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Disconnect between housing and infrastructure puts South East at threat

Long-term growth in South East England could be jeopardised by a chasm between housing delivery and infrastructure provision, according to global integrated infrastructure services firm AECOM and Kent County Council.

The organisations have identified a £2 billion funding gap in Kent and Medway alone between secured and expected funds and the infrastructure required to support the delivery of new homes between now and 2031. They are calling for fresh thinking across the South East to address region-wide infrastructure and housing challenges.

Greater collaboration between district authorities would enable counties in the South East to understand how investment in infrastructure could deliver growth in their region and where the greatest impact could be made. It would also help avoid large-scale housing developments where no infrastructure funding has been secured or planned.

A region-wide vision would enable the South East outside London to become a functional economic region – a model similar to the Northern Powerhouse.

Infrastructure funding gaps are a region-wide problem and not unique to Kent, according to AECOM and Kent County Council. Failure to address the issue could not only stifle growth across the South East but also curtail the additional economic benefits that arise from the increasing interdependency between London and its surrounding counties.

Both organisations are therefore calling for a revised, more joined-up approach to growth, with new housing built in line with infrastructure investment and development.

The analysis is published today (Thursday 5 November) in the Kent and Medway Growth and Infrastructure Framework (GIF), which was prepared by AECOM for Kent County Council in partnership with Medway Council and Kent’s 12 district and borough councils. 

Infrastructure is crucial to a thriving economy, yet current approaches for delivering growth, such as the Local Plan system and Community Infrastructure Levy, can limit the ability to take a strategic approach. AECOM and Kent County Council argue that housing and employment opportunities should be more closely aligned with the infrastructure needed to facilitate this growth.

Greater collaboration between district authorities would enable counties in the South East to understand how investment in infrastructure could deliver growth in their region and where the greatest impact could be made. It would also help avoid large-scale housing developments where no infrastructure funding has been secured or planned – a factor that directly limits economic growth in the South East.

“The GIF is an incredibly exciting opportunity for us to set the terms of the agenda for infrastructure in Kent and Medway with government and the private sector. It tells a sobering story about the challenge we face in delivering the growth to which the 12 districts aspire, but it also gives us a unique chance to do something about it," said Kent County Council leader Paul Carter.

“The growth challenge we face in Kent and Medway is significant – to deliver the approximately 160,000 homes and over 135,000 jobs that local authorities are planning across the area to 2031, there is a £6.74bn bill for infrastructure, of which £2bn is unfunded. The resulting infrastructure challenge is one that we face collectively across local authorities, the development industry, our communities and national government. 

 He went on: “The solution to this challenge will not come from the public sector alone, nor can we simply expect to get all of this from the industry; rather we need real innovation in how we work with the private sector and government to get the most out of the resources we have, whilst introducing new ways of leveraging funding and capturing value from development.

"With the GIF and our 10 point action plan, we will be working with industry, public sector and communities to create the best opportunity for quality communities across Kent and Medway into the future.”  

Tom Venables, director – design, planning and economics, at AECOM, said: “The South East is facing multiple challenges that have the potential to limit economic growth in the region. Capitalising on the region’s unique relationship with London could help it become an influential economic powerhouse in its own right.

"For this to be achieved, the region must facilitate growth through new, joined-up approaches that connect housing provision with infrastructure investment. As a responsible, progressive council, Kent has recognised the scale of the challenge. Publication of the GIF is an important first step towards realising the county’s growth and economic potential.”

In addition to improved collaboration at a county level, AECOM and Kent County Council are calling for joined-up thinking across the South East, with local authorities and the private sector coming together to address region-wide challenges in infrastructure and housing. Cross-county connectivity through improved radial routes, as well as better links with London, would bring prosperity out of the capital and support strategic growth across the wider South East region.

Both organisations argue the current ‘Duty to Co-operate’ across local authority boundaries is not working. There is a pressing need for authorities and the private sector to proactively collaborate in order to stimulate growth. AECOM and Kent County Council are also calling for the inextricable link between housing and infrastructure to be better recognised at a national level. They consider the omission of large-scale housing delivery from the remit of the newly formed National Infrastructure Commission a missed opportunity.

Kent and Medway Growth and Infrastructure Framework

The Kent and Medway GIF, believed to be the first of its type in the UK, provides a snapshot of planned growth and its required supporting infrastructure across Kent between now and 2031. As well as a framework for identifying and prioritising investment in infrastructure, the GIF recommends actions that will help Kent County Council work towards solutions to the likely £2bn infrastructure funding gap.

This figure was identified through analysing the costs of the infrastructure required to support the delivery of new homes in Kent up to 2031 compared with the identified secured funding and potential funding from public, private and developer contributions.

Kent will need 158,500 new homes to meet planned growth up to 2031, which is an average of 7,925 per year. Yet between 2003 and 2014 the average number of homes built each year in the region was 6,076, and only 4,208 built in the 2013 - 14 period.

In addition to the 158,500 new homes required, in the same 2015-2031 timeframe the region’s population will grow by nearly 300,000, requiring 135,800 new jobs.

The GIF outlines the range of infrastructure required to support the delivery of this growth, from social infrastructure to transport, utility networks, open space and flood protection. Securing investment to fund this infrastructure will be fundamental to Kent’s ability to meet expected growth over the next 16 years.

Recommendations to help fill the finance gap include exploring innovative ways of funding infrastructure, such as Tax Increment Financing (TIF) and bonds.

The GIF is designed to help authorities in Kent and Medway understand the scale of the challenge they face in delivering and funding growth in the region, outlining the key initial steps they should take to tackle the issue. The GIF was developed in partnership with Kent’s 12 district and borough councils and will also support the work of the Kent and Medway Economic Partnership, which drives economic growth across the region and is one of four partnerships that make up the South East Local Enterprise Partnership.

The GIF was published today and is available on Kent County Council’s website

If you would like to contact Jackie Whitelaw about this, or any other story, please email jackie.whitelaw@infrastructure-intelligence.com.