Planning matters

There has been plenty of conjecture about the proposed NPPF changes and whether the Government’s 1.5 million delivery target is within reach, but what hasn’t hit the headlines is the implications for our major urban areas. With a renewed emphasis on ‘brownfield first’ being the starting point, many urban Council’s will need to work harder than ever to provide the homes that society needs.

On the one hand, the NPPF (new §122) introduces an “acceptable in principle” support for proposals on brownfield land within settlements for homes and other identified needs, but conversely, the new Standard Method for calculating housing need sees a reduction in targets across the majority of the country’s largest urban areas. Are these “acceptable in principle” sites going to need to work harder than ever too? The numbers suggest so.

Outside the capital, compared to the current Standard Method, 90% of Authorities will see an increase in their local housing need figure. However, the pattern for urban Authorities is much different, with 13 of the largest 20 urban areas seeing an overall reduction. Of those 7 that do see an increase (shown in green), the increase is only relatively small. This can partly be explained by the new Standard Method removing the previous ‘urban uplift’ which added 35% to an areas housing need figure – the intention is to remove what was an arbitrary addition or redistribution of housing need to urban centres.

The more concerning issue for the new Government will be the fact that only 1 area, Manchester, has an average annual net addition rate higher than its new Standard Method need figure. To put this into perspective at national level, it means our biggest economic centres for growth will be expected to deliver 118,974 new homes a year, but their past performance suggests an average delivery of just 63,177.

So, despite urban housing requirements reducing, past performance would indicate that these new mandatory targets will still not be met, and the gap will be significant. Low levels of delivery can give rise to major social issues including affordability and homelessness, whilst housing waiting lists continue to grow and the financial burden of temporary accommodation continues to bite for many Local Authorities.

Of course, it has been a challenging time for the development industry in the wake of Brexit, Covid-19, construction cost inflation and stubborn interest rates, let alone the lack of a long term rent agreement for Housing Associations who haven’t been able to commit to development activities and are often spending greater proportions of capital on existing stock. Even allowing for a marked improvement in delivery in future years, there is still likely to be a big gap to fill, meaning both the new targets and the overarching aspiration for 1.5million homes must be a tall order. Our previous ‘Banking on brownfield’ analysis in June 2022 concluded that even if every identified site on local authority Brownfield Registers was built to its full capacity, the capacity of previously-developed land equates to 1.4million net dwellings. Even with significant government support, brownfield land can only be part of the solution to the housing crisis, and even if the majority is used in the first 5 years of this Government, where does the future supply come from?

Many of these urban areas are constrained by national protections too which will further supress delivery on their edges and outside of settlement boundaries, unless there are major alterations via Local Plans. This is often most tangible with Green Belt designations in areas like London, Greater Manchester and the Liverpool City Region, Birmingham, Wolverhampton and Coventry, Leeds and Sheffield, Bristol, Newcastle, and Nottingham. In this context the NPPF retains and strengthens the Duty to Cooperate by advocating strategic planning across boundaries to achieve sustainable growth and meet housing needs. We may see the reintroduction of regional spatial planning, but in the interim urban areas are facing a mighty challenge to meet even their own (reduced) targets, yet could be asked to meet needs of surrounding areas too.

With scant availability of sites and viability being a major challenge for urban development, there will need to be a step change in local decision making and heavy levers pulled at national level to encourage more joint venture and partnership working, pump priming delivery through grant to remediate land and bring sites to market, and a big role for Homes England as the pivotal Government vehicle to drive this change. The signs are encouraging with the recent announcement of a new homes accelerator programme which seeks to bring forward stalled sites that already benefit from permission, and Matthew Pennycook MP (Minister of State for Housing, Communities and Local Government) writing to Chair of Homes England, Peter Freeman, to set out his seven immediate priorities, including “doing everything in its power to accelerate development and increase delivery in 2024/25.”

In light of the impending policy changes and revised targets, it remains to be seen whether we will start to see Local Authorities stepping up to this tall order, and in that vein being a bit braver when it comes to building heights and massing to achieve higher densities on deliverable urban sites. The development industry would benefit from a top-down acknowledgment from Government that we should collectively seek to optimise the potential of urban sites when they do become available, and that tall buildings should be acceptable in principle too. This is a culture change needed in many authorities where applicants and design teams spend significant time in pre-app discussions advocating for height and density in well-connected sustainable locations, a situation that shouldn’t really be the case. Time would be better spent focussing on quality of development, place making and delivery, together with realising social value and responding to the climate emergency. Now is the time for Local Authorities of all stripes to welcome developers and housebuilders through the door, work with them to find a way for development to be brought through the planning system efficiently and effectively. If that doesn’t happen then we should expect a raft of planning appeals and potentially a number of Secretary of State recoveries, with odds of success stacked in the favour of an appellant given the political mood, assuming they have taken a responsible and well-advised approach to their planning applications.

Of wider interest to those looking to develop urban brownfield sites, the NPPF (§63) continues to advocate for Local Plan evidence bases to include a thorough assessment of rental needs. With this sector having strong institutional investment backing, and therefore ability to deliver at scale and at pace, it will be important for the urban authorities to make sure they are planning strategically for Built to Rent, Purpose Built Student Accommodation and Co-living in particular, as these tenures can make big dents in the housing need requirements, and may release traditional stock back to the market. The NPPF (§69) contains explicit support for mixed tenure sites, as are often delivered in urban areas where building mixed and balanced communities is so intrinsic to social cohesion and realising the value and opportunity arising from development and investment.

The NPPF consultation ended on 24^th September, but there will be much work to do in the weeks, months and years ahead to make the most of our finite brownfield land opportunities and achieve the 1.5 million hopes that Government is striving for.

 

The headline figure from Labour’s manifesto of building 1.5 million new homes in five years is now a well reported ambition of Government, in order to “recapture the dream of homeownership [and to] support families and communities[1]”.

To achieve this, a fundamental part of the solution lies in the planning system, and specifically, robust and up-to-date Local Plans to help guide enough of the right type of housing in the right places. As part of the Local Plan process and seeking to deliver 1.5 million new homes, Government has proposed a new Standard Method (SM) for calculating how many homes should be built in each local authority area[2].

A core component of achieving the delivery of the required new homes is ensuring an up-to-date Local Plan and identifying sufficient sites to deliver a minimum of five years’ worth of housing. Paragraph 76 of the NPPF: Draft Text for Consultation sets out that Local Planning Authorities should:

“…identify and update annually a supply of specific deliverable sites sufficient to provide a minimum of five years’ worth of housing⁴² against their housing requirement set out in adopted strategic policies, or against their local housing need where the strategic policies are more than five years old⁴³.”

Critically, Footnote 43 includes the following caveat:

“…unless these strategic policies have been reviewed and found not to require updating. Where local housing need is used as the basis for assessing whether a five year supply of specific deliverable sites exists, it should be calculated using the standard method set out in national planning guidance.” (Emphasis added)

This is critical because, whilst footnote 18 of the NPPF emphasises that “reviews at least every five years are a legal requirement for all local plans...” there is almost no detail on the process or requirements for a review of strategic policies. Planning Practice Guidance (PPG) [3] sets out what authorities can consider when determining whether a Plan should be updated, not what they must It also affirms that “A local planning authority can review specific policies on an individual basis. Updates to the plan or certain policies within it must follow the plan-making procedure; including preparation, publication, and examination by the Planning Inspectorate on behalf of the Secretary of State.” (Paragraph: 069 Reference ID: 61-069-20190723 Revision date: 23 07 2019). However, the missing piece in the guidance is how a decision by a local planning authority not to update policies, following their internal review, is scrutinised.

Local Plans, rightly so, are evidence based and scrutinised through a public consultation process followed by an independent examination before being formally adopted. Indeed, NPPF paragraph 31 states that: “The preparation and review of all policies should be underpinned by relevant and up-to-date evidence…” and paragraph 35 affirms that “Local plans and spatial development strategies are examined to assess whether they have been prepared in accordance with legal and procedural requirements, and whether they are sound.” Yet the limited guidance and detail as to what a review of the strategic policies should include, and lack of scrutiny, leaves the process entirely up to the local authority, officers and members whose Plan is being scrutinised.

Whilst some LAs may utilise the Planning Advisory Service (PAS) Local Plan Route Mapper Toolkit from 2021 this is not mandatory and not all do or will.

Consequently, this could lead to scenarios, as seen in the North East, whereby an authority is failing to deliver against its identified housing requirement and the NPPF / Housing Delivery Target mandates that a review is undertaken. However, the review concludes that no significant action needs to be taken.

An example includes North Tyneside Council who acknowledged that “in relation to housing supply the Local Plan is not up to date” but ultimately concluded that “its Local Plan remains a sound Local Plan and does not propose to undertake further work to update its Local Plan at this time[4].”

Another example is Gateshead Council who acknowledged “slower than expected delivery” yet concluded in the review of the Plan that “an update of the [plan] or any of its component policies is not required at this time[5].” Whilst the authority did produce an Action Plan, the situation has worsened and the Council’s current published position which is (at March 2023) that it has a 3.4 year supply of housing.

This in turn leads to continued under delivery of housing against the identified housing requirement for a further five years with limited scope for intervention from Government; at the end of the period this could lead to a decade’s worth of under delivery of much needed housing. It is however notable that Chapter 10 of the recent consultation on proposed reforms to the NPPF sought views on whether to update the local plan intervention policy.

It is often the case with changes to guidance, such as the current consultation on the NPPF, that there is detailed scrutiny of the interpretation of words, sentences and punctuation and this can be a lengthy process. In this case some basic guidelines could be referenced in the NPPF then set out in PPG. Whilst even a simplified consultation, review and examination process would inevitably require more LPA and PINS resource, we consider the benefits it would bring in terms of housing delivery would represent good value for money.

It will be interesting to see whether this issue is addressed through the recent responses to the NPPF consultation and whether changes will require public consultation and independent examination when reviewing a Local Plan.