Debate on planning reform and housebuilding targets, House of Commons, 8 October 2020

Councils are committed to ensuring new homes are built and communities have quality places to live. It is vital that these are delivered through a locally-led planning system with public participation at its heart which gives communities the power to ensure new developments are of a high standard, built in the right places, and include affordable homes.


Key messages

  • Councils are committed to ensuring new homes are built and communities have quality places to live. It is vital that these are delivered through a locally-led planning system with public participation at its heart which gives communities the power to ensure new developments are of a high standard, built in the right places, and include affordable homes.
  • The Government has published proposals to overhaul the planning system, in the Planning for the Future White Paper, and the Changes to the current planning system consultation, including a proposed new standard method for assessing housing need.
  • Councils have raised concerns about the timing of a wholesale overhaul of the existing system and change to a new system, including the necessary legislation. This will create uncertainty and take many years to deliver and implement across Whitehall and the wider planning sector.
  • Whilst the LGA has previously welcomed the principle of a standardised, simplified methodology for calculating the local housing need for areas, we have made the point that any model should be able to reflect the complexities of different housing markets. A nationally set formula will always struggle to reflect local need. The proposed new method should therefore be optional to use for local planning authorities where it is considered to robustly produce a number that accurately reflect local housing needs.
  • The methodology does not appear to support the Government’s ambitions to level up and build more on brownfield land in urban areas. In fact the LGA’s analysis shows that the new methodology would disproportionately impact on rural rather than urban areas.
  • With 9 in 10 planning applications approved by councils, and more than a million homes given planning permission but not yet built, it is clear that it is the housing delivery system that is broken, not the planning system. Raising the number of homes required without incentivising or compelling developers to build will not lead to more homes.
  • A radical overhaul of the planning system will not support the Government’s ambitions to build 300,000 homes a year, or the much needed 100,000 social homes a year. We are calling on the Government to fully engage with and take advantage of the expertise in local government to ensure that their aspirations of an improved system work in practice.

The LGA continues to campaign for a locally led planning system and this is particularly important as we rebuild and recover from COVID-19. More information can be found in the LGA’s recent reports, Local Planning Authorities: Developing a recovery and resilience planning package post-pandemic and Delivery of council housing: a stimulus package post-pandemic.  

Changes to the current planning system

  • The Changes to the current planning system consultation sets out changes to policy and regulations that can be implemented immediately. It proposes the securing of First Homes through developer contributions. This includes requiring 25 per cent of all affordable housing secured through developer contributions to be First Homes sold at a minimum 30 per cent discount. The proposals also include interim changes to the standard method for assessing local housing need and temporarily raising the small sites threshold below which developers will not be required to contribute to affordable housing (up to 40 or 50 units) to support SME builders.
  • The LGA supports the principle of First Homes as a discounted home-ownership product which could assist first-time buyers to purchase a home. However, the mandatory requirement meaning that 25 per cent of affordable housing contributions should be First Homes will lead to the displacement of other discounted-market products, including those for affordable and social rent. Councils should be able to determine the mix of affordable homes tenures that best meet local needs.
  • The proposals to raise the affordable housing threshold to 40 or even 50 homes would have a devastating impact on the delivery of affordable housing and deprive those in need of access to the housing market. It will also further exacerbate the loss of affordable homes through other national exemptions, for example permitted development rights. It is vital that any thresholds for affordable housing should be determined by local planning authorities based on assessment of local need for affordable housing.

Standard method for assessing local housing need

  • LGA analysis of the new methodology reveals that in terms of housing numbers there are some stark impacts in different parts of the country, and it would disproportionately impact on rural rather than urban areas. Some of the most rural places in England will see a requirement for a 59 per cent increase in homes compared with those required to be built under the current algorithm, compared to a 20 per cent increase in major urban areas.
  • The analysis shows that, compared with the number of homes built in recent years:
    • Under the new national targets, London will be expected to see a 161 per cent increase in housing. A 57 per cent increase in new homes will be expected in the south east and 39 per cent in the south west.
    • For example, Brighton and Hove will be expected to deliver a 287 per cent increase in housing, Dover will have to increase new homes by 294 per cent and Tunbridge Wells will have to increase by 184 per cent.
    • In comparison, proposed housing targets for the north east are 28 per cent lower than existing delivery, 8 per cent lower in the north west and 6 per cent lower in Yorkshire and Humberside.
    • Northern cities stand to see significantly fewer homes built with the new requirement seeing a 66 per cent decrease on those built in recent years in Newcastle, 59 per cent in Liverpool, 20 per cent in Sheffield and 16 per cent in Leeds.
  • A nationally set formula will always struggle to reflect local need. Raising the number required without incentivising or compelling developers to build will not lead to more homes. The methodology also does not appear to support the Government’s ambitions to level up and build more on brownfield land in urban areas.
  • Simply building more homes will not resolve affordability issues – having the right tenure mix to meet the needs of local communities is vitally important. Assessment of local housing need, including overall numbers and tenure mix, should be determined locally based on the relevant up to date evidence, because what might be the optimum tenure mix in one place, will not be in another. The proposed new method should be optional to use for local planning authorities where it is considered to be appropriate for the housing market area that they operate within.
  • There should also be national guidance that makes clear that local planning authorities can use their own clear and justified methodology, regardless of whether that results in a local housing need figure which is higher or lower than that given by the proposed revised standard method.
  • The impact of the housing need numbers resulting from the proposed changes to the standard method is very real. In some areas it risks capping ambition to drive forward economic growth, as well as providing leverage for those local interests who are less favourable to new development. In other areas, it sets an ambition that will be all but impossible in the current environment. This is exacerbated due to councils holding limited tools to incentivise developers to build the homes that local communities need at the scale and speed necessary, once permission has been granted; a situation that is not improved by the measures included in the Government’s proposals.
  • If the Government is to meet is aspirations on build out of new homes it needs to provide councils with the tools to encourage developers to build out sites with permission in a swift and timely manner.

Planning for the Future White Paper

  • The White Paper consultation proposes a fundamental review of the existing planning system, requiring changes to primary and secondary legislation. The focus of the proposals appears to be on housebuilding and land-use planning, to the exclusion of the many roles planning undertakes to create places.
  • Councils have raised concerns that a wholesale overhaul of the existing system and change to a new system, including its legislation, will create uncertainty and take many years to deliver and implement across all of Whitehall and the wider planning sector. Communities need to be made aware about how and when they can engage in the new planning process. In addition, the proposals need to take a more joined up approach, recognising and accounting for changes to other relevant legislation such as the Environment Bill and any changes as a result of the forthcoming Devolution White Paper.
  • Councils have concerns that the White Paper proposals will lead to a loss of local democracy, with the removal of the right to be heard in person at plan enquiries, and the removal of democratic accountability of planning applications in growth areas.
  • The Government has acknowledged that resourcing of planning departments is an area that needs additional support. NAO data shows that between 2010-11 and 2017-18 there was a 37.9 per cent fall in net current expenditure on planning functions and planning departments. This significantly reduces their capacity to ensure the delivery of new housing through the planning process and enable the new supply of housing and appropriate infrastructure.
  • Whilst the White Paper identifies a skills strategy for local authorities, there is no detail regarding how this will be resourced. There is considerable concern from councils about their already stretched capacity. Councils will need to upskill officers to undertake the transition process locally and then implement the new planning regime over many years. Planning affects other areas of council business, and any changes to the system will have impacts well beyond planning departments, across all council operations as a whole.
  • The LGA has called for planning departments to be allowed to set their own fees. Taxpayers currently subsidise nearly £180 million per annum to cover funding shortfalls, where nationally set fees do not cover the cost of processing planning applications.

Contact

Amy Fleming, Public Affairs and Campaigns Adviser

amy.fleming@local.gov.uk