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.
- 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.
- The Planning for the Future White Paper includes proposals for a fundamental review of the existing planning system, requiring changes to primary and secondary legislation. We support 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.
- 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.
- 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, and we believe the proposed new method should be optional to use for local planning authorities where it is considered to robustly produce a number that accurately reflects local housing needs.
- 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 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, Delivery of council housing: a stimulus package post-pandemic, and Building Post-Pandemic Prosperity.
Planning for the Future White Paper
- 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. You can read the LGA’s full response to the White Paper consultation.
- 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.
- 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 forthcoming Devolution White Paper.
- 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. We have long called for the Government to allow councils to retain 100 per cent of sales receipts, set discounts locally and be able to adjust the proportion of receipts they are able to reinvest in new supply.
- 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.
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.
- As set out in our full response to the consultation, 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 for assessing local housing need, as set out in the Changes to the current planning system consultation, 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.
Amy Fleming, Public Affairs and Campaigns Adviser
Amy is the LGA’s public affairs lead on devolution, economic growth, skills and employment, EU, housing and homelessness and the environment. She also supports the Devolution All-Party Parliamentary Group. Amy joined the LGA in April 2020, having previously worked for St Mungo’s.