Local Plan Interventions

As set out in his 16 November 2017 written ministerial statement, the Secretary of State for Communities and Local Government has written to 15 local planning authorities (Basildon, Brentwood, Bolsover, Calderdale, Castle Point, Eastleigh, Liverpool, Mansfield, North East Derbyshire, Northumberland, Runnymede, St Albans, Thanet, Wirral and York), indicating that they have “the opportunity to put forward any exceptional circumstances, by 31 January 2018, which, in their view, justify their failure to produce a Local Plan under the 2004 Act regime.” He will then make a formal decision as to whether formally to intervene in their plan-making. 
His Bristol speech on the same day says this:

“…today is the day that my patience has run out.

Those 15 authorities have left me with no choice but to start the formal process of intervention that we set out in the white paper.

By failing to plan, they have failed the people they are meant to serve.

The people of this country who are crying out for good quality, well-planned housing in the right places, supported by the right infrastructure.

They deserve better, and by stepping in now I’m doing all I can to ensure that they receive it.”

Will this be another empty threat or this time will we actually see some action? Back 20 July 2015 the then minister for housing and planning, Brandon Lewis, announced in a written ministerial statement:

In cases where no Local Plan has been produced by early 2017 – five years after the publication of the NPPF – we will intervene to arrange for the Plan to be written, in consultation with local people, to accelerate production of a Local Plan.”

There was then the February 2016 technical consultation on implementation of planning changes which included within its chapter 6 the Government’s proposed criteria for intervention, namely where:

* the least progress in plan-making had been made;

* policies in plans had not been kept up to date;

* there was higher housing pressure; and

* intervention would have the greatest impact in accelerating local plan production.

Decisions on intervention would be informed by the wider planning context in each area (specifically, the extent to which authorities are working co-operatively to put strategic plans in place, and the potential impact that not having a plan has on neighbourhood planning activity).

The Government confirmed in its February 2017 housing white paper that these criteria would indeed be adopted. 

The February 2016 technical consultation proposed that authorities identified for potential intervention would be given an opportunity to set out exceptional circumstances why that should not happen:

“What constitutes an ‘exceptional circumstance’ cannot, by its very nature, be defined fully in advance, but we think it would be helpful to set out the general tests that will be applied in considering such cases. We propose these should be: 

• whether the issue significantly affects the reasonableness of the conclusions that can be drawn from the data and criteria used to inform decisions on intervention; 

• whether the issue had a significant impact on the authority’s ability to produce a local plan, for reasons that were entirely beyond its control.”

We can assume that those 15 authorities will now be looking very carefully at this passage. 

A political decision to intervene is one thing but what would then be the legal process to be followed?

The Housing and Planning Act 2016 amended the default powers of the Secretary of State within section 27 of the Planning and Compulsory Purchase Act 2004, so that it read as follows:

Under section 9 of the Neighbourhood Planning Act 2017, the Secretary of State can now also order the preparation of joint development plans, giving him a further option in the case of interventions, particularly as he “may apportion liability for the expenditure arising on such basis as he thinks just between the local planning authorities for whom the document has been prepared.”
Of course the practicalities are quite another thing. How is the Government actually going to go about the intervention process? Preparing the document centrally, directing an adjoining authority to take the lead or parachuting in civil servants or consultants to carry out the work (all at the cost of the authority) is surely always going to be a last resort. The process is likely to be locally unpopular, prone to error and obviously liable to litigation. Authorities may also trip over themselves in their belated haste. However, surely after the end of January a few authorities are bound to be identified, pour encourager les autres. 
So how have these authorities found themselves in this position? Here’s just a flavour:
Basildon
Yellow Advertiser (20 April 2017):

“Tory chief Phil Turner has suggested calling in independent analysts to go over the plan, which allocates land for development across the borough until 2034. 

Cllr Turner said he hoped to ask experts to go over the plan’s policies on green belt and infrastructure. 

He said he hoped the move would help him cut the number of planned houses in the borough, which currently sits at 15,260.

He said: “We can’t review the whole plan but those two points are areas where we think there may be opportunities about reducing our housing numbers. 

“During the consultations, we’ve had a lot of feedback about how people don’t think we are working hard enough to to save the green belt. We don’t want to build on the green belt and we have avoided it as much as possible but I don’t think the public actually believes us.

“So what we are thinking is we should call in some independent people to scrutinise the plan and tell us where we can maybe use the evidence to put up an argument to challenge the housing numbers.”

Cllr Turner was due to present the proposal to all councillors in a secret meeting last night. 

If approved, he said the process could cost a six-figure sum and take up to six months.

Brentwood
Largely green belt authority. Prolonged delays.  

Bolsover

Local Plan withdrawn after it failed examination in 2014. Failure to co-operate with North East Derbyshire District Council and Chesterfield Borough Council with regard to a strategic development site. 
Calderdale

Brighouse Echo (17 November 2017):

 “Councillor Scott Benton, Leader of the Calderdale Conservatives, said: “‘The draft Local Plan published by the Labour Council administration has caused great concern throughout the different communities of Calderdale.

“The Labour Party have clearly been taken aback by the scale of the opposition to their plans and instead of meeting their target of producing a Final Plan in December, they have announced that they are now kicking the issue down the road again until after the elections next summer.

“‘Labour’s first attempt at producing a draft Plan was a disaster. Instead of working with residents and other Councillors to produce a Plan that is fit for purpose they have delayed the process until after elections. This makes a mockery of our local democracy and demonstrates why Calderdale requires fresh leadership.”

Castle Point

Local Plan failed examination in April 2017 – failure adequately to assess housing need, and failure to cooperate with neighbouring councils.
Eastleigh
Eastleigh News (16 November 2017):
“In February 2015, Eastleigh had to go back to the drawing board after its first Local Plan was rejected by the planning inspector because, he said, it didn’t plan for enough new homes – in particular new affordable ones.

On December 11 the council will meet for a crunch vote on their new Local Plan and the council’s preferred options of housing development on land North of Bishopstoke and Fair Oak (Options B and C).

There has been fierce local opposition – not just from the residents most likely to be affected by the development of 5,000 new homes but also from residents close to the route of a proposed M3 link road that will stretch across countryside from Upham to Allbrook.

So far this year three councillors have stood down from the ruling Liberal Democrat group to sit as Independents because of their concerns over the direction of the local plan.

It is likely they will join the opposition Conservative group on December 11 in voting against the council’s favoured options – though this is unlikely to prevent their adoption.”

Liverpool
Prolonged delays. 
 Mansfield

Mansfield 103.2 (17 November 2017):

Hayley Barsby, Interim Chief Executive at Mansfield District Council, said: “We are disappointed to have been named as one of the 15 local authorities.

“We are confident that while we don’t have an up-to-date Local Plan that this hasn’t affected development in the district.

“Mansfield District Council is committed to bringing forward house building – this is demonstrated by the council supporting the Berry Hill development (formerly known as the Lindhurst development) which will create 1,700 new houses for the district.

“Of the 9,024 new homes we need to provide by 2033, planning permission already exists for 4,147.

“Over the past 12 months we have worked hard to bring forward the Local Plan and during this time we have been mindful to undertake feasibility and consultation to ensure it reflects not only the needs of the district but also the views of our communities.

Following an initial consultation in early 2016 on the draft Local Plan, we received 1,477 comments which were then reviewed to ensure the plan is fit for purpose up to 2033.

The council reviewed its position and prepared a new vision and objectives. These have been used to create alternative options for the delivery of sustainable housing and employment to meet future requirements. 

A Preferred Options consultation took place in October and November 2017.”

North East Derbyshire
Derbyshire Times (18 October 2017) quotes the Labour leader of the council in response to criticisms from the local (Conservative) MP:
“We are well aware of the need to protect the character of our area and have done all we can to do this, however the Government’s expectations and targets for housing place significant pressure on our ability to continue this.” 

He added: “As such we’d welcome any moves by the MP to seek a revision to Government policy so that the expectations for north east Derbyshire are realistic and in keeping with those of our residents.”
Northumberland

Northumberland Gazette (16 November 2017):

 “Northumberland’s Local Plan, a key document which details where development should take place, is not likely to be adopted until 2020. In the summer, the county council’s new Conservative administration withdrew the Local Plan Core Strategy – put together by the council’s Labour group before losing the county election in May – to review a number of aspects of the document, primarily due to concerns that numbers for the proposed level of new housing were too high.”

Runnymede
Local plan failed examination in 2014 due to failure to meet housing needs and failure of duty to co-operate. 
 St Albans

Local Plan failed examination in 2016 due to failure of duty to co-operate, council’s subsequent challenge to that decision failed.
Thanet

Prolonged delays but Regulation 19 consultation anticipated in January 2018. 
 Wirral

Wirral Globe (16 February 2017):

Wirral Council’s leader is preparing for battle with Whitehall over plans that could force the authority to turn green belt land into a housebuilding free for all.

The Government has ruled Wirral must produce a blueprint demonstrating how it will hit a target of building nearly 1,000 new homes each year over the next five years.

That’s 500 more than the present annual number.

Councillor Phil Davies says he is adamant that he will not sanction the release of green belt land – and has written to communities secretary Sajid Javid urging him to reconsider.”

York
Prolonged delays. 
York Press (16 November 2017):
City of York Council’s Conservative and Liberal Democrat leaders have pointed to delays caused by the announcement of barracks closures in York, and insisted they are on course to deliver a sound plan by May.

Leader Cllr David Carr said: “We’re making very good progress to deliver a Local Plan which is right for York – one which provides the homes and employment opportunities we need while protecting our city’s greenbelt and special character.

“We rightly reviewed the plan after the Ministry of Defence’s announcement over the future of three very large sites, and consulted once again listen to views from across York.”

However the announcement has brought criticism from Labour councillors, who say they warned this could happen.”
Themes
Tell me if I am over-simplifying but it seems to me that there are some common, unsurprising, themes within this list:
– Uncertainties as to the calculation of objectively assessed needs and the extent to which authorities can justify not meeting that need to due to green belt issues (nearly all these authorities have areas of green belt within their boundaries). 
– Uncertainties as to the extent to which it may be appropriate for authorities to assist in meeting other authorities’ needs, the duty to co-operate being far too loose a mechanism (which is not necessarily to suggest that a return to regional planning and “top down” numbers is the answer – these are authorities who didn’t manage to adopt a plan even under that regime, which of course had built into it inherent delays at the regional tier). 

– As a result of this wriggle room, housing numbers becoming a political battleground, with members often not accepting officers’ advice or with changes in approach arising from changes in political control. 

– Delays due to plans having been found unsound at the end of, or a long way into, a long process (usually as a result of these factors). 

– Plainly, these authorities haven’t been sufficiently spurred on by the application of the “tilted balance” leading to development taking place in unplanned, unwanted locations – perhaps due to that policy lever being less effective in relation to green belt – or other Government threats to date. 

– Many of the authorities being, on paper at least (their websites tell a good story to their constituents), now close to being able to submit a plan for examination, after (usually) a series of Regulation 18 consultation processes. 

Is slow plan-making the fault of local politicians or of the planning system itself? I would say both. The lack of prescription as to numbers and methodology has inevitably given room for protracted, unending, debate as to different approaches and outcomes. Debate and local choice is surely to be welcomed but the system has been so loose that in some areas this has slowed progress to an extent that anyone would surely say was unacceptable. Accordingly, the proposed tightening of the OAN methodology (see my 20 September 2017 blog post) and of the duty to co-operate is surely welcome, as is this clear threat by Javid of intervention. 

However, if formal intervention is actually required, the outcome will surely be a political, administrative and legal mess. 
…………………..

Meanwhile, it is perhaps unfortunate timing that in the same week the Secretary of State has made a holding direction in relation to the Stevenage local plan, at the request of local Conservative MP Stephen McPartland, despite a favourable Inspector’s report having been received last month. The issue appears to result from a continuing fault line both in Stevenage and more widely: whether to provide homes by way of town centre redevelopment (as per the plan) or outside the town in a new settlement (as per Mr McPartland). 

Whatever the rights and wrongs of the Stevenage position, why allow such political interventions if the plan has been found sound?
Simon Ricketts, 18 November 2017
Personal views, et cetera

(With thanks to Town Legal colleague Rebecca Craig for some background research. Mistakes and opinions all mine). 

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Green Belt Policy: Will It Change?

In all the noise and spin ahead of the Autumn budget on 22 November, I would be wary of reading anything substantive into stories such as these:
Telegraph 4 November 2017 Philip Hammond risks Tory backlash with gamble on opening up the green belt 

Times 30 October 2017 Hammond rebuffed over budget plan for green belt housing
 I don’t believe that there will be anything to change the current policy direction. This Government surely does not have the strength, the resolve or the thinking space. The existing tests in the NPPF for reviewing green belt boundaries and for determining applications for planning permission in the green belt will be retained, with the minor changes that have previously been announced. In my view the real action isn’t around what the policies say, but how they are applied. 

Local plans
At present, green belt boundaries may be reviewed as part of local plan processes. Established green belt boundaries should only be changed in “exceptional circumstances”. Boundaries are intended to be long term, capable of enduring beyond the plan period. 
The Government’s February 2017 Housing White Paper proposes, at paragraph 1.39, embellishing that “exceptional circumstances” test:
“Therefore we propose to amend and add to national policy to make clear that: 

* authorities should amend Green Belt boundaries only when they can demonstrate that they have examined fully all other reasonable options for meeting their identified development requirements, including: 

    * making effective use of suitable brownfield sites and the opportunities offered by estate regeneration; 


    * the potential offered by land which is currently underused, including surplus public sector land where appropriate; 


    * optimising the proposed density of development; and 


    * exploring whether other authorities can help to meet some of the identified development requirement.”


* and where land is removed from the Green Belt, local policies should require the impact to be offset by compensatory improvements to the environmental quality or accessibility of remaining Green Belt land. We will also explore whether higher contributions can be collected from development as a consequence of land being released from the Green Belt. ”

Wording along these lines is likely to be added to the draft revised NPPF, promised early in 2018, but will make no material difference in practice – the additional guidance may look like tough talk but is largely a statement of the present position. 
Statistics can be used in various ways. At one end of the spectrum there is concerted lobbying by CPRE (see for instance their paper Green Belt Under Siege 2017). But the Government’s own figures DCLG statistical release Local Planning Authority Green Belt: England 2016/17 7 September 2017 sets the issue in context:
Overall there was a decrease of 790 hectares (less than 0.05%) in the area of Green Belt between 31 March 2016 and 31 March 2017. In 2016/17, eight local planning authorities adopted new plans which resulted in a decrease in the overall area of Green Belt compared to 31 March 2016.”


Regardless of how “exceptional circumstances” are defined, it is presently too easy either for local planning authorities to delay their plan making or to seek to justify not meeting their objectively assessed housing needs on the basis of green belt constraints. Threats of intervention on the part of the DCLG have come to nothing and the duty to cooperate (even when elevated to a duty to provide statements of common ground) is still too far too uncertain as to its effect, allowing local politicians to justify to themselves not assisting with adjoining authorities’ unmet requirements. Furthermore, the Government’s previous politically driven interventions such as in delaying for some time the Birmingham Development Plan at the request of local Conservative MP Andrew Mitchell hardly promote a positive approach. 
The problem isn’t so much specifically about green belt policy but more generally about how effectively to penalising authorities that do not properly plan – and surely about how positively to encourage authorities on every local plan review to consider whether boundaries should be reviewed – possibly even ahead of looking outside their boundaries where adjoining authorities are not readily in a position to pick up their unmet needs? The prolonged delays to plan making in green belt areas such as parts of Hertfordshire and Bedfordshire are a serious indictment of the present system. 
If the imminent draft London Plan as expected fails to encourage the boroughs to review their green belt boundaries, will that not be an opportunity missed? By all means require exceptional circumstances, but rigid adherence to the status quo for political reasons has social, environmental and economic costs. 

(map from LSE paper A 21st Century Metropolitan Green Belt 2016)

Planning applications and appeals
Green belt designation has never been an absolute bar to development. There are two main routes to consent:
First, is the proposal not “inappropriate development” within the meaning of paragraph 89 and 90 of the NPPF? For residential and commercial development the most main potential exemptions are:
* “the extension or alteration of a building provided that it does not result in disproportionate additions over and above the size of the original building;

* the replacement of a building, provided the new building is in the same use and not materially larger than the one it replaces; 


* limited infilling in villages, and limited affordable housing for local community needs under policies set out in the Local Plan; 


* limited infilling or the partial or complete redevelopment of previously developed sites (brownfield land), whether redundant or in continuing use (excluding temporary buildings), which would not have a greater impact on the openness of the Green Belt and the purpose of including land within it than the existing development.

Secondly, even if the proposal is for “inappropriate development”, can the applicant demonstrate “very special circumstances”? The guidance is unspecific as to what will amount to very special circumstances: “Very special circumstances’ will not exist unless the potential harm to the Green Belt by reason of inappropriateness, and any other harm, is clearly outweighed by other considerations.” The balancing of considerations is left to the decision maker. 

By way of recent example, the Secretary of State allowed an appeal on 1 November 2017 for a proposed development by Oaklands College and Taylor Wimpey comprising “new and refurbished college buildings, enabling residential development of 348 dwellings, car parking, associated access and landscaping.” His decision letter concluded as follows:
“35. The Secretary of State agrees with the Inspector (IR 248) that the proposal is inappropriate development in the Green Belt, which is harmful by definition. He further agrees there would be additional harm by reason of a reduction in openness and by virtue of encroachment into the countryside. Therefore he attributes substantial weight to the harm to the Green Belt caused by the proposed development. 

36. The Secretary of State agrees with the Inspector that there would be some limited harm to the character and appearance of the area (IR249) and he gives limited weight to this harm. 

37. The Secretary of State agrees with the Inspector that the delivery of significant improvements to the College weighs very heavily in favour of the proposal (IR 251). The Secretary of State gives the educational benefits significant weight in favour of the proposal. He also agrees with the Inspector that in light of the lack of a five year housing land supply, the proposed market and affordable housing is a significant benefit (IR 252) that carries significant weight in favour of the proposal. Additionally, the Secretary of State agrees that the enhancement of beneficial Green Belt uses carry moderate weight in favour of the proposal. The Secretary of State gives limited weight to improvements to the non- designated heritage assets (IR 253). 

38. The Secretary of State shares the Inspector’s view that the effect on protected trees in Beaumont Wood, the relationship with the policies related to the Watling Chase Community Forest, and the effect on traffic and flooding in the Sandpit Lane area are neutral factors in the planning balance (IR 254). 
39. Overall, the Secretary of State agrees with the Inspector that the considerations summarised above clearly outweigh the harm to the Green Belt, justifying the proposal on the basis of very special circumstances (IR 255). He therefore concludes that relevant policies relating to development in the Green Belt do not indicate that the proposed development should be restricted. The Secretary of State also concludes that the adverse impacts of the proposed development would not significantly and demonstrably outweigh the benefits.

40. Overall, the Secretary of State agrees with the Inspector that there are persuasive material considerations which warrant a decision other than in accordance with the development plan (IR255).”
The application of the NPPF’s tests in relation to plan making and decision taking inevitably gives rise to disputes both as to interpretation (see the many court rulings listed by Landmark Chambers in relation to each of the relevant paragraphs of the NPPF) and as to the weight to be applied to the various material considerations (meaning unpredictability, together with many speculative applications). But with even greater inflexibility (after all the policy hurdles are already extremely high) there would be another set of problems. 

Any politician is going to be cautious about a major policy shift. It is an open question as to whether the public understands the policy basis for green belt – the way in which, often vast, swathes of land around our cities have been identified as an ad hoc series of urban containment zones:
“- to check the unrestricted sprawl of large built-up areas;

– to prevent neighbouring towns merging into one another; 


– to assist in safeguarding the countryside from encroachment; 


– to preserve the setting and special character of historic towns; and 


– to assist in urban regeneration, by encouraging the recycling of derelict and other urban land

However, free market solutions advocated by the likes of the IEA and the Adam Smith Institute are wide of the mark. The idea of the green belt, albeit largely abstract, albeit largely restrictive and not driven by specific landscape, environmental or conservation attributions, has captured the public imagination like no other planning invention – perhaps, in a very British way, because it simply carries the expectation of being left alone. The challenge is how, without watering down existing green belt principles, to prevent the designation being used for local political purposes as an argument that increases inequality, renders housing unaffordable, increases commuting distances and drives urban development to unacceptable densities or sensitive non green belt locations? 
In the same way as in its early years the objective of green belt designation moved away from providing open space for recreation and towards a more restrictive role, over time can it move again towards a positive role more closely aligned with other landscape, land use or nature conservation designations?
Another eighty years or so should crack it. 
Simon Ricketts, 11 November 2017
Personal views, et cetera

Viability Assessment Is Not A Loophole, It’s A Noose

Congratulations to Shelter’s PR team. Its report, Slipping through the loophole: How viability assessments are reducing affordable housing supply in England, with a deliberately emotive reference in its accompanying 1 November 2017 press release to a ‘legal loophole exploited by developers‘ was lapped up largely uncritically by the media:
Loophole that allows developers to avoid building affordable homes leads to huge shortfall Telegraph, 31 October 2017
Majority of affordable homes lost due to legal loophole exploited by developers, show figures Independent, 1 November 2017

Revealed: The ‘Loophole’ Developers Use To Avoid Building More Affordable Homes Huffington Post, 31 October 2017
SHAMEFUL GREED Developers are using a legal loophole to build less affordable homes than required in order to protect their profit margins The Sun, 1 November 2017

Some basic truths are being conveniently forgotten. I set out some of them in my 28 May 2017 blog post, Affordable Housing Tax and won’t repeat them here, save to say that we need to pause and reflect whether public policy on affordable housing provision is in a good place at all at present. 
The aim of the Shelter report is to seek to persuade the Government to follow through with its proposed limiting of the role of viability assessment at application, as opposed to plan-making, stage. This proposal is being consulted upon in Planning for the right homes in the right places consultation paper, responses to which are due by 9 November 2017.
But the report is unbalanced. The description of the assessment process is over-simplistic. It asserts blandly that developers “can cite viability concerns to lower the amount of affordable housing they are required to provide, in order to guarantee them a 20% profit margin and inflate their bids for land”, playing down the scrutiny given by the authority’s valuers (or district valuer if the authority so chooses) and by the Planning Inspectorate on appeal (see for example my 24 June 2017 blog post that referred to the Parkhurst Road and Newcombe House decisions). The report repeatedly refers to 20% profit on a scheme as if it is a standard benchmark dreamed up by developers, when in reality a scheme by scheme approach is required. Often that figure has indeed been accepted, but on the basis that it is determined to be appropriate as a tipping point. Given the risks inherent in any major scheme (the paper wrongly states that “the developer’s profit is effectively guaranteed by the viability loophole” – not guaranteed, not a loophole) how much profit would a provider of capital require in order to invest in that project rather than in any other commercial development or investment? 20% sounds about right to me?
The report ends up laying most of the blame at paragraph 173 of the NPPF:
“…To ensure viability, the costs of any requirements likely to be applied to development, such as requirements for affordable housing, standards, infrastructure contributions or other requirements should, when taking account of the normal cost of development and mitigation, provide competitive returns to a willing land owner and willing developer to enable the development to be deliverable.”
It seeks to show the effect that this supposed change in approach has had on the delivery of affordable homes by way of section 106 agreement:

It is interesting to look at this table alongside other tables in the research work from which it is drawn, Rethinking planning obligations: balancing housing numbers and affordability (Dr Sue Brownill and Dr Youngha Cho, School of the Built Environment Oxford Brookes University, March 2017):


In my view NPPF has been far less influential than other changes such as the loss of Government funding. 

By political sleight of hand, moral and legal responsibility for funding the provision of affordable, ie subsidised, housing has over the last decade moved largely onto the owners of land being brought forward for residential development and the promoters of those schemes. What level of affordable housing do these schemes have to bear? In reality, given such high policy targets, as much as can be extracted in negotiations, often with a review mechanism in the section 106 agreement allowing for further extraction at later stages in the development, preserving only as a potential return whatever benchmark land value and developer’s profit percentage has been agreed upfront in the viability assessment. 
As I explained in my Affordable Housing Tax blog post, section 106 requirements in relation to affordable housing largely started in the 1990s and became progressively entrenched in policy through the 2000s. But, prior to reductions in government funding, first in 2005 and then in 2011, the basis for developer commitments towards affordable housing was very different. Developers would commit in their section 106 agreement to affordable housing provision on the basis of securing a minimum base price for the units, usually being obliged to market the opportunity to nominated registered providers (known as registered social landlords until 2008). The quantum of the registered provider’s bid would depend upon the level of social housing grant secured from the Housing Corporation (replaced by the Homes and Communities Agency) and/or local authority. The nature of tenure of the affordable housing, and quantum, would depend upon the base price secured and in turn, in large part, upon the availability of social housing grant. “Cascade” provisions would specify the policy priorities in terms of tenure/quantum where the minimum base price could not be achieved. The minimum base price would commonly be linked to the Housing Corporation’s Total Cost Indicator (TCI), ie its estimate, area by area, of the normal cost of providing different types of housing. Social housing grant was commonly as high as 40 to 60% of TCI. But from around 2011 , with little fanfare and no public debate, social housing grant ceased to be available for section 106 affordable housing. 
As a result of that fundamental change in approach, affordable housing requirements are now pretty much a straight tax on land value (where the developer can pass the cost to the land owner through paying less for the land) and otherwise a tax on development. Often in reality the cost cannot be passed on – land owners have existing uses for their land, other potential development options or simply a minimum aspiration below which they will not go. Equally, land may have been acquired by an irrationally exuberant purchaser, unwilling now to crystallise a loss.   
Viability assessment is a necessary evil, but don’t assume that developers relish it:
– Via review mechanisms it can end up capping the maximum return that is achievable, an unattractive option when weighed against the uncapped risks that arise through any development project.  
– The toxic nature of the public debate, placing at the developer’s door a problem not of its making.

– The increasing risk that commercially sensitive information will need to be shared publicly.  

– The slow, expensive and unpredictable nature of the process, involving various consultants, all paid for by the developer – plainly, going with the policy grain will always be an easier option.

There is of course a debate to be had as to the relative extent to which land owners, developers and the state should fund affordable housing. I hope that we are indeed about to have that debate. There are some faint but encouraging signs, for instance the announcement by the prime minister in her party conference speech of £2bn towards social housing, the promised green paper and Sajid Javid’s recent urging that the Chancellor should borrow to build homes. We await the Autumn budget on 22 November with interest. In the meantime, unless local planning authorities are going to reduce massively their affordable housing requirements (unlikely, it’s needed), there is no alternative to viability appraisal. By all means, let’s make it work better but, without it, we will have even fewer homes built. 
Inevitably, we’ve been there before. See for example an ODPM report, July 2005: The Value for Money of Delivering Affordable Housing through Section 106:
“7.1  The research confirms that s.106 plays an important role in the delivery of affordable housing. However, there are other factors besides s.106 which have a significant influence on the provision of affordable housing. Some of these factors affect the availability of land, others affect the capacity to negotiate affordable housing contributions, still others affect the financial capacity of RSLs and other stakeholders. Such factors include: 
…

– Other planning obligations – the requirement for other essential planning obligations can reduce the contribution available to affordable housing. 

– Rent restructuring – this can affect the ability of the RSL to raise loans. 

– The grant regime – the abolition of LASHG has implications for affordable housing delivery if it is not replaced by other means. The short term nature of the bidding regime for funds can delay or postpone a scheme.

See also written evidence submitted to the Communities and Local Government Committee by by Professor Tony Crook, Ms Sarah Monk, Dr Steven Rowley and Professor Christine Whitehead in 2006:
”  Our research suggests that most (nearly three quarters) of Section 106 affordable housing units have an injection of public subsidy in the form of Social Housing Grant. At first sight this is odd and does not sit easily with one of our interpretations of Section 106, ie that developer contributions replace the need for subsidy. This might suggest policy “failure” but ignores the context within which Section 106 works best. Our evidence shows that planning gain delivers affordable housing in high price areas where land is expensive. What developers’ contributions appear to have done to date is to reduce the price of this expensive land to one that RSLs can afford within Housing Corporation funding guidelines. So, despite significant developers’ contributions, mounting on average to 5% of the gross development value across Section 106 sites (both the market and non-market elements), SHG is still needed to make the homes affordable and the schemes viable. In a recent calculation we have estimated that developers’ contributions on schemes agreed in 2003-04 were valued at £1,200 million. In looking at how Section 106 provides funding, we also need to recognise that Section 106 negotiations between developers and planners are not just about affordable housing contributions, but are usually about a much wider range of contributions, both in terms of physical off-site infrastructure and wider community needs, including school buildings. Affordable housing is not necessarily the highest priority and hence there may be little by way of developers’ contributions left over once other requirements have been negotiated and agreed. Thus both the expense of the land and the competing claims on planning gain explain the need for SHG, although without a clear negotiating and “accounting” framework there may well be risks that SHG inadvertently cross-subsidises these other planning “gains”.”


Eleven years on and it seems to me that we are in a much worse position. Whilst some grants are of course still available, social housing grant is long gone and in many areas a large non-negotiable slice has taken out by CIL (supposedly to be spent by authorities on infrastructure that unlocks development but that is not how it has turned out at all).

If the 2017 answer is to rely on land owners and developers to pay for affordable housing, let that be the outcome of a proper political debate and written into policy rather than the current unsatisfactory situation, which appears to me to be intellectually dishonest. If you’re going to tax market participants, do it openly, explain why you’re doing it and be sure that the mechanism is efficient in delivering the agreed objectives – more housing and more affordable housing, of all tenures. 
Simon Ricketts, 4 November 2017
Personal views, et cetera

PSI-Apps

Nothing in this blog post is intended to suggest in any way that planning in London is a game of psychology, politics and process but here are the basic rules, as applied this month by Sadiq Khan in Wandsworth and Barnet. 
PSI applications are defined in the Mayor of London Order 2008 as applications of “potential strategic importance” that fulfil at least one of the criteria set out in the Schedule to the Order. 

PSI applications have to be referred to the Mayor before they are determined by the borough council (I include in that term for ease the Corporation of the City of London and Westminster City Council) and referred again, if he requires it, after their determination and before the permission or refusal is issued – stage 1 and stage 2 referral respectively. 
The Mayor has two special powers:
First, subject to various detailed criteria and procedural requirements he can direct refusal (see my 9 September 2017 blog post Policing The SPG: New Scotland Yard). The borough council must then issue a refusal notice and the applicant has its usual right of appeal to the Planning Inspectorate. Advanced players of the game (not a game) take the view that the Mayor’s direction is potentially revocable, so in some circumstances the borough may hold off issuing its refusal notice and further negotiations will ensure. (I note for example that the New Scotland Yard refusal notice has not yet been issued). 
Secondly, again subject to various detailed criteria and procedural requirements, he can direct that he should be the local planning authority and then determine it himself (almost inevitably by granting planning permission) following a representation hearing (before which there is a stage 3 report). Until this month he had only determined two applications by this route, Hale Wharf in Haringey and Palmerston Road in Harrow (see my 18 March 2017 blog post London Calling: Mayoral Interventions).
We now have two more examples: 
Homebase site, Swandon Way, Wandsworth 
As set out in his press release, the Mayor has resolved on 17 October 2017 to approve a scheme by National Grid UK Pension Scheme next to Wandsworth Town railway station for 348 homes. Wandsworth Council had resolved to refuse permission for the development of the site due to the height and scale of the development and its proximity to a nearby conservation area. The development included 23% affordable homes. The developer has now agreed to increase that figure to 35%, with the majority in the first phase of development, and with review mechanisms as per the Mayor’s SPG. 
He had called in the scheme on 26 June 2017, noting that Wandsworth was significantly underperforming against its borough 33% affordable housing target. 
The Stage 1, 2 and 3 documents are at this link.
National Institute for Medical Research site, Mill Hill



The Mayor resolved to approve on 6 October 2017 a scheme by Barratt London for 460 homes on the National Institute for Medical Research site, the Ridgeway, Mill Hill. Barnet Council’s planning committee had resolved to refuse planning permission against officers’ advice, with the proposed reasons for refusal referring to effect on a conservation area, on green belt and on trees. In his 2 May 2017 call in letter he stated that Barnet Council is “currently significantly under-delivering against its annualised housing completions targets and the borough’s affordable housing targets.” The Mayor secured an increased affordable housing commitment, from 20% plus off-site financial contribution, to 40%. 
The Stage 1, 2 and 3 documents are at this link.
So it may be said that the Mayor is achieving on these schemes the percentages that he has flagged in the SPG. But I do have some open questions:
1. Where is the developer’s focus now to be in preparing proposals – on meeting local and borough concerns and aspirations or on achieving, via density, a development that is sufficiently viable to deliver the affordable housing percentages that may lead to the Mayor stepping in to assist if local discussions become difficult?
2. By his pragmatic actions, is the Mayor giving more weight to the SPG (non-statutory guidance, not policy) than it deserves, particularly in insisting on fairly rigorous adoption of the review mechanisms in the SPG?

3. When we see the draft London Plan at the end of next month, are we going to see various policies that cannot be said to be “strategic” but are drilling down to issues which should be left to be addressed at borough level?

4. Where deals are done to ensure an increased affordable housing percentage, will the increased pressure on viability in fact delay those schemes coming to fruition?

5. In some circumstances, will we see developers either seeking to ensure that their schemes meet the PSI application threshold, so as to come within the Mayor’s ambit, or conversely, seeking to ensure that they remain below the radar? Where will the balance lie – more big schemes, or fewer?

6. To what extent is party politics relevant? Is the Mayor more likely to intervene in Conservative boroughs such as Wandsworth and Barnet?

In the meantime, there are plenty of rumours about the Mayor’s planning policy direction, from tightening up on the criteria for student housing schemes to scrapping density matrices. All will no doubt be revealed on 29 November. 
Simon Ricketts, 21 October 2017
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Mending The Planning System (Has Anyone Tried Switching It Off And On Again?)

When I recently blogged about the Raynsford review of the planning system, I really wasn’t expecting shadow CLG Secretary of State Roberta Blackman-Woods to announce yet another one at the Labour party conference, at a CPRE fringe event. This is CPRE’s write-up. It will be called “People and Planning”. According to Building magazine we can expect proposals to streamline the compulsory purchase system and “tougher measures to stop developers sitting on sites“, as well as a rethink on CIL and on the Government’s recently announced OAN methodology consultation. 
Labour leader Jeremy Corbyn had the following passages in his conference speech, leading on from references to the Grenfell Tower tragedy:
We have a duty as a country to learn the lessons from this calamity and ensure that a changed world flowers . I hope that the public inquiry will assist. But a decent home is a right for everyone whatever their income or background. And houses should be homes for the many not speculative investments for a few. Look at the Conservative housing record and you understand why Grenfell residents are sceptical about their Conservative council and this Conservative government.

Since 2010: homelessness has doubled, 120,000 children don’t have a home to call their own, home ownership has fallen, thousands are living in homes unfit for human habitation. This is why alongside our Shadow Housing minister John Healey we’re launching a review of social housing policy – its building, planning, regulation and management.

We will listen to tenants across the country and propose a radical programme of action to next year’s conference. But some things are already clear tenants are not being listened to.
We will insist that every home is fit for human habitation, a proposal this Tory government voted down. And we will control rents – when the younger generation’s housing costs are three times more than those of their grandparents, that is not sustainable.

Rent controls exist in many cities across the world and I want our cities to have those powers too and tenants to have those protections. We also need to tax undeveloped land held by developers and have the power to compulsorily purchase. As Ed Miliband said, “Use it or lose it”. Families need homes.

After Grenfell we must think again about what are called regeneration schemes.

Regeneration is a much abused word.

Too often what it really means is forced gentrification and social cleansing, as private developers move in and tenants and leaseholders are moved out. 

We are very clear: we will stop the cuts to social security.

But we need to go further, as conference decided yesterday.

So when councils come forward with proposals for regeneration, we will put down two markers based on one simple principle:
Regeneration under a Labour government will be for the benefit of the local people, not private developers, not property speculators. 

First, people who live on an estate that’s redeveloped must get a home on the same site and the same terms as before.

No social cleansing, no jacking up rents, no exorbitant ground rents. 

And second councils will have to win a ballot of existing tenants and leaseholders before any redevelopment scheme can take place.

Real regeneration, yes, but for the many not the few.

That’s not all that has to change.”

Liberal Democrats’ leader Vince Cable took a similar theme in his own party conference speech:
“If there is any single lesson from the Grenfell disaster, it is that people in poverty aren’t listened to. Nowhere is inequality more marked than in the housing market. Property wealth for the fortunate coexists with growing insecurity and homelessness for many others. Home ownership, which spread wealth for generations, is no longer a realistic prospect for younger people with moderate means.

To put this right, we must end the stranglehold of oligarchs and speculators in our housing market. I want to see fierce tax penalties on the acquisition of property for investment purposes, by overseas residents. And I want to see rural communities protected from the blight of absentee second home ownership, which devastates local economies and pushes young people away from the places where they grew up. 

Homes are to live in; they’re not pieces on a Monopoly board. But whatever we do with existing homes will not be enough. A doubling of annual housing supply to buy and rent is needed. 

For years politicians have waffled about house building while tinkering at the edges of the market. I want to recapture the pioneering spirit that in the mid-20th century brought about developments like Milton Keynes and the new towns…I want to see a new generation of garden cities and garden villages spring up in places where demand presently outstrips supply.

But we know that private developers alone will not make this happen.Just as social reformers in the 1950s and 60s saw government roll up its sleeves and get involved with building, government today has a responsibility to be bold…and to build more of the homes we need for the 21stcentury. It is utterly absurd that councils are allowed to borrow to speculate in commercial property…but are stopped from borrowing to build affordable council houses.”

The shadow of Grenfell of course looms over the politics of planning and social housing. Secretary of State for Communities and Local Government, Sajid Javid, had earlier in the month announced a “green paper on social housing“:
A wide-ranging, top-to-bottom review of the issues facing the sector, the green paper will be the most substantial report of its kind for a generation.

It will kick off a nationwide conversation on social housing.

What works and what doesn’t work.

What has gone right and what has gone wrong,

Why things have gone wrong and – most importantly – how to fix them.”
Shelter also put out a press release, big on hyperbole, short on analysis, referring to the ‘legal loophole’ of ‘secret viability assessments’, focusing on the reduced levels of affordable housing achieved in Kensington and Chelsea compared to the borough’s 50% policy target and making the explicit link to Grenfell:
New research from Shelter reveals that a legal loophole has been used by housing developers to avoid building 706 social homes in Kensington and Chelsea – more than enough to house families made homeless from the Grenfell tower fire.”

How is the government’s position on the role of viability in planning (set out in paragraph 173 of the National Planning Policy Framework, a non-statutory, hardly obscure, planning policy document, now over five years’ old) a “legal loophole“?
Poor Raynsford review, is planning is too political for whatever emerges from it to gain traction? Its recommendations are due to be presented to next year’s party conferences. I hope that clear distinctions are drawn between changes to be made to the basic legislative hardware of the system (is it resilient, efficient, clear for users?) and to be made to the software (the NPPF, PPG structure – is it kept up to date to reflect the Government’s policy priorities and guiding users’ behaviour appropriately?), the purpose of the changes being to influence the content, scale, quality and pace of the data processing: individual plans and decisions actually coursing through the system, leading most importantly to delivery of political priorities, whatever they may be for the next Government. The review is somewhat hamstrung by not being able to set out those priorities as its starting point. 
So, what of the Government’s position? Regardless of what will be said at the forthcoming Conservative party conference, surely the current Government is not currently in a strong position to make further major changes. However, there is much unfinished legislative business, arising from:
– partly implemented enabling legislation (Housing and Planning Act 2016, Neighbourhood Planning Act 2017)

– uncompleted consultation processes (the Housing White Paper and associated documents, February 2017; Planning For The Right Homes In The Right Places, September 2017)

– other previously floated initiatives (for instance in the Conservative Party’s 2017 general election manifesto)

– other previous initiatives, partly overlapping with the above (a House of Commons library briefing paper dated 12 July 2017 lists 22 pre-June 2017 announcements that have not yet been implemented, or cancelled). 

 I have tried to take stock of where we are in terms of legislative as opposed to policy changes. This is a list of where I believe we are with the main planning law provisions of the 2016 and 2017 Acts (with relevant commencement dates indicated, although check the detail: in many cases a provision in primary legislation may have been switched on but still requires further secondary legislation for it to have any practical effect):

 Housing and Planning Act 2016 

 * Starter homes – providing a statutory framework for the delivery of starter homes – not in force, not really needed since the Housing White Paper u-turn

* Self-build and custom housebuilding – requiring local authorities to meet demand for custom‐built and self‐built homes by granting permissions for suitable sites – from 31 October 2016

* Neighbourhood planning changes – from 12 May 2016

* Permission In Principle/Brownfield Land Registers

    * Housing and Planning Act 2016 (Permission in Principle etc) (Miscellaneous Amendments)(England) Regulations 2017 – 6 March 2017

    * Town and Country Planning (Permission in Principle) Order 2017 – 15 April 2017

    * Town and Country Planning (Register of Previously Developed Land) Regulations 2017 – 16 April 2017

* Extension of Government’s ability to designate poorly performing LPAs such that non-major applications can be made direct to the Planning Inspectorate – from 12 July 2016

* Planning freedoms schemes – from 13 July 2016

* Resolution of disputes about planning obligations – not in force

* NSIPs including a housing element where functional link or close geographical link – from 6 April 2017

* Powers for piloting alternative provision of processing services – from 12 May 2016 (but no pilots yet)

* Urban Development Corporations/designation of new town areas – from 13 July 2016

* Compulsory purchase changes – mostly from 3 February 2017

Neighbourhood Planning Act 2017 
 * Neighbourhood planning changes – (partly) from 19 July 2017, subject of a previous blog post)

* Power to direct preparation of joint local development documents – not yet in force

* Restrictions on pre-commencement planning conditions – from 19 July 2017 (although Regulations not yet made)

* Restriction on PD rights re drinking establishments

    * Town and Country Planning (General Permitted Development) (England) (Amendment) (No 2) Order 2017 from 23 May 2017 (subject of a previous blog post)

* More compulsory purchase changes – partly in force, various commencement dates

 And these are the limited areas where we can expect further legislation:

* CIL reform (probably limited reform in this Parliament)

* Further PD rights? Maybe not. There has been silence in relation to upwards extensions in London and further rural PD rights, although limited light industrial to residential PD rights come into force for three years from 1 October 2017, following amendments to the General Permitted Development Order last year. 

* 20% increase in planning application fees (definitely)

* Completion notices reform (maybe, floated in Housing White Paper, subject of a previous blog post)

* Statutory three month deadlines for Secretary of State decisions (maybe, floated in Housing White Paper)

* Planning appeal fees (maybe, floated in Housing White Paper). 

* Regulations as to the “technical details” procedure for permissions in principle (definitely)

 I had to get my head round all of this in preparing to speak at Conference.*

*The RTPI’s Planning Issues For The Housing Agenda conference on 4 October.

Simon Ricketts, 30.9.17

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Class Distinctions 2: Student Housing

Happy freshers’ week. 
I blogged recently about how the planning system struggles when it comes to housing for older people. But there are worse problems when it comes to student housing. Some recent press articles are at the end of this post, but first you need to get through some law I’m afraid (there may be an examination on it later). 
For a start, from a legal perspective there is a similarly poor fit with the Use Classes Order.
Shared student living in converted houses has since 2010 (in England, 2016 in Wales) been hived off from use class C3 (residential use) into use class C4, the HMO (“houses in multiple occupation”) use class: “small shared houses occupied by between three and six unrelated individuals, as their only or main residence, who share basic amenities such as a kitchen or bathroom”.
This definition excludes: 
– HMOs in blocks of flats (eg what seems to be the main model these days in relation to purpose built student accommodation blocks, with clusters of self-contained flats, each housing six students, sharing cooking and living accommodation) 

– Houses shared by more than six students.

The background to the creation of C4, which was not all about students, but in part a response to concerns about pressures being caused to communities by high concentrations of HMOs more generally, is well summarised in a House of Commons library briefing paper, Houses in multiple occupation & planning restrictions (14 July 2017). 
By virtue of Part L of the Town & Country Planning (General Permitted Development) (England) Order 2015, unless the relevant local planning authority has made an article 4 direction to contrary effect, planning permission isn’t needed to change from C4 to C3 (residential use), or vice versa. Many university towns and cities have made article 4 directions, requiring planning permission to change from C3 to C4 use, for example Sheffield, Leeds, Loughborough, Leicester, Nottingham, Southampton and Durham to name but a few. 
Against the background of almost universal university expansion, this constraint on supply of converted accommodation, denying much of the already (in most areas at least) expensive PRS market to students, has surely played its part both in further increasing student housing costs and in giving students fewer practical alternatives to living in purpose-built student accommodation, often now built and operated by large specialist student housing providers. 
As far as the planning system is concerned, purpose built student housing blocks are generally treated as “sui generis” (outside any use class) and therefore specific planning policies are required at an individual local planning authority level to control them (or to impose standards in terms of unit size, daylighting and sound insulation). In some ways they now often more closely resemble clusters (stacked high) of quasi C4 HMO style accommodation, with bedrooms in self-contained clusters of six, each with its own kitchen and communal area. 
Planning permission is required to make a material change from a sui generis use. Whether there is a material change in the character of the use is for the decision maker to judge. As long as conditions or section 106 agreement planning obligations aren’t breached, change to, say, co-living may not require planning permission. 
Ensuring that purpose built student accommodation is affordable is a big issue. In recent years we have seen student rent strikes, supported by the NUS. In London, we wait to see what further controls will be proposed in the draft London Plan, now expected on 29 November. In the meantime, there was nothing in the Mayor’s draft housing strategy published on 6 September 2017 (in 236 pages I could only find one passing reference to students). To what extent will the policies set out in the previous Mayor’s March 2016 housing SPG remain? The SPG takes the following approach in relation to purpose built student accommodation (PBSA):

– “providers of PBSA are encouraged to develop models for delivery of PBSA in london which minimise rental costs, via its layout and location, for the majority of the bedrooms in the development and bring these rates nearer to the rate of a affordable student accommodation described below
– requirement for affordable student accommodation where a proposed provider does not have an undertaking with a specified academic institution(s) that specifies that the accommodation will be occupied by students of that institution(s)

– affordability determined by reference to a formula that equates to 55% of average student income. For the academic year 2016/2017 this equated to £5,886 or less and for a 38 week contract a weekly rent of £155. 

– the extent of affordable housing to be secured “should be the maximum reasonable amount subject to viability” (our old friend!)

– to enable PBSA providers to maximise the delivery of affordable student accommodation by increasing the profitability of the development, boroughs should consider allowing the temporary use of accommodation during vacation periods for ancillary uses and should consider setting nil CIL rates for affordable student accommodation. 

– eligibility for affordable student accommodation should be based on assessment of need. 

Now that reading list:

Oliver Wainwright, A new urban eyesore: Britain’s shamefully shoddy student housing (The Guardian, 11 September 2017)

Rhiannon Bury, Student housing may be a property bubble in waiting (Telegraph, 18 September 2017)

Could it be the end of the Newcastle student flat boom? Council set to vote on greater controls (Evening Chronicle? 15 January 2017)

Letter: Students vs Residents – this situation in Bath around housing is not students’ fault (Bath Chronicle, 5 September 2017)

Students in Wales taking out loans to afford ‘luxury’ flats (BBC website, 22 September 2017)

It seems to me that there are various issues to be unpacked here:
– the need for authorities properly to plan for the consequences of increases in student numbers

– competing needs as between between student and general needs housing

– often unjustified “there goes the neighbourhood” concerns about the impacts of students on an area. 

– affordability

– the extent to which universities should retain responsibility for housing their students, affordably and to appropriate quality standards.

Class, discuss. 
Simon Ricketts, 24.9.17
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Housing Needs: Assessed Or Assumed?

The new draft methodology to be used by English local planning authorities for determining their level of housing need is deceptively simple. Is it indeed too simple?
The current system (difficulty level: advanced)
The NPPF currently advises that LPAs should “use their evidence base to ensure that their Local Plan meets the full, objectively assessed needs for market and affordable housing in the housing market area”. They should:
“prepare a Strategic Housing Market Assessment to assess their full housing needs, working with neighbouring authorities where housing market areas cross administrative boundaries. The Strategic Housing Market Assessment should identify the scale and mix of housing and the range of tenures that the local population is likely to need over the plan period which: 

* meets household and population projections, taking account of migration and demographic change; 


* addresses the need for all types of housing, including affordable housing and the needs of different groups in the community (such as, but not limited to, families with children, older people, people with disabilities, service families and people wishing to build their own homes); and 


* caters for housing demand and the scale of housing supply necessary to meet this demand

The PPG provides more detailed guidance but in practice the recommended approach is complex, relying on a shifting, uncertain evidence-base with subjective judgements to be made. Disputes over the calculation of “objectively assessed needs” are far too time-consuming, technocratic, uncertain and expensive. 

Local Plans Expert Group’s recommendations (difficulty level: intermediate)
Back in September 2015, the then Secretary of State, Greg Clark, and then housing and planning minister, Brandon Lewis (I know, seems like another era), appointed an independent Local Plans Expert Group “with a remit to consider how local plan making can be made more efficient and effective“. Its impressive line-up was as follows: 
Members
John Rhodes OBE – Quod, Director – Chair 

Adrian Penfold OBE – British Land, Head of Planning 

Councillor Toby Elliott – Swindon Borough Council, Cabinet Member 

Derek Stebbing – Chelmsford City Council, Planning Policy Manager 

John Howell OBE MP FSA – Member of Parliament for Henley 

Keith Holland – retired Planning Inspector 

Liz Peace CBE 

Richard Harwood OBE QC – 39 Essex Chambers 

Advisors 

Christopher Katkowski QC – Landmark Chambers 

Ian Manktelow – Wycombe District Council, Team Leader, Planning Policy 

Matthew Spry – Nathaniel Lichfield & Partners – Senior Director 

LPEG’s report was published on 16 March 2016, together with a separate volume of appendices, within which Appendix 6 sets out a simplified, standardised approach to the assessment of housing need. The methodology is summarised in this table: 


It was a detailed, thoughtful piece of work, delivered quickly. The Government then took almost as long again to publish what can best be described as a holding response on 7 February 2017, alongside publication of the housing white paper:

“The White Paper confirms that the Government will consult on options for introducing a more standardised approach to assessing housing requirements. The outcome of this consultation will be reflected in changes to the National Planning Policy Framework. We want councils to use the standardised approach and will incentivise them to do so, as this will help to speed up and reduce the cost of the plan making process for those authorities that use it. The White Paper indicates that our decision making for the £2.3bn Housing Infrastructure Fund is likely to factor in whether authorities intend to apply the new standardised approach to assessing housing requirements. 


We expect councils that decide not to use the methodology to explain why not and to justify the methodology that they have adopted. We will consult on what constitutes a reasonable justification for deviating from the standard methodology, and make this explicit in the National Planning Policy Framework.

The Government’s proposals (difficulty level: elementary)
It is interesting that politicians (again) select a group of recognised experts and then embark on a significantly different approach. Perhaps the group wasn’t brave enough in its quest for a one size fits all formula or perhaps it recognised that, if it did, the figures would not be fit for purpose. 
However, a year after the publication of LPEG’s report, the Government has published, for consultation, its proposals: Planning for the right homes in the right places: consultation proposals (14 September 2017). The consultation period expires on 9 November 2017. 
“Subject to the outcome of this consultation, and the responses received to the housing White Paper, the Government intends to publish a draft revised National Planning Policy Framework early in 2018. We intend to allow a short period of time for further consultation on the text of the Framework to make sure the wording is clear, consistent and well-understood. Our ambition is to publish a revised, updated Framework in Spring 2018.” Planning Practice Guidance will be updated at the same time.
LPEG’s recommended approach has been further simplified, reduced indeed to a formulaic approach which will have to be followed by LPAs save in “compelling circumstances” which “will need to be properly justified, and will be subject to examination.” Amongst the elements that appear to have been stripped back from the LPEG recommendations are
– Just using ONS’ projected numbers of households as the demographic baseline for each area

– No ten year migration scenario sensitivity test

– No looking at vacancy and second home rates

– No separate consideration, as part of this methodology, of the need for affordable housing although LPAs should identify the housing need for individual groups, such as those in need of affordable housing, via a streamlined process (the Government invites suggestions as to how that might work). We also wait to see what will be in the forthcoming “green paper on social housing” announced by Sajid Javid in his speech to the National Housing Federation on 19 September 2017)

The proposed formula is as follows:

A cap is proposed on the level of any increase:

“We propose to cap the level of any increase according to the current status of the local plan in each authority as follows: 

a)  for those authorities that have adopted their local plan in the last five years, we propose that their new annual local housing need figure should be capped at 40 per cent above the annual requirement figure currently set out in their local plan; or

b)  for those authorities that do not have an up-to-date local plan (i.e. adopted over five years ago), we propose that the new annual local housing need figure should be capped at 40 per cent above whichever is higher of the projected household growth for their area over the plan period (using Office for National Statistics’ household projections), or the annual housing requirement figure currently set out in their local plan.”

DCLG has applied the new methodology to every authority in England, arriving at an overall housing need figure of 266,000 a year (including 72,000 in London) broken down authority by authority on a spreadsheet (which may not open on mobile devices). The table warns that the numbers are “indicative” and “should be treated with caution” (indeed various errors have already been found) but inevitably they have been pored over by those on all sides, whether to make the case for or against additional housing in a particular area. 

There are some curious outcomes due to the way that, for example, anticipated or planned employment growth that will lead to additional housing pressure has not been factored in, save indirectly to the extent that it may have an effect on housing affordability. The affordability ratio further skews the increases towards the south with many authorities in the north and the Midlands showing decreases as a result of these factors, regardless of their actual level of ambition. The paper stresses that LPAs can plan for more homes than the number arrived at by the methodology but to what extent will the existence of the lower number encourage objectors to push back?
The transitional provisions will certainly encourage many LPAs to make sure that their plans have been submitted for examination by 31 March 2018:

This is the briefest of overviews. The paper includes further proposals to which no doubt I’ll be coming returning. In the meantime, for a full analysis of the new approach and its likely implications, I recommend Lichfields’ paper, written by LPEG adviser Matthew Spry. 

Simon Ricketts, 20.9.17
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