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New London Plan Panel Report: Homes for all?

New London Plan Panel Report: Homes for all?

Harry Bennett & Martin Taylor 02 Dec 2019
We’ve been digesting the Inspector Panel findings and the potential implications following the examination of the London Plan. You can view our thoughts on other topic areas here but below we take a look at the all-important issue of housing. On housing, the Panel report finds that the 2017 SHMA provides a reliable starting point for the housing needs of London, agreeing that 66,000 additional homes per year is properly calculated, a need of 660,000 homes over 2019-2029. But in respect of meeting that need, the Panel’s findings diverge from the Mayor’s approach which relied heavily on theoretical small site capacity modelling contained within the SHLAA. The submitted new London Plan (‘NLP’) proposed a 10-year capacity-based target of 649,350 homes with a target for 245,730 on small sites (below 0.25 hectares in size). But the Panel recommends cutting the small sites target to 119,250 and hence overall delivery target to 522,850 (a 19.5% reduction) citing that they are “sceptical about the delivery” from small sites and that the assumed delivery from this source was not “realistically achievable”. This cut has a disproportionate impact on outer London where the SHLAA assumed most of the small site capacity could be found - at one extreme, in the case of Bromley 72% of its housing target was made up of small sites alone. While the reduction to London’s total small sites target is 51%, this corresponds to a 61% reduction to the small sites housing targets in outer London compared to a 26% reduction in inner London, with many of those boroughs seeing no or minimal cuts (see map below). At a local scale, Bromley and Richmond’s overall ten-year housing targets have in effect been halved and as an example Havering’s overall target has fallen near a third. Despite the cut, the revised figures would still represent a 14% increase in delivery from small sites compared to the 2004 to 2016 trend for London as a whole (see table below), a still stretching target which would undoubtedly see a keen focus on increasing density at the neighbourhood level. Interestingly, the recommendations actually represent a 5% decrease on the 12 year trend for inner London boroughs. Flowing from the headline number, the Panel report confirms the principle of the housing requirement operating as 10-year targets, rather than annualised numbers, with a need for the Mayor to take a leading role in setting a trajectory for how that target will be met. Initial analysis by Lichfields indicates any trajectory will need to ramp up delivery over the decade from 32,000 new homes last year, to close to 70,000 homes per year by 2028-29: doubling output over the life of the Plan (see graph below).The implication of this suggested reduced housing target is an increase in London’s unmet housing need, particularly in outer London boroughs, which under the Panel’s recommendations would crystallise at c.14,000 homes per year. The Panel highlights that “it is a major concern that the targets are so far below the assessed need”, but whilst noting that addressing the issue would likely require considerations of Green Belt review or co-operation with local authorities in the wider south-east indicate it is better to “proceed on the basis of an adopted plan rather than one that is in limbo.” This of course leaves wider questions for how that unmet need could and should be reflected in Local Plans progressing across London and the south east. Important for plan-making at the Borough level is that the Panel conclude ‘rolling forward’ the proposed housing targets over a longer period would not be effective. This has to date been usual practice to come to minimum 15-year targets for Local Plans. The panel recommends a change such that housing targets beyond the 10-year period should be adjusted, among other considerations, to take consideration of “local evidence of identified housing capacity”. This will likely see stepped targets in Borough’s Plans and it will be interesting as to how differing authorities interpret this requirement to consider longer term capacity; some might seek to be more expansive in how they define their local capacity (perhaps hand-in-hand with potential Green Belt reviews), whilst others might seek to be more restrictive in defining this, with any targets beyond the 10-years reverting back towards something akin to a small sites windfall allowance. Either way, the panels recommendations would place this firmly in Borough’s hands, deleting the requirement for this process to be “in consultation with the GLA”. Finally, a number of key housing points remain unchanged or are agreed with by the Panel. These include: Agreeing that increasing total housing figures to assist the delivery of more affordable housing would be ineffective given the capacity-based approach to setting housing targets; Agreeing that the threshold approach to affordable housing, set at 35% for private land, and the ‘fast track route’ to viability testing in terms of affordable housing are reasonable and justified; Agreeing that the minimum tenure mix requirements in Policy H7 (30% social rent, 30% intermediate, 40% mix based on local needs) are justified allowing flexibility at a borough level; and Acknowledging that when the London Plan is adopted its housing targets will take precedence over those existing Borough plans even where they are recently adopted: with no transitional arrangements in place. This will create difficulties for certain authorities to demonstrate a five-year supply of deliverable housing sites. Following the previous Further Alterations to the London Plan in 2015, and despite the Panel’s recommendations, this still represents a further step-up in the targeted delivery of homes in London. However, the clear implication and conclusion from the Panel is that this London Plan will not result in ‘homes for all’ and still leaves some unanswered questions as to how the gaps between current housing delivery, the increased housing targets and the higher still housing needs will be bridged. See our other blogs in this series: In search of London’s future industrial land Lichfields will publish further analysis on the London Plan Panel Report and its implications in due course. Click here to subscribe for updates.

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A lack of action in the North-West?

A lack of action in the North-West?

Andy McLaren 29 Nov 2019
The Ministry of Housing, Communities and Local Government [MHCLG] recently announced that it would be postponing the results of the 2019 Housing Delivery Test [HDT] until after December's general election. This is due to ‘purdah’ rules, which forbid government departments from making political announcements during an election campaign[1]. As many will now be aware, the HDT forms the basis for assessing whether Councils are delivering the homes they need, by comparing past housing delivery to housing need. A series of graded ‘penalties’ are imposed depending on the extent of any shortfall (Figure 1), with the bar continually raised up to November 2020. Figure 1 Housing Delivery Test Thresholds Source: MHCLG; Lichfields If a Council falls below 95% of their required delivery, they will be expected to produce an Action Plan within 6 months which: Identifies the reasons for under delivery; Explores ways to reduce the risk of further under-delivery; and, Sets out measures the authority intends to take to improve levels of delivery. However, it is unclear what the sanction will be for Councils that fail to comply with this requirement.  The 2018 HDT results were published back in February 2019, and yet a number of authorities in the North West [NW] have yet to produce their required Action Plan. This blog explores this lack of action in more detail and provides analysis of the Action Plans which have been produced in the NW so far. Who has produced an Action Plan? From a NW perspective, the region is generally not performing well against the HDT (Figure 2).  No authority failed the test completely, though 13 of 39 Local Authorities fell below the 85% threshold in 2018, and should therefore produce an Action Plan (as well as apply a 20% buffer to their housing land supply).  Figure 2 Housing Delivery Test 2018: North-West Districts Source: MHCLG / Lichfields Based on analysis conducted by Planning Magazine[2], of the 13 NW Councils requiring intervention, 4 authorities had not produced an Action Plan within 6 months as required by national policy (Warrington, Blackburn, Tameside and Rossendale)[3]. Warrington in particular had not produced an Action Plan despite delivering just 55% of their LHN requirement.   On a national scale, of the 108 authorities required to produce an Action Plan, only 20% had managed to publish one by the August deadline. Considering the emphasis that the Government has placed on the HDT, this is a disappointing statistic, but one which should improve as Councils become more familiar with the process. However, there appears to be no explicit sanction for failing to produce an Action Plan within the 6 month deadline (of the HDT’s publication). The Practice Guidance[4] states that Councils are ‘expected’ to produce Action Plans. It is clear that Action Plans are not viewed as a punishment, but rather as a solution to under-delivery to redress poor performance.  The question is, whether they contain ‘actions’ that will deliver any meaningful increase in housing delivery.  What do they contain? The Practice Guidance[5] sets out a list of actions which Councils ‘could’ consider as part of an Action Plan (Figure 3). Figure 3 Potential Actions Source: Planning Practice Guidance Based on the Planning Magazine[6] analysis, which assessed the content of all published Action Plans across England and Wales, it becomes clear that many authorities have chosen the easier of these options. The majority of the actions do not provide any real bite, with many actions containing soft buzz words such as ‘encourage’, ‘promote’ and ‘consider’.  Analysis of the first group of nine Action Plans published across the NW reveals that actions such as ‘member training’, ‘shifting resources towards planning departments’ and ‘increased engagement with developers’ appear with regularity.  Crucially, there appears to be limited provision for practical improvements to boost supply, such as committing to release safeguarded land or delivering infrastructure or funding to bring forward / unlock stalled sites. There are some good initiatives being put forward, such as policy requirements to build at higher densities and developing small sites, though these have not been consistently proposed across the North West.  The creation of Council-owned development arms provides another potentially helpful initiative, with numerous Councils citing this within their Action Plans.  Though realistically, this could only have a meaningful effect in the longer-term, and is unlikely to be a short-term solution. So far, the requirement to produce an Action Plan appears to be a mechanism simply ‘encouraging’ Councils to boost delivery rather than ensuring meaningful solutions.   Where an Action Plan has yet to be produced, we may begin to see Inspectors using the absence of an Action Plan at appeal as further evidence in the planning balance for or against housing, if Councils are not engaging with the process or demonstrating a commitment to boost housing delivery.  If Councils are unable to demonstrate the implementation of their Action Plan, then this could also weigh in favour of a proposal. Moving Forward In 2020 the HDT thresholds will increase further.  Unless delivery significantly increases we could see a number of Councils across the NW failing the test and triggering the presumption in favour of sustainable development. Based on an initial analysis, there is limited evidence to suggest that Action Plans will provide the boost to delivery required to ensure the presumption in favour is not triggered. This is particularly worrying for Greater Manchester, as well as the Liverpool City Region, both home to a number of significantly underperforming authorities.    A number of the Greater Manchester authorities are constrained by Green Belt, and this has certainly compounded the issue.  The timely adoption of the Greater Manchester Spatial Framework [GMSF] is widely seen as the long-term solution to the sub-region’s persistent under-delivery.  Adoption of the GMSF remains a crucial way of unlocking sites and boosting delivery. However, the latest delay rules out a further draft of the GMSF being published before next year’s Mayoral and local elections taking place in May 2020. With a continuing absence of tangible, alternative solutions to addressing the under-delivery of housing, alongside a clear reluctance to release Green Belt, it is likely that related issues such as housing affordability will continue to intensify across the region.  The delivery of robust, practical Action Plans where required can, and should, act as a remedy to help prevent this. However, the lack of bite to the penalties imposed by the HDT, and the absence of any meaningful sanction for either non-conformity or lack of progress delivering the Action Plan, is a clear concern. Conclusions The HDT represents a key monitoring tool for the Government to incentivise local Councils to deliver the homes they need. However, it is clear that the Action Plan process may lack any real teeth, and it is disappointing that across the North West some Councils failed to produce an Action Plan within the deadline. Although we may see some implications for Councils at appeal, there appears to be no formal sanction for non-compliance.  This prompts the question - are Action Plans really providing the level of incentivisation that already underperforming authorities require in the North West? It is clear that the overall Action Plan process needs significantly strengthening, with publication of an Action Plan perhaps becoming a requirement rather than an ‘expectation’, with associated penalties for non-compliance. It may be too soon for this to happen before the next round of (delayed) HDT results, but a process of reinforcement should certainly be considered before the 2020 results are published in November next year. [1] https://www.planningresource.co.uk/article/1665194/housing-delivery-test-results-shelved-until-general-election[2] https://www.planningresource.co.uk/article/1663026/read-council-by-council-guide-measures-taken-boost-housing-delivery[3] Warrington and Blackburn had responded to Planning Magazine to state they are in the process of preparing an Action Plan, though Tameside and Rossendale had not responded as of 7th October 2019.[4] Paragraph: 048 Reference ID: 68-048-20190722[5] Paragraph: 051 Reference ID: 68-051-20190722[6] https://offlinehbpl.hbpl.co.uk/NewsAttachments/RLP/CauseCitedTable.pdf  

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