Planning for Housing Determining Housing Provision

1. Planning for Housing Determining Housing Provision Andrew Pritchard Director of Strategy 7 April 2011

2. Introduction • Emerging Government Policy • Determining Housing Provision: PPS3 • Some lessons from the Regional Plan • Current status of Regional Plan • Housing delivery in the EM • Some concluding thoughts

3. Emerging Government Policy • Localism Bill • National Planning Policy Framework • New Home Bonus • Affordable Housing • Budget 2011

5. Localism Bill • Planning aspects of the Localism Bill have been influenced by ‘Open Source Planning’ (Conservative Party Green Paper, 2009) – but the Bill is much less radical • OSP argued that the planning system was ‘broken’ – too divisive and not delivering enough development • OSP proposed a planning system based on neighbourhood plans, led by local communities.

6. Localism Bill (or OSP-lite) • RSSs replaced by a ‘duty to co-operate’ • Neighbourhood Plans – but in conformity with LDF and of limited scope (Blaby and Newstead awarded ‘vanguard’ status) • Neighbourhood Development Orders and ‘Community Right to Build’ • Few changes to Local Development Frameworks - but an expectation that they will be ‘different’ in future (‘new style local plans’)

7. Localism Bill in Committee (so far) • Government has conceded that the duty to co-operate needs to be strengthened - possibly based on RTPI amendment • Minimum size of Neighbourhood Forums to be increased from 3 (to 20?) • Further Government amendments likely • House of Lords may have some views too…

8. National Planning Policy Framework • To replace existing PPGs/PPSs/Circulars • Simple, concise, consolidated framework - unlikely to be a Spatial Plan for England • Will be based on a ‘presumption in favour of sustainable development’ • Draft NPPF due out in the summer – to be adopted in April 2012 • Relationship with NPSs and National Infrastructure Plan unclear

9. New Home Bonus • Designed to be a simple, predictable incentive for Councils to promote house building • Councils will be rewarded for net additions to the housing stock (including empty homes) for 6 years – with extra for affordable housing • Cost progressively top sliced from formula grant from 2012/13 onwards • (Some additional cash for empty homes)

10. New Homes Bonus: Impact • NHB worth £17 million in 2011-12 to the EM – £105 million by 2016/17 • Most authorities in the EM should benefit compared with the status quo (southern regions benefit at the expense of northern ones) – but some will lose out • 20% to go to counties in 2 tier areas, but NHB is effectively a transfer of resources to LPAs • Will NHB increase housing delivery?

11. Affordable Housing Reforms • DCLG funding cut from £8.4 billion to £4.4 billion over the next 4 years (half of which is committed) • ‘Affordable Rent’ will form the principle element of new supply – 80% of market rent • DCLG estimate that 150,000 new units will be delivered in England over the CSR period • Housing benefit cap and other changes to save £2 billion annually • Housing Revenue Account to be abolished • Re-introduction of ‘closed’ housing waiting lists

12. Affordable Housing: Impacts • Affordable Rent likely to be more viable in more buoyant areas – in particular London and the SE • EM would appear to be a loser (only 332 new homes per year based in CIH analysis) • As a result, LPAs may need to revise their affordable housing requirements and viability assumptions • Housing benefit changes could have a big impacts in London – and knock-on effects on surrounding areas

13. Budget Background 1 “We are taking on the enemies of enterprise. The town hall officials who take forever with those planning decisions that can make or break a business”

14. Budget Background 2 “I hear countless stories of perfectly reasonable developments being thwarted by bizarre planning rules. We want the standard answer to be ‘yes’ not ‘no’ ”

15. Budget Background 3 “The planning system should act as a driver for growth. But if I am being completely frank with you, it’s the drag anchor to growth.”

16. Budget Background 4 “People have a bizarrely crude view of green space and think anything with a blade of grass on it is worth preserving…There are lots of boring fields”

17. Budget Statement “…we are going to tackle what every government has identified as a chronic obstacle to economic growth in Britain, and no government has done anything about: the planning system”

18. Budget 2011 • Planning decisions should prioritise jobs and growth (Greg Clarke Statement) • Reduce burdens on developers (S106 agreements should be reviewed – Grant Shapps) • Presumption in favour of sustainable development to be published in May 2011 – the default answer to development should be ‘yes’ • Businesses will be able to bring forward neighbourhood plans and NDOs

19. Budget 2011 • ‘Land Auctions’ to be piloted with public sector land • National brownfield target for new housing to be removed – but Greenbelt policy remains (despite OEDC concerns) • Developers will be able to convert from business to residential without permission • LPAs expected to process all applications within 12 months – DCLG will give a ‘12 Month Guarantee’ for applications it deals with • 21 new Enterprise Zones

20. Back to the 1980s? • Presumption in favour of (sustainable) development (Circular 22/80) • Enterprise Zones Mk 1 • ‘Lifting the Burden’ (1985) • Royal Weddings!

21. Yes, but… • We still have a ‘plan led’ planning system – Section 38 (6) still applies • SEA/SA/HRA plus EIA (perhaps in modified form) also still apply • The localism genie is out of the bottle…

22. Determining Housing Provision: PPS3 Approach • Evidence of need – SHMAs and other relevant market information • Latest household projections (2008 based) • Economic forecasts (!) • Land availability (SHLAs) • Affordability • Sustainability Appraisal • Impact on infrastructure

23. What’s the formula? • There is no magic formula for balancing these factors - it is a matter of ‘fact and degree’ • However, experience indicates that authorities will have to have good reasons not to meet the level of provision indicated in the HH Projections

24. Some lessons learned (1) • Household growth comprises natural growth plus migration – migration is the potentially more malleable element, particularly across an HMA • Economic forecasting is not very helpful: strongly influenced by population growth assumptions and external factors • Job/Homes comparisons often spurious, but can be useful as a relative measure to assess options • Utility providers (and regulators) difficult to pin down – but are seldom show stoppers

25. Some lessons learned (2) • Flood risk must be properly understood – need to engage EA early • Understanding transport impacts is key - strategic modelling required (e.g. Ptolemy) • SPA/SAC cumulative impacts can be tricky – early engagement with NE required • Try to distinguish between ‘technical’ assumptions and ‘policy’ considerations

26. EM Regional Plan 2009 • Still part of the Statutory Development Plan • Proposed revocation is a material consideration (subject to a Court of Appeal hearing in May) – but not a strong one without additional evidence • ‘Stretching’ targets over a longer time frame (due to market conditions and infrastructure issues) may be a defendable alternative to the RSS – but has not been tested yet • DCLG Select Committee report on RSS Revocation is an interesting read!

27. Housing Delivery in the EM

28. Conclusions • De-regulation is replacing localism as the dominant driver of planning reform • However, we are still in a plan-led system, and sound evidence will be required to make this work • Without a plan in place, the presumption in favour of (sustainable) development will apply