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Last Tuesday, behind closed doors at the communities department, one of the most contentious battles in construction was being thrashed out. On one side were local council planners, fighting to retain the freedom to set carbon emissions targets for new developments; on the other were housebuilders and developers, sick and tired of the postcode lottery this has created.

This dispute cuts to the heart of every development in the UK. Architects, QSs and contractors alike have been grappling with the difficulties of generating power on site for several years now, with planners making increasingly complex demands.

The meeting, attended by the great and the good of the planning world, was billed as a 鈥渟ounding board鈥� 鈥� part of the consultation on the draft planning policy statement on climate change, which fuelled the anger of developers when it was launched last December. Developers were livid that it seemed to give councils the power to demand energy contributions from on-site renewables.

鈥淎 proliferation of targets will harm our ability to innovate, test, prove and deliver in the numbers we need to,鈥� fumed Stewart Baseley, executive chairman of the Home Builders Federation (HBF). 鈥淲e need local authorities to keep to the Code for Sustainable Homes timetable.鈥�

The row has even made the national press. Last Monday, the Guardian proclaimed the end of council-set renewables targets; the next morning, the Daily Mail quoted 鈥淲hitehall sources鈥� saying green energy would be made compulsory for new homes.

It was clear the civil servant chairing the meeting had a difficult job to do, but when the participants emerged at 4pm on Tuesday, the mood was calmer. Had the communities department found a solution to suit everyone?

The battleground

The biggest bone of contention between local authorities and developers is the so-called Merton Rule. In 2003, Merton council began insisting that all new developments in its borough generate 10% of energy from renewable sources. More than 150 authorities followed its lead.

We鈥檙e all trying to get to the same place. The communities department will have to ascertain where that is

Rob Shaw, TCPA

Councils argued that they should be allowed to decide which environmental strategy suited their borough best and that such targets were milestones on the way to the government鈥檚 target for all new homes to be zero-carbon by 2016.

Adrian Hewitt, environmental officer at Merton council and instigator of the original rule, said setting a 鈥渕odest鈥� 10% target allowed local authorities to explore the technology available: 鈥淚t allows them to be innovative, and with innovation comes a competitive edge. Without it, innovation could be stifled.鈥�

The councils certainly got into the spirit of competition. The Town and Country Planning Association (TCPA) published a survey last July showing that no fewer than 42 different targets had been imposed by 212 authorities. Another 60 boroughs had policies in draft form 鈥� and this survey was carried out before Yvette Cooper, the housing minister, publicly encouraged councils to set their own targets.

Cooper made the announcement in June last year, to the annoyance of developers who complained that the patchwork of conflicting local initiatives was causing chaos. They claim that allowing local authorities this power is destabilising the roll-out of the 2016 pledge. 鈥淭he 2016 commitment is the best approach,鈥� says Andrew Whitaker, head of planning at the HBF, 鈥渂ut some local authorities are taking a 鈥榞reener-than-thou鈥� attitude and speeding up the commitment.鈥�

Since the meeting, however, housebuilders have taken a milder tone. They are certainly not against renewable energy sources, Whitaker says. And the HBF agrees that local authorities should be allowed to set flexible sustainability targets. 鈥淚f councils follow the legitimate planning process, then that鈥檚 fine and correct,鈥� says Whitaker. The worries begin, he says, when councils force their targets through supplementary planning, without conducting proper research or risk assessments. 鈥淐ouncils should have to justify why and how they are doing things through the proper process,鈥� he says.

Indeed, most local authorities are keen to do things properly. Woking council, for instance, introduced its progressive green strategy through the proper channels. 鈥淲oking has the evidence base to support its political stance,鈥� argues Whitaker. 鈥淥thers don鈥檛.鈥�

Hewitt is concerned about people piggybacking on the principal to introduce unrealistic targets, too. 鈥淏ut we shouldn鈥檛 kill the Merton Rule because of them,鈥� he says.

Manchester is cited by some as a council whose renewables policy is too ambitious for its housebuilding programme. Its Green City plan says developers should aim for at least 20% of energy to be met by on-site renewable technologies. 鈥淲e set ourselves a target to be the greenest city in Britain, so we wanted to go beyond best practice,鈥� says Laura Needham, project officer of the Green City campaign. 鈥淲e have more urban areas and more development than many other areas and, consequently, more opportunity for building integrated renewables. We feel the levels can be pushed.鈥� The reaction from developers has been 鈥渕ixed鈥�, she adds.

We all want to use less carbon-intensive energy, and industry should be left to figure out how to do this

Liz Peace, BPF

Rob Shaw, policy director of the TCPA, says the original planning policy statement wasn鈥檛 clear enough on how planning laws and low-carbon policies should be brought together. He claims it was woolly and needed refining. 鈥淩enewables policies need to fit into the planning system,鈥� he says. 鈥淲e don鈥檛 want to protect the Merton Rule just for the sake of it.鈥�

Liz Peace, chief executive of the British Property Federation, said: 鈥淭he Merton Rule is too constricting 鈥� our industry can achieve more than x% on-site renewables. They are only a tiny part of dealing with climate change. We all want the built environment to use less carbon-intensive energy, and industry should be left to figure out how to do this.鈥�

So, what does the government think? A source close to the developers says: 鈥淭he government wants to relax Merton鈥檚 rule 鈥� not scrap it. It realises that you can鈥檛 have a 鈥榦ne-size-fits-all鈥� policy, because it depends on so many variables.鈥�

The government evidently wants local authorities to have control over their targets. 鈥淚t would be madness for us to weaken local authorities鈥� ability to do that,鈥� says a communities department spokesperson. 鈥淏ut we want to them to work with developers.鈥�

Neither is the communities department dropping renewable energy targets: 鈥淐ouncils will be required to deliver more ambitious carbon-saving measures and set tougher renewables targets as we move towards a zero-carbon culture. Our reforms are about greater use of renewable energy, not less.鈥�

The question now is how to get there. The original planning policy statement is being refined and a planning bill will be unveiled early next year. The department now has to ensure everyone is happy with the outcome.

鈥淲e鈥檙e all trying to get to the same place,鈥� says Shaw. 鈥淭he communities department will have to ascertain where that is, and weave a path between us to get there.鈥�