The future of the planning system and the upcoming Planning Bill , House of Commons, 15 July 2021

• 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.
• With nine 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. There is also land for a further one million homes already allocated in Local Plans which developers have not yet brought forward to planning application stage. Raising the number of homes required without incentivising or compelling developers to build will not lead to more homes.
• Last year the Government published proposals to overhaul the planning system, in the Planning for the Future White Paper and the Changes to the current planning system consultation. Since then the Government has consulted on a number of wider reforms including a nationally set formula to achieve housing. The LGA and other partner organisations raised concerns with the proposed formula and the Government has listened, announcing their decision to change the proposal.
• Whilst we await the Government’s response to the White Paper, there have been a number of other proposals as part of the wider reforms. These include extending permitted development rights, changes to the National Planning Policy Framework (NPPF), and a new draft National Model Design Code (NMDC), which we responded to. Most recently, a forthcoming Planning Bill was announced during the Queen’s Speech on May 11.
• The Government has already begun to make significant changes to the planning system. They recently confirmed extending nationally set permitted development rights (PDR) for conversion from any commercial use to residential use and allowing applications for major infrastructure development to be fast-tracked without going through the existing planning process. We have raised our concerns that extending PDR does not support the Government’s aspirations outlined in the Planning White Paper, and the Government’s own research has shown how conversions to residential through change of use PDR can fail to meet adequate design standards, avoid contributing to local areas and create worse living environments. PDR also undermines the policies in the National Planning Policy Framework and the intention of the draft National Model Design Code to create sustainable, well-designed places.
• We support the Government’s aspirations as outlined in the White Paper for an efficient, well-resourced planning system that supports local involvement in designing, planning and creating great places for current and future generations. To succeed in meeting these challenges the planning system needs to be transparent, fit for purpose, and accessible to all. In a recent LGA poll of residents, 82 per cent of respondents indicated that it is important to them that they are able to comment on individual plans for all housing developments in their local area.
• As a sector, local government is ready to work with Government to achieve these objectives. However, the current proposals lack the detail that is needed for full debate and comment. This lack of detail means that there are wide-ranging concerns about how the proposals will work in practice.
• 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.
• 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 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. Further information can be found in the LGA’s recent reports, Local Planning Authorities: Developing a recovery and resilience planning package post-pandemic, Delivery of council housing: a stimulus package post-pandemic, and Building Post-Pandemic Prosperity.

The Planning Bill was introduced during the Queen’s Speech on May 11. The main elements of the Bill are:

• Changing local plans so that they provide more certainty over the type, scale and design of development permitted on different categories of land.
• Significantly decreasing the time it takes for developments to go through the planning system.
• Replacing the existing systems for funding affordable housing and infrastructure from development with a new more predictable and more transparent levy.
• Reforming the framework for locally led development corporations to ensure local areas have access to appropriate delivery vehicles to support growth and regeneration.

LGA’s view on these points:

• Zoning: Certainty in planning through Local Plans is critical to signal to communities and developers what development will happen in an area. This builds flexibility into the system, allowing local authorities to respond to changing circumstances. We are concerned that the proposed ‘zoning/area’ categories are too restrictive and do not reflect the complexity of the areas that Local Plans need to plan for. We are also concerned that the proposals will make it more difficult to develop communities with the right mix of homes, jobs and other social and physical infrastructure. However, the lack of detail on how the system will work in practice makes it challenging to comment on the impact. Councils also need powers to ensure there is a mix of homes – to rent and buy – that are available and affordable to people that need them.
• Democracy: The reforms mean that the future focus of local engagement in planning will be at the Local Plan making stage. This means that communities will not be able to influence individual applications in the same way as they do now. Councils have noted how difficult it is to get communities to engage in developments that might not take place for a decade. The sector wants to work with Government to ensure that the system does not lose its important local democratic scrutiny.
• Resources: The White Paper recognises the need for local planning authorities to remain at the heart of any reforms, and that they need to have the right skills and resources to ensure successful implementation. Local authorities will need to be closely involved in developing the resources and skills strategy. Planning fees already do not cover the true cost of processing planning applications, and taxpayers currently subsidise the cost at a rate of nearly £180 million a year. This is most apparent with smaller applications. In addition, between 2010-11 and 2017-18 there was a 37.9 per cent real‑terms fall in net 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. We have said for many years that councils need the ability to recover the cost of processing applications, and need to be able to set fees locally. Councils will also need the necessary resources to upskill or hire new planning officers to undertake the transition process locally and then implement the new planning regime alongside developing a new design guide. According to Public Practice, local planning authorities will need forward-funding to upskill and produce and deliver local Design Codes at scale. They also found that the cost of adopting a Design Code for an area of approximately 1000 homes has been estimated at £139,000.
• Infrastructure: We support a framework that will enable locally led sustainable development, driving growth and regeneration, revitalising communities and creating the right mix of homes. The delivery of the right infrastructure is critical to supporting the high-quality homes and places communities need. The government’s proposals seek to bring Section 106 and Community Infrastructure Levy (CIL) together into a single Infrastructure Levy. However, any new Infrastructure Levy is unlikely to be able to provide all an area’s infrastructure needs and it will be important for the planning reforms to be seen within the context of the broader national infrastructure needs and how these can be financed. It will be important for any future levy to be set locally rather than nationally and that local government need to work with MHCLG on how the levy is determined.
• Digitisation of planning: We support measures to enhance public participation by using digital technology rather than out-of-date notices in local newspapers. A more digital service will make the planning system more accessible and efficient, alongside other forms of engagement to ensure that all residents can engage in the planning process.
• Incentivising build out: Councils need tools to encourage/oblige developers to build out sites with permission in a swift and timely manner. We have advocated for councils to have more powers to direct the diversification of products within sites, as well as a streamlined compulsory purchase process to acquire (at pre-uplift value) stalled sites or sites where developers do not build out to the timescales agreed with a local planning authority. We have also advocated for the introduction of financial penalties, for example council tax charges on developers who are not building out to agreed timescales - a ‘stalled sites’ council tax premium.

• The White Paper 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. The LGA’s full response to the White Paper consultation is available on our website.
• Whilst we recognise the Government’s aspiration to improve the current system, without addressing many of the detailed issues there is a significant risk that proposed changes could have a detrimental effect on the planning system. We have the opportunity to take the time needed to make improvements to the planning system. Conversely, if we get this wrong, the impacts will last for generations and some will be irreversible.
• The evidence demonstrates that with nine in 10 planning applications approved by councils, and more than a million homes given planning permission in the last decade not yet built, planning is not the problem. There is also land for more than one million homes already allocated in Local Plans which developers have not yet brought forward to planning application stage. There is no evidence that the planning system is responsible for holding up the build out of developments.
• It is crucial that any changes to the planning system include incentives (and penalties) to ensure developers and landowners build out their permissions and allocations to the high standards we all aspire for. Councils need the tools to encourage/oblige developers to build out sites with permission in a swift and timely manner.
• Whilst the government has not taken forward its proposals to change the standard method for housing need we continue to have concerns with the method and the resulting figures it produces for local areas. In particular, the methodology is not responsive to the complexity in local housing markets, and there are implications of using the resulting numbers as a target within the Housing Delivery Test and the subsequent sanctions if these are not met. The standard method also uses out of 2014-based household projections, which is at direct odds with Paragraph 31 of National Planning Policy Framework which requires that all policies should be underpinned by relevant and up-to-date evidence. Assessment of local housing need, including overall numbers and tenure mix, should be determined locally based on the relevant, most up to date evidence, because what might be the optimum tenure mix in one place, will not be in another.
• As we recover from the COVID-19 pandemic we need stability and certainty in planning, supported by the appropriate resourcing. The LGA’s Keep Planning Local campaign calls for a locally-led planning system in which councils and the communities they represent have a say over the way places develop, which will ensure the delivery of high-quality affordable homes with the necessary infrastructure to create sustainable, resilient places for current and future generations.
• The proposals also 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 Government’s wider levelling-up agenda.
• Any review of England’s planning system needs to consider not just the delivery of housing, but the many roles planning and local planning authorities undertake together with their communities to facilitate, create, revitalise, and make great places. Other areas that need to be considered include connectivity; accessibility; infrastructure provision; health and wellbeing; access to green spaces; access to schools and jobs; and climate resilience.
• The COVID-19 pandemic has highlighted stark inequalities within our society. This is especially so in health outcomes due in part to poor quality housing and a lack of access to services and green space. Research commissioned by the Government prior to the pandemic revealed that when a locally-led planning approach is removed allowing for nationally prescribed permitted development rights, the outcome has been poorer quality homes and places. Permitted development rights remove the ability of councils and local communities to shape the area they live in and ensure homes are built to a high standard with the necessary infrastructure in place.
• Local democratic oversight and community engagement are critical factors in ensuring trust and transparency in planning decisions and all aspects of the planning system. Any new proposals for our planning system need to ensure there is no loss of local democracy, with councillors and communities being part of the process and having a say on individual planning applications.
• Before any changes to the planning system occur, planning departments already need greater resourcing. Currently, planning fees do not cover the true cost of processing applications and taxpayers subsidise the cost at a rate of nearly £180 million a year. Councils need the ability to recover the costs of processing applications through locally-set fees. 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.
• We support a shift to a more digital planning system that makes the planning system more accessible and efficient. Councils will need the appropriate resourcing to lead on this step-change. 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.
• Any planning reforms should support councils to work towards delivering a new generation of 100,000 high quality social homes per year. The case for investment in social housing as an economic stimulus will grow stronger post COVID-19. Analysis commissioned with the National Federation of ALMOS (NFA) and the Association of Retained Council Housing (ARCH) shows that building 100,000 new social homes per year would result in a £14.5 billion boost to the economy, kick starting our construction sector with 89,000 jobs worth £3.9 billion and adding £4.8 billion in gross value added to the construction sector, with a further £5.7 in the supply chain.
• Council housebuilding and reforming Right to Buy (RTB) are both critical to boosting the supply of new homes. Following many years of lobbying and recent intensive discussions with MHCLG and Treasury, the government announced in March a series of right to buy reforms to give councils increased flexibilities to build more homes. This included: extending the time councils have to spend Right to Buy receipts from three to five years; an increased cap in the percentage cost of new homes councils can fund from Right to Buy receipts, raised from 30% to 40%; and allowing receipts to be used for shared ownership, First Homes, as well as affordable and social housing. Alongside this, the government also introduced a cap on the use of Right to Buy receipts for acquisitions. We will be working closely with councils to monitor the impact of the reforms, including the acquisitions cap, on the delivery of new homes. We continue to call for the Government to allow councils to retain 100 per cent of sales receipts and be able to set discounts locally.
• Any changes to the planning system need to have sustainability at the heart and must consider the improvements and strategic interventions needed to support our shift to a carbon neutral future. Local government plays a vital role in leading the way to address climate change, reduce carbon emissions, and create the sustainable places we need. Many councils have ambitious climate targets and plans in place to achieve net zero carbon before the Government’s 2050 target. Councils need the tools to become exemplars for using new smart technologies and sustainable construction methods supported by appropriate investment.

Amy Fleming, Public Affairs and Campaigns Adviser

[email protected]