England planning news, May 2019

Following on from the National Audit Office’s report ‘Planning for new homes’ which concluded that ‘it is clear that the [planning] system is not working well’ the House of Commons Public Accounts Committee has launched a ‘Planning and the broken housing market inquiry’.

Oral evidence was given by the Ministry of Housing, Commuities and Local Government (MHCLG) on 29 April and covered numerous planning matters. It began with MHCLG permanent secretary Melanie Dawes ‘unusually’ being allowed to put MHCLG’s case, disagreeing with the position that the planning system is not working well, albeit that there is a huge amount of work to be done and a lot of improvement needed.

Housing targets or projections

Melanie Dawes acknowledged that 300,000 homes by 2020 is an ambitious projection (rather than target). Ms Dawes said that market commentators saw 250,000 as within reach and discussed potential areas of growth that would create a ‘new market’, such as private rented sector, housing associations and local authorities:

“[…] we are trying to understand which levers we need to pull the hardest, and how they interact”.

Housing infrastructure

The Committee also questioned whether there are sufficient resources for associated infrastructure requirements, given that s106 agreements raise (nationally on average) around half of the monies needed for infrastructure for new houses. MHCLG agreed that some money would need to come from central Government, which would be looked at as part of the spending review (if it takes place).

Accelerated planning and LPA performance

MHCLG confirmed that the ‘Accelerated Planning Green Paper’ would be published this year but no date had been set; they had been working on it before it was announced with the Planning Advisory Service (PAS) and the Planning Inspectorate (PINS). Officials explained that a key part of its evidence base is understanding the skills shortage with results of a recent local planning authority (LPA) survey now being aggregated by PAS.  When asked whether a bespoke response would be provided for LPAs given that a fine-grained individual level survey had been undertaken, MHCLG said it anticipated different issues in different parts of country; the response might be national, as per the planning application fee increase, or regional e.g. the support given to the Cambridge, Oxford and Milton Keynes authorities.

With regard to LPA efficiency in decision making, Simon Gallagher of MHCLG noted that in some cases extra time to discuss matters locally is worth investing in, where in others decisions should be made more quickly; there is not currently a performance measure that captures user experience.

MHCLG acknowledged that there are still concerns with LPA performance despite the 20 per cent fee increase injecting £75 million per year into the system.

Housing Delivery Test

The Committee asked how likely it was that the Housing Delivery Test would be changed given that many LPAs were expected to require some form of action and were told that there are no plans to change it but given that it was new, and might not have the anticipated effect, it would be changed if necessary.

The Committee questioned sanctions being made against LPAs for low housing delivery, when they do not control delivery:

“We could think of one or two things like shorter starting conditions, charging council tax when those starting conditions have expired, enforcing consortia, phasing in large developments—there are a number of things that you could do to enforce the house builders to actually start building out permissions. Have you thought of any of these things?”

Melanie Dawes considered that local authorities “set the climate for house building in their area, and I think they are a very important part of what goes on” and

“It’s a question of sticks and carrots, I agree, and some of the ideas you have just mentioned are the sorts of things that are sometimes suggested. They are very good suggestions for developing this yet further; they are the sorts of things we would want to keep under review”.

Appeal decision timescales and potential fees

MHCLG said that the Planning Inspectorate’s Action Plan, recommended by Bridget Rosewell’s review was expected in the next few days, having originally been expected by the end of April.

The Rosewell Review recommended appeal decisions be made in 24-26 weeks by the end of the year, but MHCLG referred to seeking an ‘average’ 18 week decision making period by the end of the year (an 18 week decision making period for all decisions was also referred to, but only once).

In the context of there perhaps not being a spending review, MHCLG said it was working through the question of whether resources would define PINS’ statutory targets, or whether resources would be found to meet targets.

With regard to charging a fee for appeals, MHCLG indicated that PINS would need to be in a position to deliver, and it might not be there yet.  However:

“The primary powers exist to charge fees for appeals, but there would need to be a consultation to discuss both the quantums but also some of these issues, such as in what circumstances might fees be refunded and whether it applies to everyone in every type of appeal. Those are all questions that Ministers would need to consider”.

Department for Education (DfE) has prepared two pieces of non-statutory guidance for local planning authorities that are seeking education-related developer contributions.

The guidance was issued jointly with the Ministry of Housing, Communities and Local Government (MHCLG) and is now referred to in Planning Practice Guidance section on planning obligations (albeit that the DfE guidance was published in April and the PPG was officially last updated in March).

‘Securing developer contributions for education’ provides a detailed overview of what the Government considers might be reasonably expected from developers providing new homes. It  provides several options and alternatives, with reference made to the Government’s decision to lift the S106 pooling restrictions. It also includes an annex on direct delivery from developers and related State Aid issues.

Key elements of the guidance are:

• developer contributions towards new school places should provide both funding for construction and land where applicable, subject to viability assessment
• planning obligations should allow enough time for developer contributions to be spent (with the view given that often this is 10 years, or no time limit is specified)
• pupil yield factors should be based on up-to-date evidence - DfE is working on a detailed methodology for calculating pupil yields from housing development, to be published in due course
• developer contributions should help to fund nurseries at new primary schools (now a requirement) and appropriate special educational needs provision
• within large development sites where schools are proposed, safeguarding additional land for future school expansion
• it is possible to consider delivering the school in phases using modular construction methods, linking capacity more closely to emerging need, though the initial phase must still provide a viably sized school
• when developer delivery is proposed, consider a clause within a planning obligation requiring design disputes to be referred to an independent expert or design panel, so the local authority is not the ultimate decision-maker on the design specification

It is not intended to replace local approaches to developer contributions or non planning related education matters.

The guidance ‘Education provision in garden communities’ has been prepared for local planning authorities involved in the garden communities programme and Homes England. It sets out guidance on the early delivery of schools within planned new garden communities, calculating education need and other funding-related matters.

On 24 April, a debate was held in the House of Lords on the residential construction sector, modern methods of construction (MMC), and the recent steps the Government has taken to boost the supply of housing.

Opening the debate, Lord Bourne (the Parliamentary Under-Secretary for Housing, Communities and Local Government) emphasised the importance of diversifying the market through supporting small and medium-sized builders, and exploring the potential for building extra capacity and improving quality of new homes through MMC.

A number of wider issues were raised that are considered to be affecting both demand and supply within the sector.

Baroness Thornhill commented:

‘Although there is huge potential, the reality is that investors are slow to lend as the technology is untried and, frankly, the public perception of such homes is far from positive. People moving into one of these homes may find insurers reluctant to insure, or their insurance may be expensive; they may also struggle to get a mortgage on such a property.'

Thornhill’s remarks reflect the recent evidence submitted by the Association of British Insurers to the Housing, Communities and Local Government Select Committee’s inquiry on MMC, which suggest that the time and costs associated with repair work tend to be higher with MMC, than with traditional construction equivalents.

Other issues were raised regarding the high start-up costs for manufacturers, alongside the inconsistent levels of demand that were undermining the prospect of building economies of scale. Whilst it was suggested that industry-wide standards were needed, opinions were split as to whether this was best encouraged through a relaxation or tightening of planning policy.

There was general agreement across the House, that MMC had the potential to ramp up the sustainability of new development, as well as the potential for building in measures such as the Lifetime Homes Standard to better support the needs of an ageing population.

Two House of Lords Select Committees made planning related recommendations this month, which we cover below.

The House of Lord Select Committee on Intergenerational Fairness and Provision’s Report ‘Tackling Intergenerational unfairness’ considers ‘the housing challenge’ amongst non-planning related matters.

Its recommendations include:

With reference to the last point, this month’s Lichfield Planning News for London discusses the Greater London Authority’s conclusion that a ‘luxury’ care home falls within use class C3.

And in other related news Lord Bourne confirmed that the Government will publish ‘in due course’ further planning guidance, to assist councils to put in place policies to address the housing needs of older people, in accordance with national policy. He said that the Government has undertaken extensive engagement in relation to the guidance.

And when asked whether the Government had consulted providers of specialist housing for older people when formulating the Housing Delivery Test, Lord Bourne responded: ‘we conducted 3 key stakeholder roundtables, and carried out 40 individual meetings with interested parties on specific topics or wording […] Stakeholders were generally supportive of the Test’s approach to older peoples housing as it rewards authorities for delivering older peoples housing by allowing them to count communal accommodation.’

The House of Lords Select Committee on the Rural Economy’s first publication ‘Time for a strategy for the rural economy’ includes several planning and housing-related recommendations.

In response to evidence given by the National Trust, the report recommends that Government reviews whether the Housing Delivery Test “acts as a disincentive to brownfield development”. The report also criticises the lack of data on new dwellings in settlements of fewer than 3,000 people, which made tracking progress difficult.

The report seeks (amongst other things):