Planning policy, House of Commons - 17 January 2023

• Councils are planning and housing authorities; partners with house builders and registered providers; direct builders, and providers of homes for the most vulnerable. They are committed to working with Government and developers to meet the Government’s aspirations of 300,000 new homes per year, with land for more than 2.6 million homes allocated in Local Plans.
• It is important that new homes are built in the right places with the right infrastructure 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 and include affordable homes.
• Councils are broadly supportive of the guiding principles of the planning reforms in the Levelling Up and Regeneration Bill, including principles to embed a plan-led system; empowering local leaders and communities; with stronger regeneration powers; and a stronger framework for protecting and enhancing the environment.
• However, some detail is needed ensure these guiding principles can be applied in practice. We want to work with the government to support the effective implementation of the reforms and ensure that the reforms are a success for local government.
• Supporting councils to build a new generation of high-quality, energy efficient council homes also has to be a national priority if levelling-up ambitions are to be met. This needs to include urgent reform of the Right to Buy scheme to allow councils to keep 100 per cent of receipts from sales of homes and the ability to set discounts locally. We are calling on the Government to make an amendment to the Levelling Up and Regeneration Bill which would remove all clauses relating to the sale of vacant higher value local authority housing in the Housing and Planning Act 2016 (Clauses 69-79). This will implement the Government’s commitment to not take forward the powers to require councils to sell higher value council homes outlined in the Social Housing Green Paper.
• Councils must have the flexibility to set planning fees at local level, or at the very least be able to vary planning fees and charges to cover their costs relating to planning, which could include the employment of qualified planners. This would put councils in a stronger position to address the issue of resourcing in the planning sector including a shortage of qualified planners. Planning fees do not cover the true cost of processing planning applications. Taxpayers currently subsidise the cost at a rate of nearly £180 million a year. Councils need the ability to recover the costs of processing applications, and therefore should be able to charge an appropriate fee. Therefore, while we welcome the increase in planning fees alongside the Bill, it does not go far enough to deliver a well-resourced planning sector.
• The LGA is concerned that local plans will be constrained in the event that they conflict with National Development Management Policies, in which case the latter will take precedence. This is critical to ensure that that one of the key principles of the planning reforms - ‘a genuinely plan-led system’ - is enshrined in the Bill. If the Government decides to retain the current proposal, then flexibility must be built into the system to enable councils to respond to local, complex and changing circumstances.
• More than 1 million homes that have been granted planning permission are still to be built out. The introduction of commencement notices in the Bill is a welcome starting point for addressing the ongoing challenges around build-out of schemes following planning permission. It is good that this measure will be introduced alongside powers for councils to deter and tackle non-compliance, including the possibility of a fine. We welcome the Secretary of State’s commitment to bring forward additional measures to tackle slow build-out. Specifically, we would welcome the introduction of powers to allow councils to charge full council tax for every unbuilt development from the point the original planning permission expires. It should also be made easier for councils to use compulsory purchase powers to acquire stalled housing sites or sites where developers do not build out to timescales contractually agreed with a local planning authority.
• We broadly welcome the announcement to remove the requirement for a rolling five-year land supply as it will curb speculative development and it will give more weight to local plans when making decisions on planning applications. However, we urge the Government to urgently revoke Permitted Development Rights in order to strengthen the role of local plans. As a result of Permitted Development Rights, more than 18,000 affordable homes have been lost and therefore this policy is at odds with the national ambition to increase the supply of affordable housing.
• The introduction of measures that will genuinely make the Compulsory Purchase Order (CPO) process more streamlined and efficient for councils is an encouraging step. It is good the government has stated its intention to reform the Land Compensation Act (1961) to diminish the hope value (the term used to describe the market value of land based on the expectation of getting planning permission for development on it) and allow councils to purchase land closer to its existing use value, which will make CPOs less costly for councils to use. However, we urge the Government to remove the hope value entirely from the Land Compensation Act so that land can be purchased at its existing use value.
• We support the principle of councils being able to set up locally-led urban development corporations for the purpose of supporting regeneration projects and also the principle of being directly accountable to councils, rather than the Secretary of State. It is good that the cap on the number of board members and the aggregate borrowing cap are to be removed. We have long been calling for the removal of the borrowing cap, which limits the scope of Development Corporations, creates uncertainty about investment beyond the cap and affects the delivery of Local Plans. We would also welcome powers to enable the creation of zero carbon and nature-rich places; the power to use a CPO; and ensure there is clear guidance and policy support in place for councils looking to establish successful Development Corporations.
• We welcome the confirmation by the Secretary of State that although housing targets will remain, they will be a starting point with a flexibility to take account of local circumstances. This is because the algorithms and formulas used by the Standard Method can never be a substitute for local knowledge and decision-making by councils and communities who know their areas best. However, it would be helpful to have clarity about what “advisory” means in practice.
• We also welcome the commitment from government to consult on how the targets can better take account of local density. We need to increase and accelerate the delivery of affordable housing – largely at social rent. It is our view that 100,000 new social rented home per annum is required to meet the housing needs of communities. We recognise that if advisory housing targets are to hold any credibility, those targets must be realistic and achievable. Therefore, advisory housing targets must be aligned – and must continue to be re-aligned going forward – with the latest population projection data published by the Office for National Statistics.

You can find our latest briefing ahead of the Second Reading of the Bill in the House of Lords stages on our website. Our messages regarding the housing and planning elements are:

Planning

Councils are broadly supportive of the guiding principles of the planning reforms, to embed a plan-led system; empowering local leaders and communities; with stronger regeneration powers; and a stronger framework for protecting and enhancing the environment. However, some detail is needed ensure these guiding principles can be applied in practice. We want to work with the government to support the effective implementation of the reforms and ensure that the reforms are a success for local government. We want to work with the government to support the effective implementation of the reforms and ensure that the reforms are a success for local government.

• The Levelling Up and Regeneration Bill also introduces a number of reforms to the planning system:
  • A new Infrastructure Levy. We welcome the government’s stated commitment to ensure that the new Infrastructure Levy will be non-negotiable and set locally. But if we are seeking to improve the system, then the Levy must deliver more affordable housing than the current Section 106 system including those homes lost as a result of viability. It is vital that new occupants of homes and wider communities get the infrastructure they need, and that councils can access sufficient funding for this infrastructure in line with the ambition in Local Plans. We would therefore urge the government to reconsider the timing of the Levy. To enable sufficient financing to deliver the necessary infrastructure set out in local plans, there must be a financial mechanism to secure upfront infrastructure at an earlier stage than the point of occupation. We look forward to responding to the consultation on the Levy and councils would welcome the opportunity to work with the Government to develop the detail of this reform.
  • New powers for councils to bring vacant properties back into use. This high street rental auction power is an encouraging step, and we will work with the Government to ensure that it is simple, inexpensive and effective for councils to use.
  • A proposal to introduce a new approach to environmental assessment, we will be taking action to ensure that it strengthens environmental protections whilst ensuring that councils can still deliver the new homes and supporting infrastructure that the country needs.
  • Changes to neighbourhood planning and digitalising the system in an attempt to make local plans more accessible.

Supporting councils to build a new generation of high-quality, energy efficient council homes also has to be a national priority if levelling-up ambitions are to be met. This needs to include urgent reform of the Right to Buy scheme to allow councils to keep 100 per cent of receipts from sales of homes and the ability to set discounts locally. We are calling on the Government to make an amendment to the Levelling Up and Regeneration Bill which would remove all clauses relating to the sale of vacant higher value local authority housing in the Housing and Planning Act 2016 (Clauses 69-79). This will implement the Government’s commitment to not take forward the powers to require councils to sell higher value council homes outlined in the Social Housing Green Paper – “We will not require local authorities to make a payment in respect of their vacant higher value council homes and are exploring new flexibilities over how they spend Right to Buy receipts.”

The Secretary of State’s Written Ministerial Statement of 6 December 2022 asserted that the National Development Management Policies will not constrain the ability of local areas to set policies on specific local issues. However, in reality, local plans will be constrained in the event that they conflict with National Development Management Policies, in which case the latter will take precedence. We have previously sought an amendment to reverse this proposal so that local plans will take precedence in the event of conflict. This is critical to ensure that that one of the key principles of the planning reforms - ‘a genuinely plan-led system’ - is enshrined in the Bill.  Further, local plans are subject to robust and extensive testing during its preparation with communities, which includes a thorough examination process to establish its soundness. Therefore, local plans should carry full legal weight and particularly over policies and plans that is not subject to the same level of scrutiny. But if the government decides to retain the current proposal, then flexibility must be built into the system to enable councils to respond to local, complex and changing circumstances. This is because we are concerned that setting generic planning policies at national level will leave councils unable to tailor such policies to local circumstances. The policy must be workable at local level.

Councils are committed to working with government and developers to build the housing the country needs, with land for more than 2.6 million homes allocated in local plans and nine in 10 planning applications being approved. However, more than 1 million homes that have been granted planning permission are still to be built out. The introduction of commencement notices in the Bill is a welcome starting point for addressing the ongoing challenges around build-out of schemes following planning permission. It is good that this measure will be introduced alongside powers for councils to deter and tackle non-compliance, including the possibility of a fine. We welcome the Secretary of State’s commitment to bring forward additional measures to tackle slow build-out. Specifically, we would welcome the introduction of powers to allow councils to charge full council tax for every unbuilt development from the point the original planning permission expires. It should also be made easier for councils to use compulsory purchase powers to acquire stalled housing sites or sites where developers do not build out to timescales contractually agreed with a local planning authority.

We broadly welcome the announcement to remove the requirement for a rolling five-year land supply as it will curb speculative development and it will give more weight to local plans when making decisions on planning applications. However, we urge the Government to urgently revoke Permitted Development Rights in order to strengthen the role of local plans. As a result of Permitted Development Rights, more than 18,000 affordable homes have been lost and therefore this policy is at odds with the national ambition to increase the supply of affordable housing.

The introduction of measures that will genuinely make the Compulsory Purchase Order (CPO) process more streamlined and efficient for councils is an encouraging step. It is good the government has stated its intention to reform the Land Compensation Act (1961) to diminish the hope value (the term used to describe the market value of land based on the expectation of getting planning permission for development on it) and allow councils to purchase land closer to its existing use value, which will make CPOs less costly for councils to use. However, we urge the government to remove the hope value entirely from the Land Compensation Act so that land can be purchased at its existing use value. This will ensure that compensation is fair and compulsory purchase orders can be used more easily by councils, when necessary, as a last resort.

We support the principle of councils being able to set up locally-led urban development corporations for the purpose of supporting regeneration projects and also the principle of being directly accountable to councils, rather than the Secretary of State. It is good that the cap on the number of board members and the aggregate borrowing cap are to be removed. We have long been calling for the removal of the borrowing cap, which limits the scope of Development Corporations, creates uncertainty about investment beyond the cap and affects the delivery of Local Plans. We would also welcome powers to enable the creation of zero carbon and nature-rich places; the power to use a CPO; and ensure there is clear guidance and policy support in place for councils looking to establish successful Development Corporations.

We welcome the confirmation by the Secretary of State that although targets will remain, they will be a starting point with a flexibility to take account of local circumstances. This is because the algorithms and formulas used by the Standard Method can never be a substitute for local knowledge and decision-making by councils and communities who know their areas best. We also welcome the commitment to consult on how the targets can better take account of local density. However, it would be helpful to have clarity about what “advisory” means in practice. We need to increase and accelerate the delivery of affordable housing – largely at social rent. It is our view that 100,000 new social rented home per annum is required to meet the housing needs of communities. We recognise that if advisory housing targets are to hold any credibility, those targets must be realistic and achievable. Therefore, advisory housing targets must be aligned – and must continue to be re-aligned going forward – with the latest population projection data published by the Office for National Statistics. The principle in planning of using the most up to date evidence must always be upheld. The most recent 2022 projection, which is based on the population estimate from 2020, indicates that population forecasts for both mid-2030 and mid-2045 are at its lowest point in eight years.

Councils must have the flexibility to set planning fees at local level, or at the very least be able to vary planning fees and charges to cover their costs relating to planning, which could include the employment of qualified planners. This would put councils in a stronger position to address the issue of resourcing in the planning sector including a shortage of qualified planners. Planning fees do not cover the true cost of processing planning applications. Taxpayers currently subsidise the cost at a rate of nearly £180 million a year. Councils need the ability to recover the costs of processing applications, and therefore should be able to charge an appropriate fee. Therefore, while we welcome the increase in planning fees alongside the Bill, it does not go far enough to deliver a well-resourced planning sector.

We are concerned that the introduction of street votes risks stifling the production and implementation of local plans. We want to work with the government to enhance opportunities for engagement and reach a wider audience within the process of developing local plans.

It is right that local plans should be kept up to date. However, we are concerned about the proposal to deploy Local Plan Commissioners to take over plan-making in some cases. An approach that seeks to understand what the blockages are and seeks to resolve them, for example, through a mutually agreed sector-led approach, will be more beneficial in the long-term than the imposition of a plan on an area.

The proposal to introduce a new approach to environmental assessment must strengthen environmental protections whilst ensuring that councils can still deliver the new homes and supporting infrastructure that the country needs. We want to work with the Government as the outcomes are developed.

We support the principle of local design codes, which will further empower communities to have input into the design and shape the area in which they live. However, the principles that underpin design codes are undermined by the permitted development rights policy, which should be revoked.

We welcome the extension of planning protections to cover historic environments like registered parks and battlefields and World Heritage Sites. However, archaeological sites must also receive protection, most of which are undesignated and managed through the planning process.

It is good to see that any new Infrastructure Levy will be non-negotiable and set at a local level. We will want to work with Government to ensure that it is a success and that it delivers more affordable housing and infrastructure contributions at a local authority level than the existing systems for developer contributions.

The High Street Rental Auction power is broadly welcome. We would expect this power to be simple, inexpensive and effective to use if required.

We support the principle of councils being able to set up locally-led urban development corporations for the purpose of supporting regeneration projects. It is good that the cap on the number of board members and the aggregate borrowing cap are to be removed.

We broadly welcome the introduction of additional tools and powers to achieve compliance and deal with those that breach planning provisions.

Changes will be made to neighbourhood planning under the Bill. A digitalised system will seek to make local plans more accessible and increase the opportunity for engagement, which the LGA welcomes.

While it is welcome that the Government are urging communities to have more say over planning matters, the “Standard Method”, which uses a formula to identify the minimum number of homes expected to be planned for, is still used by the Government and councils are also expected to use it. For example, councils in the 20 largest cities required to plan for a 35 per cent increase over and above the number generated by the Standard Method. Algorithms and formulas can never be a substitute for local knowledge and decision-making by councils and communities who know their areas best. We would urge the Government to consider how the Standard Method is currently used and whether it fits with the Government’s messaging on involving communities in planning decisions.