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Westminster Hall Debate, Reform of the Planning System, 13 March 2024

Working in partnership with Government, local government can help deliver much needed high-quality housing to achieve the Government’s goal of 300,000 new homes per year.

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About the Local Government Association

  • The Local Government Association (LGA) is the national voice of local government. We are a politically led, cross party membership organisation, representing councils from England and Wales.
  • Our role is to support, promote and improve local government, and raise national awareness of the work of councils. Our ultimate ambition is to support councils to deliver local solutions to national problems.

Key messages

  • Councils already play a vital role in housing supply as planning and housing authorities, as partners with house builders and registered providers, as direct builders, as providers of homes for the most vulnerable and as local place leaders. Local authorities have historically played a key role in delivering housing at scale in England. Working in partnership with Government, local government can help deliver much needed high-quality housing to achieve the Government’s goal of 300,000 new homes per year.
  • The LGA is callingfor the Government to go further and faster in order for councils to be able to properly resume their historic role as a major builder of affordable homes by implementing a six-point plan for social housing.
     
    • Roll-out five-year local housing deals to all areas of the country that want them by 2025 – combining funding from multiple national housing programmes into a single pot. This will provide the funding, flexibility, certainty and confidence to stimulate housing supply, and will remove national restrictions which stymie innovation and delivery.
    • Government support to set up a new national council housebuilding delivery taskforce, bringing together a team of experts to provide additional capacity and improvement support for housing delivery teams within councils and their partners.
    • Continued access to preferential borrowing rates through the Public Works Loans Board (PWLB), to support the delivery of social housing and local authorities borrowing for Housing Revenue Accounts.
    • Further reform to Right to Buy which includes allowing councils to retain 100 per cent of receipts on a permanent basis; flexibility to combine Right to Buy receipts with other government grants; the ability to set the size of discounts locally; and the ability to recycle a greater proportion of receipts into building replacement homes paying off housing debt.
    • Review and increase where needed the grant levels per home through the Affordable Homes Programme, as inflationary pressures have caused the cost of building new homes to rise, leaving councils needing grant funding to fund a larger proportion of a new build homes than before.
    • Certainty on future rents, to enable councils to invest. Government must commit to a minimum 10-year rent deal for council landlords to allow a longer period of annual rent increases and long-term certainty.
  • The LGA shares the Government’s aspirations 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. The Levelling Up and Regeneration Act lays the foundation for this, and the LGA are supportive of the plan-makingprocess being sped up in order to help achieve greater coverage of Local Plans across the country, but only where there is no dilution of plan quality, and democratic and community engagement. 
  • The LGA are fully supportive of the Government’s ambition to bring planning into the digital age and harness digital technologies to improve the planning process. However, we are not convinced that digitisation alone will be the answer to the challenges faced by local planning authorities. Overall, there is a significant challenge in resourcing local planning authority teams. Councils all over England are struggling to recruit and retain planners. Steps have started to be taken by Government, such as awarding funds through the planning skills delivery fund, the Pathways to Planning and Public Practice schemes recruiting more people into the sector, and the uplift to planning application fees; though sudden changes will not appear overnight and we are likely to continue to face the same resourcing and capacity challenges for a while yet. This may have a distinct impact on the roll-out of planning reforms and the laudable aims of digitisation.
  • Planning is not a barrier to housing delivery and growth, with 9 in 10 planning applications approved by councils. 3,118,000 homes have been granted planning permission by councils since 2013 Q4 but over the same period only 2,148,970 have been built. Councils need the tools to both require and incentivise landowners and developers to build high quality homes in a timely way once planning permissions or local plan allocations are given.
  • As we set out in our response to the Government’s consultation on further reforms to Permitted Development Rights in September 2023, the LGA is dismayed and strongly oppose the Government’s pursuit to extend national permitted development rights (PD) further . . PD is an ad hoc, disconnected approach to development that undermines councils’ and their communities’ strategic long-term decisions and place-making ambitions. It also affects their ability to make decisions that reflect local need and preserve and enhance the unique and distinctive character of their area. We cannot see how the Government intends to enshrine both a locally-led planning system with emboldened local leaders through powers in the Levelling Up and Regeneration Act, whilst also pushing forward with new PD rights which disenfranchise those same leaders.
  • Councils are broadly supportive of the guiding principles of the planning reforms in the Levelling Up and Regeneration Act. However, we have significant concerns that the proposed Infrastructure Levy (IL) will deliver fewer, not more, affordable homes,  expose councils to excessive levels of financial risk, and be increasingly burdensome and complex for local authorities to implement and manage. We are urging Government to scrap the IL and work with us and sector partners to improve the current system of developer contributions. 
  • Viability pressures remain one of the greatest challenges for local authorities trying to bring forward affordable housing units. We welcomed the amendments made by Government in the Planning Practice Guidance for viability in 2019 which stated that the “cost of fully complying with policy requirements should be accounted for in benchmark land value” and that “under no circumstances will the price paid for land be relevant justification for failing to accord with relevant policies in the plan”. However, we are concerned that councils continue to report that the plan-led system is still being undermined by the use of viability arguments from developers to avoid the need to meet local plan policy requirements including the provision of affordable housing and providing infrastructure contributions. We would like to see further amendments made to the viability system – for example, removing the requirement to factor in an assumed developer or landowner return or removal of viability assessments as a material planning consideration entirely. Further, we would urge the Government to urgently review the 2019 amendments to the PPG for viability and assess whether they have achieved their intended objectives.
  • Planning fees do not currently cover the true cost of processing planning applications. In 2020/21, 305 out of 343 local authority planning departments operated in a deficit, totalling £245.4 million. Our modelling has shown that even if all application fees were uplifted by 35 per cent, the overall national shortfall for 2020/21 would have remained above £80 million. Whilst we welcome the uplift to planning application fees in December 2023, it is vital that councils have the ability to set planning fees at a level which cover the true costs of processing an application.

Background

Revised NPPF

Housing Targets

We welcome the Government’s announcement that whilst 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. 

Urban Uplift

While it is welcome that the Government is seeking to locate more homes in sustainable locations and in turn support more sustainable transport options, the urban uplift of 35 per cent over and above the number generated by the standard method for the 20 largest towns and cities in England is contrary to the wider reforms of housing targets, by making them ‘advisory’ and introducing new flexibilities to meeting those targets.

Removing the 5-year housing land supply test

The LGA broadly welcomes the removal of the requirement for councils to maintain a rolling five-year housing supply of deliverable land for housing, where their plan is up to date (i.e. adopted within the past five years). Removing this requirement will curb speculative development and ‘planning by appeal’, giving greater clarity and confidence for communities in the future development of their local areas, as well as helping councils plan more strategically for local infrastructure requirements.

Upcoming consultations

We urge the Government to bring forward the upcoming consultations on a revised National Planning Policy Framework and National Development Management Policies as quickly as possible so that local authorities can proactively prepare for the new style of plan-making, due to commence from Autumn 2024. 

Street Votes

In our recent response to the Government’s consultation on Street Vote Development Orders (SVDOs), we raised our concerns that SVDOs will not bring material benefit to the development and delivery of the homes and infrastructure we need in this country, and that it represents a further and unnecessary complexity to a system which can be hard to navigate for communities. 

Uncertainty 

The LGA has 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. Constant changes to national planning policy over successive Government administrations have undermined councils’ critical role in placemaking. 

Contact

Elliot Gregory
Public Affairs and Campaigns Advisor

Phone: 020 7664 3059
Mobile: 07766252833
Email: [email protected]