase fixes that distortion. NNDR is not replaced
because 1. Commercial land values would rise causing difficulties of comparison
with other places and 2. Not being a top value location the town benefits from
redistribution of NNDR as currently organised.
Valuation, collection and enforcement mechanisms remain in place and will be
extended to the valuation and collection of lease ground rents.

Letchworth
Letchworth is still owned collectively holding most of the commercial buildings in
trust and leasing them to shopkeepers. Assets are 127m and leasehold
income 7m a year. That is a significant 11% boost on top of normal local
authority revenue, but it collects little of the economic rent of residential
properties whose value far exceeds the shops.
In Letchworth it would be much higher. Local government expenditure is
102.2bn (budget England 2013-14) = 1900 per capita (Englands population
53m). Pro rata for Letchworths 33,000 population = 62.7m. (9x)

Affordable homes
Cost to households will be less than they would pay in rent or mortgage
payments plus CT as it will not include a speculative element on the land value
or interest payments to mortgage suppliers on the land element. A mortgage
may be taken out to acquire the building which would be like a shared equity
mortgage with the capital requirement up front lower as the is not acquired. This
will make houses in the town generally relatively affordable. A proportion, up to
35%, may be retained by the Trust and managed by a Housing Association to
supply a social rental market.

Enabling Act provisions

See Governance in Section 4

Benefits of the new funding basis

In Taken for a ride Don Riley estimates that the 3.5bn
Jubilee Line Extension completed in London in 2000
generated 13bn of uplift in the value of commercial land
around the stations.
Value uplift was 4x infrastructure construction cost but Riley measured only
commercial land and only within 0.5 miles of stations. Ultimate value uplift would
be far greater.
Location value is the product of local amenities including transport infrastructure,
good schools, parks, cleanliness, street-lighting, parking, policing etc together
with private positive externalities such as good shops, cafes etc.
On this new funding basis uplifts resulting from improvements in public
infrastructure are collected on lease revaluation.
Well conceived infrastructure is self funding.
Predicted uplift forms the business case for infrastructure proposals and a basis
for comparing alternative proposals.
Future uplift provides ample collateral reducing cost of credit through normal
channels if required to fund investment.
Removes the option of costless freehold that benefits bigger, older established
businesses and enables them to outcompete smaller newer businesses,
improving the prospects for new start-up enterprise.
Holding land is no longer costless. That improves land use efficiency,
discourages land banking, increases supply and market liquidity and therefore
can lower domestic and commercial rents
Lower rents will attract firms and reduce barriers to entry for new start-ups,
artists and artisans
Surplus leasehold income is available to create a new form of Enterprise Zone
tax credit.
Substantially removes the rewards of land speculation and rent-seeking.
Stabilises the property market. Ends or tempers the cycle of boom-bust and
related credit liberalisations and contractions.
Redirects credit and investment from bidding up the price of extant assets,
especially land, to providing credit for productive enterprise.
Change the banking sectors fixation on land as collateral so that business plans
and the integrity of their proposers would be the measure of credit worthiness.

10

1.2 Enterprise Zone tax offsetting

Tax reliefs are a standard feature of enterprise Zones and
Development Corporation charters but always appear to be an
arbitrary time limited subsidy in special conditions, establishing no
improved understanding of what a pro-growth policy for normal
conditions would look like.
A new public services funding basis was the first component of the economic
model. It removes distortionary effects of local taxes but cannot alter national
taxes. The second component is a method to ameliorate effects of national
taxation starting with the most problematic: taxes on employment.
This section describes:
-

Income Tax Credits: a local rebate on income taxes

A review of other Enterprise Zone models

A brief survey of other taxes

Benefits of the credit: reducing payroll cost without reducing wages

The objective is to create an enhanced form of pro-growth Enterprise Zone that

will deliver a broad-based flourishing of new local enterprise, creating new
employment, new local services and demand.
And to fully set out the principles underpinning it and the benefits.

Income Tax Credits

The Trust will apply lease revenue after infrastructure costs
to provide tax credits to firms, directly offsetting national
taxation in priority order with the most destructive,
distortionary taxes offset first. In offsetting a tax a full
explanation will be given of the principles.
The first achievement will be a substantial offsetting of Income Tax to be
claimable by firms as a credit against PAYE (IT and NIC) and ENIC they pay out.
It will be up to the firm whether the rebate is invested in new capital, expanding
employment or passed on to employees in higher wages to attract or retain the
best staff. Or all three.
This is a genuine tax credit unlike those that currently bear that name that are
welfare payment to families unrelated to net tax contribution.

11

A fourth possibility is that firms retain the credit as profit. In this case superprofits will attract other businesses into the area willing to compete down prices
and this will also deliver more employment locally and benefit local people as
lower prices and cost of living savings.
Self employed will have a fiscal incentive to allocate themselves a wage rather
than accounting all surplus as profit for tax purposes. There may still be
distortions between PAYE and SE (to be considered further) but less than
currently.

A review of other enterprise zone models

Existing regeneration schemes recognise the critical relationship between
location value and enterprise. Two are reviewed briefly here: BIDs and EZs.
Business Improvement Districts (BIDs) use the NNDR mechanism to draw
1-2% extra contribution from existing businesses to supplement public services.
Enterprise Zones (EZs) use the same mechanism to deliver a subsidy to
attract new businesses. At first glance, these appear contradictory. They make
sense when it is understood that rateable value is the only available proxy for
location value, but a very imperfect one. In moderately prosperous business
locations the only form of additional taxation that firms consider fair is one
approximated to an LVT basis, hence the success of the BIDs model. (It also
has well designed governance and introductory mechanisms that are drawn on
for the bid proposals under Governance in Section 4)
The regressive aspect of NNDR is the extent to which it fails to approximate to
LVT across regions. It is worst in the most marginal regions where industrial
employment has collapsed and land values are accordingly low or zero. Here
including building value into rateable value ensures that these areas are
regressively overtaxed driving out any remnants of enterprise. These are the
zones winning special measures and the rebate recognises what LVT predicts
that taxing enterprise in marginal locations will eradicate it.
Both schemes are unsatisfactory to the extent they lack a coherent fiscal
philosophy and do not address the wider problems of taxes on employment.

Other distortionary taxes

Transaction-triggered tax are avoided by avoiding the transaction so tend to
stifle growth. Stamp duty: increases cost of trading up or down as needs
dictate, decreases market liquidity. Inheritance tax: creates incentives for
complex trusts and vehicles and hits estates hard if deaths occur in succession.
CIL: discourages development. VAT, Excise etc: Raise prices so reduce
demand and reduce real wages or increase payroll costs, complicate trade,
impose admin burdens on firms, can be avoided and off-shored leading to vast
extent of evasion. Costly to collect and enforce.

12

Benefits of lower costs of employing people

Secondary benefits arise from reducing what is called the
Dead Loss Effect of taxation whereby activities and sites
that would have been economically viable before taxation
are uneconomic after.
Calculations in Section 4 do not take secondary effects into account but the
additional growth arising would further enhance the model. Wage restraint,
reducing real wages, undermines consumer demand and has a negative effect
on growth. But reducing payroll costs without reducing wages:
- increases international competitiveness returning some production onshore.
- improves the viability of repairing things employing local labour relative to
replacing with new from abroad produced with cheaper labour.
- reduces cost of labour relative to materials increasing recycling, reusing and
repairing, reducing waste
- improves the built environment as maintenance and craftsmanship are viable
- improves the viability of skilled workmanship providing more creative,
rewarding employment to many
- returns labour intensive industries to viability. Possibly steel, ship-building etc.
- improves the outlook for labour intensive agriculture in place of the
industrialised version, could reduce mono-cropping, improve biodiversity,
decrease chemical use and inhumane treatment of animals.
- return labour to agriculture and rural employments reversing the flow of
population from countryside to cities. Therefore return rural shops and pubs to
viability and improve return on investment outside cities, such as extending
broadband.
- return labour to marginal locations including reverse the flow of economic
migration from other regions to the Southeast.
- reduce requirement for state funded regeneration grants and interregional
transfers.
- restore the option for young people to live and work in the communities where
they grew up, reducing dislocation, restoring access to extended family and
local support networks, strengthening families. This could reduce demands for
state funding of childcare and care of the elderly.

13

Section 2: landmark projects

The architectural qualities of the worlds most loved cities
have always come at the height of their economic liberalism
so high expectations are vested in the radical economic
model. In due course that will generate dynamism and civic
ambition but in the meantime three landmark projects are
outlined to put the town on the map and sew the seeds of a
civic pride.
Great cities always have some iconic image that imprints them in our memory.
Sydney is a classic example with the image of the Opera House jutting into
Harbour against the backdrop of the Harbour Bridge. Three elements: a cultural
or spiritual icon, a body of water and a landmark engineering structure.

The church
New towns have this spiritual challenge to cultivate depth without history.
Churches create committed communities that give more than they take. 6%
attend services but 25% visit cathedrals each year for their architecture or choral
music. The school can provide choristers.
Descriptions of Britains favourite towns frequently mention views of a striking
ecclesiastical building visible from several vantage points and a church adds
value in its locale even for those who do not attend it.
The worlds first cathedral in glass will be spectacular icon attracting
international renown. Far from the empty mirror plate of the modern high rise it
will be a contemporary gothic structure of arches and spires in luminescent
white sand cast glass on an arcade base in local masonry. Panels, and vault
webs are in opal laminated float glass with arched windows and rose window in
clear glass with geometric ribs in laminated glass.
Glass is surprisingly strongest in compression so well suited to gothic
construction techniques. Cast glass can take a long time to cool but Nazeing
Glass have a slow-moving conveyor based furnace facilitating rolling production.
The cast slabs forming columns and ribs will be in thin slices of 60mm to reduce
cooling times. The Atocha Station Memorial in Madrid proves that it is feasible.
This church leads the way. The town will open its doors to committed
communities of all sorts and the leasehold model automatically helps: planning
uses that generate low rental value like schools and religious buildings will be
virtually exempt. Planning policies will favour such uses benefitting any group
wishing to found new community or religious buildings.

14

The canal
The most admired towns invariably feature rivers or water in some form at their
heart and some of the worlds most beautiful cities are canal towns: Venice
obviously but also St Petersburg, Stockholm and less well known: Annecy in
France and Tigre in Argentina. With an area of 430ha and population of 20,000
Bruges is an inspirational reference.
The glass church will shimmer over a created lake. The canal will provide for the
towns water needs, a poetic settings for landmark buildings, rowing, sailing,
cycling, other recreational and ecological benefits and transportation of cast
glass blocks for the church. Level changes are opportunities for hydro-electric
generation and mains services benefit from water-cooling.
Subject to location the canal offers solutions to flooding as at York and Exeter
and in the Netherlands or to relieve water stress (shortage) as in parts of the
Southeast and East Anglia. In the right location it could help launch the
ambitious North-South Grid Canal on to relieve water stress in the Southeast.
(featured by Bloomberg Feb 20th
Paths along the canal can provide a margin between minimum and maximum
water levels to provide capacity to relieve flooding. Where the canal runs
through land subject to flooding ideally it should run on the lower side of
adjacent land, to absorb some run off. In areas not liable to flooding but prone
to water stress, it should run above fields to facilitate irrigation.

The pods
A light urban transit system with driverless electric pods quietly zipping around
on slender elevated guideways provides a low energy transport system for the
town: personal like a taxi, less expensive than buses and zero emissions locally.
It sounds like science fiction but is proven technology piloted at Heathrow and
achieving the highest availability of all transport systems there.
An elevated distribution spine will support spurs to suburban hubs and a
network grid providing higher density of stations into the town centre grid.
Infrastructure is inexpensive but in the higher rise central business district leases
will include a licence or easement for the light transport system to take support
from buildings with obligation for the developers to provide adequate support in
the faade. It may become known as the city of bridges in the air.

The foundry
Planning policy (Section 4) will apply a requirement to use local masonry. A local
foundry will be named or developed to supply the material. Initially it will be a
monopoly supplier owned by the Trust, later if appropriate competition can be
invited and the original foundry privatised or part privatised.

15

Section 3: principles for an urban plan

Planning policies supplement the economic model to
promote local employment, craftsmanship and diversity.
Design will be constrained neither by modernist
manufactured aesthetics nor nostalgic historicism. Visual
unity will be established through a strictly limited palette of
materials: local masonry (brick or stone), glass and a local
roofing material.
The urban plan will be shaped by its location and the location selected by bid.
See Section 4. In the meantime some principles are outlined here, and in the
next section applied to a provisional location to illustrate the approach.
Planning polices and quality controls can be delegated from the Local Authority,
agreed through a Local Development Order or simply applied through the lease
process with the Trust enshrining in the lease a Landlord Approval process.
Policy will favour high density at least in the central area, a liberal approach to
overlooking to encourage roof terraces and balconies; a liberal regime on
change of use to encourage mixed use communities and growth of cottage
industry,

Lessons from Poundbury

The Princes development at Poundbury phased sale of land so that developers
could only secure later phases if they adhered to the masterplan for the earlier
parts. Tenderers are required to provide detailed plans and no sales are
permitted until all is complete. Development briefs combined with leased site
sales are also used, as are licence agreements. Tightly controlled design codes
ensure quality of design and workmanship regulated by legally binding Building
Agreements with developer before freehold or leasehold release.

Mixed uses not zoning

Mixed uses are generally to be permitted or even encouraged. There may be
some disadvantages but the opposite, zoning, an invention of central planning
has had worse disadvantages.
Mixed uses bring benefits of:
-
-

flexibility for cottage industry start-up to occur from home initially and
then to grow, maximising scope for flexible self-employment.
opportunities for employment for people more locally to where they live
facilitating the walkable town ideal, reducing car use and parking spaces.
16

-
-

Vibrant mixed local character and interest where zoning creates

monocultures: hollow dormitory suburbs with no employment and arid
industrial parks with no human element
Crime prevention. Dormitory zones that empty by day and employment
zones that empty by night facilitate antisocial behaviour and crime.
Poundbury features a mix of commercial buildings built among residential
areas. This seems to be the right end result but with the limitation of what
can be pre-empted and pre-planned. Preferable to achieve the same end
by flexible change of use and natural evolution.

The case for Zoning: streamlined planning permission

The most persuasive claim for zoning is that it streamlines the planning process.
eg. in a residential zone applicants or developers can be certain of consent for
dwelling of a defined size and density. A more liberal approach is preferred with
planning streamlined in the founding charter of the Trust.

Higher value uses drive out lower value uses

This is natural and positive in a growing economy and if permitted to proceed
organically delivers mixed uses at some times and places and specialisation at
others. It becomes artificial where one use is favoured in the tax system as
described in Section 1 under CT and NNDR. It is then a blunt instrument to use
planning controls to prevent change of use such as RBKCs presumption
against loss of employment uses.
Here the economic model removes that distortionary effect.

Neighbourly uses
Historically, industrial, chemical and biological operations have been separated
from residential areas by planning restrictions and that would continue. But the
approach has crept, tending to drive out small engineering shops, light industry
and cottage industry activities.

Controlling effluents
It may be prudent to retain some controls on un-neighbourly operations but the
original common law approach may be sufficient: controlling effluents (including
noise) from one persons tenancy onto anothers rather than controlling use.

Built-in compensation
With the different functioning of land values and taxation, those living next to
antisocial uses would be compensated through the tax system and conversely
those like artists seeking lower rents would have options.

17

Privacy threshold
Rules against overlooking have become draconian in towns, such that desirable
properties and streets in Kensington and Chelsea and Westminster could not be
built today under present guidelines. External terraces and balconies are being
driven out.
It is an irony of our age that we share more of our lives online while becoming
allergic to being seen by neighbours.
This city will favour balconies, terraces, habitable green roofs and outdoor
amenity spaces of all sorts (within reason). In seeking city centre densities
familiar to Paris, Rome, Venice and Westminster lower thresholds of privacy will
be expected. Balanced by a robust approach to policing nuisance.

Style + materials: innovation with unity

Policy will eschewing constraints that can so easily fall under brief fashion
trends, modernist orthodoxy or a retreating into nostalgic historicism. It will be
markedly liberal on style and with encouragements for self build the town will be
distinguished by its diversity.
Nevertheless a neighbourliness will be expected in design and strict limits on
materials will be applied. This will establish a degree of consistency to the town
that is one of the appeals of for instance the pan-tiled rooftops of Florence or
the dry stone walls of Yorkshire hill towns.
All buildings will be required to use the local masonry (brick or stone) together
with new materials such as cast glass. Speciallist proprietary materials like
Kalwall, Glulam or others may be given favoured status and licensed. Materials
that are unavoidable such as steel and concrete may be subject to appropriate
restrictions. Designers are willing to work within constraints: it is notable for
instance that the flowering of Islamic geometry arose out of constraints on
representation of natural forms.
Hand-work will be more feasible due to the operation of the economic model.
The aim is to leave scope for the widest design diversity subject to quality
controls but to ensure the town has a consistency and coherence that is
notable.

The garden city ideal

40% of the land area will be allocated to green space and public functions. Of
the built-up balance 1/3rd will be earmarked for non-residential uses. The town
centre or central business district will have 50% flats typically in 3 storeys over
retail, public squares etc

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Section 4: location
the location will be selected by a bid process but in the
interest of popularity and efficiency the efficient use of
existing infrastructure it should meet some basic criteria.
This section sets out:
-

Primary location selection criteria for a regional level 1-6

Secondary location selection criteria at a local level 7-9

An illustration of a location and some applications

Location selection criteria

1. Within 20 miles of a demand red zone, not Green Belt
The new town must be near high demand, high value regions, otherwise instead
of relieving pressure it risks diverting resources from existing centres in need of
population and regeneration. High-value regions promise best returns to fund
infrastructure but tend to be most resistant to development. Lower value islands
in or near high value regions are ideal. Bucks/Beds was selected but the
demand criterion would apply equally to Essex, Kent, Wiltshire and East Dorset.
For popularity, safer to avoid urban green belts. The London Green Belt extends
a zone over 7400sq kms, 42% of the red zone.

2. Within 5 miles of a motorway

Good existing road and rail links are necessary as it is costly and inefficient to
create new ones.

3. Railways preferably two lines within 1 mile

Existing stations are only ever in existing population centres but a new one could
be built providing the primary infrastructure is within reach.

4. Capacity
As well as proximity, roads and railway lines must have spare capacity.

5. Avoid areas of outstanding natural beauty.

6. Water, flood risk & canals.
There should be a water supply or reasonable prospect of a canal solution.

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7. Meeting needs for the existing community

In the Southeast (where demand is highest) development is typically opposed
even when new roads proposals are included to relieve traffic. It needs to bring
benefits, deliver local aspirations and solve local problems. Communities
objecting to developer-led proposals may have something to gain as the Trust
model empowers them to shape development in their area. Relief of flood relief
or water stress may be an option.

8. Local criteria
Brownfield land is ideal if restoration costs are not prohibitive.
Avoid engulfing existing villages or connecting up towns into a conurbation.
Avoid engulfing or adversely affecting Sites of Special Scientific Interest, Nature
Reserves, National or Local Parks, Scheduled Monuments or Heritage Sites.
Preferably within 3.5 miles of a motorway junction but >1mile to minimise noise.

9. Nice to haves
Near a university if available, especially one not already associated with a town
Near an airfield
Hills and level changes provide opportunities.
Existing local industry, employment, power and waste facilities.
Proximity to cultural, heritage, landscape and leisure amenities.

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Location illustration: Marston Vale

The above criteria applied to a provisional location for the
purpose of illustration.
1. The illustration location is 15 miles outside the Zoopla Heat Map red zone in a
hollow between higher demand zones to Oxford and Cambridge on either side.
2. It is 2 miles outside the London Green Belt and 2 miles from the M1 J13, 40
miles from central London and on the A421 dual carriageway to Milton Keynes
and Bedford.
3. Marston Vale Line passes through the middle in a cutting and Midland
Mainline nearby with future proposals for the Vale line to be extended to become
an East-West link between Oxford and Cambridge.
4. Capacity: Central Bedfordshire Strategic Plan says:
E-W Rail improvements will create enhanced accessibility to Milton Keynes and
the West Coast Mainline. A421 will have been dualled, and M1 widened
between J10 and 13 and the Ridgmont Bypass/Woburn Link provided reducing
congestion. The A6 will be dualled, between A421 and Wixams.

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5. The area is several miles north of the Chilterns AONB.

6. No flood risks. The location is on the intersection of proposed Bedford and
Milton Keynes canal proposed to connect the Norfolk Broads to the Grand
Union Canal and the Aecomm Natural Grid North-South canal proposed to
relieve water stress in the Southeast. The town could fund Sections J and K of
the B&MK canal delivering Internal Drainage Board aim to link Brogborough and
Stewartby lakes and the dramatic Falkirk Wheel type engineering solution to the
30m step up to Fox Cove. The Falkirk Wheel attracts 400,000 tourists annually.
The B&MK canal can be used to deliver bricks for construction from Stewartby
and the NS canal glass blocks from Nazeing. Hydro-electricity generation may
be possible at Fox Cove.
7. There are minor local issues of traffic, surface water and rail service locally but
no significant problem that the town could solve. The development would
strengthen the case for reinstating Ampthill station on the Midland Mainline.
Under the EcoTowns programme in 2009 local residents objected to a London
based owner developer OHPs 15400 home new town proposal. The Trust
model would secure the site against OHPs overdevelopment putting it under
the control of the local community.
8. The John Bunyan trail skirts the outside of the town. In Bunyans time the
route would have been around a woodland as shown on the Saxton/Kip
Bedford Comitatus map of 1637.
The location is a former brick pit area with effects of the industry still visible.
Some have been turned to advantage and flooded to produce lakes. Some of
the land is brownfield. A forest town plan would commit dozens of acres to
woodland surrounding the town, making a substantial contribution to a local
project the Forest of Marston Vale plan and create a surrounding buffer zone
separating Brogborough (pop 340) and Lidlington (pop 1140) from the town,
and serving as an acoustic baffle against the M1.
One edge of the town would engage Brogborough Lake. A surrounding range of
ridges are arrayed like a Roman amphitheatre with views over the lake.
Existing waste facilities and landfill sites exist nearby and Rookery Pit 5 miles
away is proposed to be developed into a 55MW renewable energy plant by
Covanta. Employment: Marston Distribution Centre is adjacent with an Amazon
warehouse, Millbrook Proving Ground, Millbrook Golf Club and, Centre Parcs
are within 3 miles.
9. Cranfield University, known for its Business School, lies 3 miles north, linkable
by the Pod. This would become the nearest town to Cranfield (Cranfield village
pop 5000, Marston Moretaine 4000 3 miles, Wootton 4000 5 miles).
Cranfield has an airfield and technology park.

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Section 5: delivery, popularity, viability

This section describes:
5.1 Governance
5.2 Delivery: stages
5.3 Popularity
5.4 Economic viability: the numbers

5.1 Governance
From Trust to Borough Authority. The ultimate aim of the
governance model would be to evolve into a fully
participatory level of government.
The Trust can be modelled on the Letchworth Heritage Foundation (30
governors elect 9 trustees + county councillor). The model has evolved and
designed to be proof against the corporate takeover that threatened in 1961.
There may be benefits in it being an ALMO (Arms Length Management
Organisation) part of government, from the outset.
For the purposes of local taxation the Local Authority remains the Collecting
Authority and the Trust will be the Precepting Authority as provided in the
existing model. Subsequently it should develop into a City or Borough Authority
within the democratic system, when feasible.
A secure governance model can include elements of direct democracy,
representative democracy and appointment.
The economic model provides for significant and diverse local infrastructure
packages to be offered to the electorate each with a business plan built on
projected land values offering real choice and the benefits of growth in
perpetuity to local people. Local democracy will be invigorated and then choices
can be arbitrated through the democratic process.
This will transform local democracy which generally in Britain faces voter apathy
because the majority of local spending is determined at national level and so
local elections have become just a confidence vote on the performance of
Westminster.
The democratic brake currently operating against new house building through
the planning system would be unlocked as residents would get exposure to the
upside of population growth, not just the downside of development in their
backyard. [ref O M Hartwich Bigger Better Faster More]

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Local Authority involvement

The success of NW Bicester Eco Town compared to the objections faced by
Weston Otmoor on the other side of Bicester suggests that Local Authority and
NGO engagement is instrumental to reassure local people that proposals are
not motivated by private gain at the expense of wider interests.

Bid model
The illustration location has its merits measured against rational selection criteria
but is intended mainly to show an approach and application of principles to
particular circumstances. Circumstances are always unique and have a major
impact on how the plan should develop. Any location in the Southeast will face
opposition from residents who prefer to see no form of urbanisation, increased
traffic or loss of farmland.
To address this popularity problem it is proposed to launch a public competition
in which the town is built where locals want it and bid for it. The approach works
for: the City of Culture award, Enterprise Zones and grants of letters patent for
City status.
As with those examples, existing local governance structures may be
instrumental in preparing the bid and would provide some of the members for
the Trust once formed.
At local level, an aspect of the approach could derive from the Business
Improvement District model in which local businesses (in this case affected
landowners) would be invited to support the bid. The Enabling Act would
provide that if a majority either by number or by hereditament value vote in
favour then the others are bound by the vote.
Because the model would work equally well in lower demand areas to generate
growth, and because such growth would point the way to reducing pressure on
the Southeast by addressing one of its causes, we believe that the spirit of the
brief would still be met if the strongest bid came from outside the Southeast.
Subject to the fudges endorsement therefore entrants would not be limited to
high demand locations.

Enabling Act
A brief list of elements requiring primary legislation.
Compulsory purchase at agricultural value and exclusion of overage clauses.
Suspend operation of the Leasehold Reform etc Act 1993 right to enfranchise,
individually for single dwellings and collectively for apartment blocks.

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Land under government control if available. Revise any Treasury requirement or

fiduciary duty to achieve maximum sale price in favour of longer term public
benefit.
Powers devolved from Local Authority. Rebasing NNDR on land only. Zeroing
Council Tax may be permissible within existing rules.
Bid model: imposition by majority vote by number or hereditament value.

Local banking
A number of financial instruments or specialised products will be required which
would benefit from the existence of a specialist local bank. Germanys regional
banks could be looked at as a model.
Raising finance for CPOs and keeping the debt local?
Future land value rises as collateral for investment through normal channels.
Exploring options for direct Central Government interest free financing.
Potential for waiving of initial CPO if the Trust were an ALMO (Arms Length
Management Organisation) of government and the land asset is on the
Government account offsetting the cash expenditure.
Potential for a local currency
Credit for local SMEs and implications of leasehold model on land as collateral.
Secondary market in fixed rate options for households or firms that want
certainty in the face of variable rate leases
Self build mortgages

5.2 Delivery stages

Target population 21,500, area 450ha + 50ha forest. 40%
green and public land Average net density 44dph/ha,
120dph net in centre, 30/ha in suburbs.
1. Enabling legislation
2. Set up development corporation (Trust) shell
3. Location selection bid process
4. Add local delegates to Trust
5. Compulsory purchase land
6. Develop urban plan and process
7. Tender process for enabling works contracts

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Build/development stages
It is important that each stage is a self sustaining, complete whole. Accordingly
Phases 1 and 2 deliver the essential elements of a self-sufficient and viable small
community ie. a well-endowed small village. School, post office, pub and
village green, including facilities for community engagement supplied by the
School.

Much of the later stages of development can be lead at least in part by the
private sector. Many urban services such as banks, estate agents, cinemas etc
will be delivered by the market on well-tried principles of laissez faire.

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5.3 Popularity
The preceding sections all contribute parts to a package intended to win
acceptance from a local community. Somewhere! We do not underestimate
how difficult that challenge is. We believe the economic model in itself would
achieve wide popularity if fully understood but it is technical and needs to be
seen to be widely appreciated.
However it is supplemented by a comprehensive package:
Economic and governance models putting ownership of community created
value in the hands of local people in perpetuity and eventually giving them
control.
A growth model delivering employment and higher wages.
Exciting landmark projects.
An invited bid so that local people can make their own choice.
Generous CPO: we adopt the 3x multiplier suggestion in the brief although we it
is not intended to be effective on its own. Stuff their mouths with gold was
Bevans vulgar claim for how he persuaded doctors to accept the NHS. An ugly
but memorable phrase, and with an ugly ethic that imputed venal motives to
good people. Will 3x CPO persuade owners to support the process? Or will they
be seen by neighbours as sell outs?

Ultimate measure of popularity

The ultimate measure of popularity will be among a constituency that does not
yet exist. If you build it, will people and businesses come? Population growth will
measure popularity and success. People wanting a better life.
It should lead to rising land values as another measure.

Immigrants: higher wages, cheaper houses, good school

The proposal has all the elements to attract the needed population based on
essentially the same principles that attracted European immigrant to America:
higher wages and low rents. Today the two main drivers for families to relocate
seem to be employment and a good school.

Popularity and rising house prices

Many people set their hearts on rising house prices as their route to prosperity
or a form of pension. A scheme promising to remove speculation and stabilise
the land market may not gain immediate popularity with that group.
All that can be said is that however long the run has been of rising land prices, it
is a false Ponzi scheme funded by new entrants and will top out at the latest
when population growth levels out; or it is a con on many young people who

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have been educated into believing in it. Those who cannot see an alternative will
stay away, but the benefits should attract those who have already recognised
they are far from getting onto the ladder and who want to prosper through their
own effort and enterprise.

Aspiration to be mortgage free after 25 years

On this model, houses can be paid off and owned in the usual way but the land
would not be.

Artist colonies
Grayson Perry in his 2013 Reith lecture described how in Hoxton, Shoreditch
and elsewhere artists were attracted by low rents and create communes and
they attracted young professionals (also attracted by low rents) eventually
regenerating run-down areas.
Perhaps we should not need to attempt to manufacture this (as with schemes
that claim to pursue regeneration through culture) but the essence is low rents
at the margin. The rest follows organically.
Even so a PR drive to attract artists would be a good thing. Benjamin Brittens
adoption of Aldeburgh put it on the map and started a new culture. Later he
said My music now has its roots in where I live and work Snape Maltings 1967

Basket of goodies
If invited to the second stage we will review the several technologies and new
era proposals that might be incorporated. Appeal to idealism / package of green
measures / direct approach to related organisations.

Popularity for businesses

Enterprise Zones are designed to attract businesses. Compared to the existing
24 EZs this proposition offers:
Better tax breaks. Permanent NNDR exemption instead of capped reduction for
5 years
Lower employment costs. Reduction in IT/ENIC making employment generally
cheaper, favouring especially labour-intense industry and facilitating high-skill
industries to pay higher wages and attract better talent
Low rents at the margin.
Enhanced Capital Allowances would not be proposed. 25m+ capital
infrastructure improvements funded by central government would not likely be
available but some low cost credit may be able to be offered if a local banking
model was built. There is no reason why Central Government, Regional or EU
grants would not be won but the principles of this proposal are not built on grant
seeking.

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5.4 Economic viability: the numbers

Lower payroll cost, higher wages
Andy Wightman calculates that a Land Value Tax has the potential in the long term
to contribute around 25% of total public expenditure. Current estimates indicate that
the value of land is 1,841bn across the UK, which would raise 110bn at 6%.1
The proposal in this submission uses a variant of Land Value Tax to offset
Council Tax and NNDR. In 2013 they raised 27bn each, or 54bn combined.
The benefits of taxing land in place of labour
Fiscal Boost:

Income tax and National Insurance totalled 262bn in 201314, the surplus from land value taxation could, at a national
level, be used to lower income tax and national insurance by
20%.

Economic
Boost:

Land Value Taxation is a more efficient tax. The amount of

land available for use remains the same. However, the annual
rental value would act as a price signal ensuring best use of
the land.
Lower taxes on labour would increase employment and boost
enterprise.
Benefits such as higher employment provide a social boost. In
addition to this, a proportion could also be set aside to pay for
inspiring public works (Church, Canal and Pods), community
improvements (schools, teacher salaries), and charitable and
community projects (rehabilitation).

Social Boost:

The estimates present a conservative view of what this new economic model
could achieve. If shortlisted, we would seek to estimate the secondary benefit of
boost in economic activity, tangible social impacts and public service savings
through lower unemployment.
Basing estimates on national figures, the city would use half of the revenue
generated from annual land value capture to pay the Local Authority in place of
Council Tax and NNDR. A portion of the additional income would support
maintenance and improvements to the town and administration of the Trust. The
remaining leasehold income would be used to offset taxes on labour.
The table below shows the income raised from the land as the town grows, and
how it would be spent.

1 Andy Wightman, A Land Value Tax for England, para 53; HM Treasury, Budget 2012, pp7-8

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Annual rental value rises for two reasons, firstly because the Trust releases more
land and secondly because land values increase as infrastructure is completed
and the town grows.
There is a case for infrastructure (schools, hospitals, maintenance) to be funded
from general taxation as usual. However, 10% of the budget is allocated for this
purpose. By the time it becomes a town, more income is generated for public
works and infrastructure than their annual cost, and Tax Credits can be more
generous using remaining funds to increase payments to the Local Authority,
(lowering local taxes in neighbouring towns) or subsidising the development of
public infrastructure, accelerating and improving development and supporting
additional inspiring public works projects.
This leaves 40% of leasehold income, or 22.6m each year. Based on national
figures, this is estimated to fund a rebate of 16% of Income Tax and NIC paid
out by employers.
The table below shows the impact direct taxes on labour have on payroll cost.
Indirect taxes also have an impact, reducing the value of real wages further.

A 16% reduction in IT and NIC would, we estimate, reduce the cost of labour to
employers in the city by 5.7%. This would boost enterprise and increase wages
and employment.

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