25 Aug 2020
Update 16 December 2020:
The launch of the proposed new standard method for local housing need on 6th August 2020 unleashed a media and political storm. An unfortunate cross-over with the problems of A-levels and GCSEs led to it being dubbed the ‘mutant algorithm’.
On 16th December, the Government sought to resolve matters, making a series of announcements across four publications:
A written Ministerial Statement
Response to the Consultation on Proposed Changes to the Current Planning System
Updates to the Planning Practice Guidance on Local Housing Need to set the new standard method approach
A spreadsheet with the indicative figures from the updated method
What are the headlines and what does it mean?
The Government’s White Paper “Planning for the Future” was released last week, which outlined the planning reform proposals for England, aimed at delivering a "significantly simpler, faster and more predictable system”.
Alongside this is a consultation on “Changes to the current Planning System” which aims to continue the simplification of local housing need calculations through revisions to the Standard Method. The new methodology is out for consultation until 1 October 2020.
Doffing the cap to change
The revisions to the standard method very much ‘doffs the cap’ to the current approach to increase housing supply but seeks to better achieve a ‘fair share’ approach by boosting housing numbers in areas with low projections and putting greater emphasis on the uplift for affordability. An approach which is welcomed.
The new standard method now proposes to yield 337,000 homes a year nationally which is higher than the current figure of 270,000 and a step change towards the Government’s 300,000 homes a year ambition. It follows a similar approach to the current method, but with some important changes:
The baseline was previously centred solely on household projections. It now uses the higher of the household projections or 5% of stock growth. This helps to “level up” authorities where projections are unduly low and implies a balanced approach where each authority does its bit;
The affordability uplift is now designed to “deliver greater overall emphasis on affordability than in the current standard method”. Instead of uplifting solely based on how unaffordable an area currently is, the method now also uplifts based on the change in the ratio over the last 10 years.
What are the implications for the South West?
The total South West housing requirement has increased from 27,379 houses to 36,804, an increase of 34% on the previous Standard Method target. This is just below the national average change of 35% and sits well below the rate of growth for London, which would see a 67% increase. Furthermore, some of the South West’s LPAs would see significant falls in their requirements under the proposed revised Standard Method. Bournemouth, Christchurch and Poole will see a significant fall (-32%) compared to the current methodology; as well as falls in West Devon (-13%), Gloucester (-12%), South Somerset (-11%), Torridge (-1%) and Cheltenham (-1%). Indeed, Bournemouth, Christchurch and Poole would see the second largest absolute reduction of any local authority in the country with a reduction of 852 dwellings per annum (dpa) from the current Standard Method.
Figure 1: Change in housing requirements from current standard method to new standard method
However there are significant increases with Cotswold seeing a 148% increase (722 dpa), South Hams at 117% (414 dpa), Teignbridge at 102% (774 dpa) and Cornwall with a smaller percentage increase at 44% but a larger absolute increase at 1235 dpa. Clearly, the proposed standard method would have major implications across the South West, with a number of authorities facing the prospect of significant changes in their minimum requirements. Under the current method, 53.2% of the national requirement is located in London, the South East and the South West. Under the proposed method this rises to 67.4% and there will therefore be significant pressure for the South West to delivery its share.
Table 1: South West LPA breakdown
The new standard method will have implications for those authorities where Local Plans are still in the relatively early stages of production, or where Plan Reviews are due in the coming 2 or 3 years. This is particularly the case for Mendip, Wiltshire, the West of England authorities and Greater Exeter. The transitional arrangements set out by the Government in its consultation document propose that from the publication date of the revised guidance, authorities which are already at the second stage of the strategic plan consultation process (Regulation 19) are given 6 months to submit their plan to the Planning Inspectorate for examination. Authorities close to publishing their second stage consultation (Regulation 19), are proposed to be given 3 months from the publication date of the revised guidance to publish their Regulation 19 plan and a further 6 months to submit their plan to the Planning Inspectorate.
Table 2 below shows the date at which adopted plans (including housing requirements) become more than 5 years old for each LPA in the region, and the status of any emerging Local Plans.
Table 2: Local Plan Status
In addition to those LPAs which are currently consulting on emerging Local Plans, the effects of the revised standard method could be felt at any future Local Plan reviews undertaken prior to the wider reforms in the White Paper coming into force.
Some authorities will no doubt press on with their plans at pace including Swindon who will be keen to get their plan to Examination given the 42% increase under the proposed new standard method. Whilst Cotswold with its 148% increase, the largest in the South West, has a recently adopted plan which is likely to allow them to bypass the interim standard method, with the next plan likely to be completed under the new planning reforms.
In the West of England, whilst North Somerset is expected to press ahead of the other four authorities, the joint evidence base on housing numbers currently in preparation will inevitably be impacted by the proposed changes and the new Spatial Development Strategy will need to grapple with these issues. There are large potential increases for South Gloucestershire (+80%) and BANES (+88%) which will be a step change for those authorities, especially the latter given the additional development constraints.
The confusion over the Greater Exeter Strategic Plan with East Devon recently withdrawing from the process and Mid Devon not withdrawing but proposing a new form of GESP instead casts major uncertainty about the timescale for their respective new plans and the progress of Exeter’s and Teignbridge’s reviews. The new changes will have a direct impact on three of those authorities with an increase under the proposed new standard method by 74% in East Devon; 74% in Mid Devon; and 102% in Teignbridge.
The revised standard method could prove useful for any developers pursuing 5 year housing land supply cases where the adopted requirement is more than 5 years old. The reduced requirement in South Somerset will result in the opposite effect for 5 year supply analysis and could indicate benefits to pursuing a 5 year supply case quickly in that LPA, before the revised method is enshrined in formal guidance.
As always, there is a wide variety of situations across the region but this also provides plenty of opportunities for further site promotion.
For implications of what the New Standard Method means for other regions, see below perspectives:
London | North West | Thames Valley | West Midlands | Yorkshire and The Humber
Conservative Tim Bowles, has now been sworn in as the first Metro Mayor for the West of England Combined Authority (encompassing Bristol, Bath & North East Somerset and South Gloucestershire) and is tasked with leading the delivery of a Devolution Deal worth £900m. Addressing the housing shortage was one of the Metro Mayor’s key priorities during the election campaign. With barely two weeks having passed since he took office, and with purdah prior to the General Election, it could be some time before we have clarity on how this is likely to be achieved. This blog considers some of the key challenges that lie ahead in planning for more homes across the region.
It is generally agreed that we need more houses across the region to address a worsening supply and affordability crisis. The emerging Joint Spatial Plan (JSP), which also includes North Somerset, goes some way to tackle the issue by providing the framework to deliver up to 105,000 new homes over the next 20 years. The consultation report on the JSP shows that the development industry considers this level of growth to be insufficient – particularly to address the desperate shortfall of affordable housing. Against this backdrop, it is encouraging that the Metro Mayor has pledged to develop a strategy to deliver more new homes. The biggest question of course is ‘where will these new homes will be built?’
The Metro Mayor has stated that he will work to ease the pressure for greenfield development and development within Green Belt and take a ‘brownfield first’ approach. However, for a region where Green Belt accounts for nearly 50% of the land and tightly constrains existing urban areas, it will not be possible to say ‘no’ to Green Belt release if the supply of new housing is to be significantly increased - particularly when capacity on brownfield sites is limited; viability more challenging; and the lead-in times for delivery longer.
To tackle the housing crisis the Metro Mayor should be ambitious in adopting a pro-growth and permissive approach which supports the delivery of open market and affordable housing in a range of suitable locations and across a portfolio of sites including brownfield and greenfield. This will involve difficult decisions because any robust plan for housing growth must include a full and proper assessment of the Green Belt. If not, there is a real risk that housing needs across the region will not be met.
After May 2018, the Metro Mayor will have powers of strategic planning, including the ability to adopt a statutory spatial development strategy for the Combined Authority Area, which could act as the framework for managing planning across the region. To provide certainty for the development industry, there is need for clarity about how a spatial development strategy will sit with the emerging JSP. A principal issue will be to ensure that there is no delay in the delivery of strategic housing sites that are currently being planned for through the JSP.
One of the key challenges in managing sustainable housing growth across the region will be the delivery of significant infrastructure improvements to address years of under-investment. The Metro Mayor recognises that an efficient and integrated transport system will help to unlock further growth across the region and has promised to work with a range of stakeholders to improve infrastructure through projects such as the revival of suburban rail links, enhanced park and ride provision, better cycle routes and bus improvement measures.
The Joint Transport Plan outlines a raft of ambitious transport improvements including new rapid bus and light rail links, improvements to the road networks and the extension of the MetroWest project. The cost of delivering these projects runs in to billions of pounds - far beyond what is available through the Devolution Deal. But what we do now have is an immediate source of funding and a Metro Mayor with strategic transport planning powers to invest in some of the transport priorities that have been identified.
What the Metro Mayor needs to deliver is a clear, long-term strategy for a better functioning and integrated transport system which not only improves residents’ access to jobs and opportunities but also demonstrates how development sites for new homes can be opened up. Strategic planning for transport alongside housing growth will lead to more sustainable patterns of development and ease congestion.
The Metro Mayor will be one of four decision makers - chairing a Cabinet made up of the leaders of the three Councils (two Conservative and one Labour) including Bristol’s elected Mayor. This is positive because it will ensure that the benefits from the Devolution Deal will be shared across the region. But political diversity will mean that the Metro Mayor can only address strategic growth by cutting through party politics. Another political consideration will be how best to work with North Somerset, which last year voted against the creation of a Metro Mayor and is not directly included in the new administration. North Somerset forms a part of the functional Wider Bristol Housing Market Area (not least because 22% of its residents in work commute in to Bristol) and will have a key role to play in solving the regions’ housing crisis including Bristol’s unmet need. Taking an inclusive approach to engagement and involvement in decisions that impact upon and help North Somerset will, therefore, be crucial.
Despite these issues, what remains beyond doubt is that the Devolution Deal provides a great opportunity for the West of England to maintain its strengths and unlock the full potential for well planned sustainable housing growth.
Image credit: Paul Raftery