Planning matters

Following on from Myles’ Stock right there: What does the new Standard Method mean for the West Midlands? Myles and I explore what the Government’s proposed new standard method [SM] changes mean for the local planning authorities [LPAs] in the East Midlands. It provides a comparison between the current SM figures, and the new proposed SM figures, as well as the implications of the proposed changes on both plan-making and decision-taking.

The new local housing needs [LHN] figures, under the proposed SM, for all East Midlands LPAs are set out in the below map. This includes the percentage change between the current SM and the new proposed SM.

Under the new proposed SM, 89% of LPAs in the East Midlands will see an increase in their LHN figures. The chart below compares the regional LHNs under the proposed method with those under the current method. Notably, five authorities — East Lindsey, Bassetlaw, North East Derbyshire, Derbyshire Dales, and Chesterfield — will experience over a 150% increase in their LHN.

Conversely, Derby, Nottingham and Leicester will see a decrease due to the removal of 35% urban centre uplift. Interestingly, Charnwood’s proposed new LHN figure would decrease by c.9% as a result of the proposed changes. This is because Charnwood was projected to see one of the highest household population growths per annum in the region in the 2014-based projections.

Even with some decreases, the East Midlands is projected to deliver 27,382 dwellings per annum (dpa) under the new method, compared to 20,793 dpa under the current method — a c.32% increase. However, it is only a 20% increase when compared to the average delivery rates over the past three years.

Based on Lichfields’ analysis, the new proposed SM would bring an increase for most LPAs within the Nottingham Core Housing Market Area [HMA], which is made up of five authorities ^[1]. Broxtowe, in particular, will see the largest increase, with a 274 dpa boost—71% higher than the current method. This also represents a 45% increase over the currently adopted requirement.

Of the five authorities in the Nottingham Core HMA, only Nottingham will see a decrease in its LHN due to the removal of the 35% urban uplift, resulting in a reduction of approximately 394 dpa. As a result, the new SM still projects a figure that is 9 dpa higher than Nottingham’s average delivery over the past three years.

With respect to Leicester and Leicestershire HMA, which consists of 8 authorities ^[2], the most significant changes will be seen in Melton and Oadby and Wigston. With the new SM, these authorities will see an increase of 92-96% compared to their current SM figures. With respect to dwelling numbers, these authorities will be expected to deliver an additional c.178 dpa and c.191 dpa more than with the current method respectively.

Whilst Leicester will see a decrease of 31%, due to the removal of 35% urban centre uplift, compared to the LHN figure with the current SM, this figure is still c.676 dpa higher than what the authority has delivered on average over the past three years.

Overall, the Leicester and Leicestershire HMA will only see a marginal increase of 8% under the new SM – largely driven by the removal of the 35% urban uplift from Leicester. Whilst, on the face of it, the issues surrounding Leicester’s purported unmet housing need may be ameliorated, most of the constituent authorities' indigenous needs have increased such that they will likely still need to plan for higher housing needs than they currently area.

As set out in detail here, in order to address the housing needs generated by the new proposed SM, the Government’s draft NPPF consultation proposes a transitional arrangement for plan-making, which will have significant and immediate implications for East Midlands authorities.

Lichfields’ analysis of East Midlands LPAs indicates that these changes will have an immediate impact on most authorities. Over half of the East Midlands LPAs (35 in total) currently at the Regulation 18 stage will need to use the new SM immediately after the new NPPF is adopted. Sixteen LPAs, either at the Examination stage or yet to start their local plan review, will need to incorporate the new SM in future new style Local Plans. However, Amber Valley will need to update its Emerging Plan within 18 months to meet the new SM requirements, addressing an additional 306 dpa, as it is currently at the Regulation 19 pre-submission stage and falls more than 200 dpa short of the new SM.

This is of course subject to LPAs following their Local Development Scheme timescales, as of Autumn 2024, when the changes are expected to come into effect. These changes will invariably place pressure on LPAs as they work to meet these targets within a tight timeframe – albeit, the Government has stated that will provide “direct funding support to help these authorities progress their plans to examination quickly” [3].

The NPPF consultation proposes to reverse the changes made in the December 2o23 NPPF version, in respect of the requirement for LPAs to demonstrate a five year housing land supply (“5YHLS”), and return to the September 2023 approach. What this means for LPAs that do not have a Local Plan that is up to date, in terms of 5YHLS, is that the SM will be used to calculate the area’s housing need.

Lichfields’ analysis suggests that by Autumn 2024, 26 out of 35 LPAs in the region will see immediate impacts on their 5YHLS, with 22 authorities required to provide additional dpa and four seeing a reduction in needs. Nine authorities are not expected to experience an immediate impact on their 5YHLS.

In practical terms, this means that many East Midlands LPAs will likely not be able to demonstrate a 5YHLS. By way of example, Hinckley and Bosworth’s purported 5.6 year supply, would decrease to 3.34 years if the draft NPPF and new SM are adopted in Autumn 2024. As a result, many LPAs in the region will need to identify land to accommodate these additional requirements in due course.

The proposed new SM will necessitate significant changes to how many LPAs in the East Midlands are approaching plan-making and decision-taking once the NPPF consultation is completed and the proposed changes are adopted. Whilst authorities such as Derby, Nottingham and Leicester will see a decrease in their LHN figure, most authorities will need to find markedly more land to accommodate the proposed additional dwellings generated by the new SM. A failure to respond positively will inevitably lead to greater planning by appeal when the required 5YHLS cannot be satisfied.