The National Planning Policy Framework (NPPF) requires local planning authorities to start the planning process for new housing with a clear understanding of the number of new homes that are needed. Authorities will then determine whether there are any environmental designations or physical or policy constraints, such as green belt, and engage with other authorities via the duty to cooperate. The White Paper issued in February recommended that these processes should be improved.
The 'Planning for the right homes in the right places' consultation seeks opinions on a new way of assessing housing needs and lays out the government's plans for reforming the planning system for residential schemes. The consultation closes on 9 November 2017.
This article sets out the headlines to assist developers, landowners and local authorities in deciding whether to respond to the consultation.
What is the standout message in the consultation?
The consultation sets out a proposed three stage process for calculating the objectively assessed housing need, which it argues should be simple, based on publicly available information and realistic:
- A baseline should first be set using the demographic baseline for each local authority area, taking the annual average household growth over a ten year period.
- An adjustment would then made to take account of market signals which is essentially a comparison between house prices and earnings used to measure affordability.
- Finally, a cap on the level of increase should be applied, so that in areas where a large need arises from the calculation, deliverability is taken into account. The cap is proposed at either: 40% above the figure in the current local plan adopted in the last five years or 40% above the higher of the projected household growth over the plan period using ONS projections or the annual housing requirement figure in the local plan, where the local plan was adopted more than five years ago.
Where a plan is based on higher figures, Inspectors should work on the assumption that the approach is sound unless there are compelling reasons to indicate otherwise. There should be limited grounds for adopting an alternative method which results in a lower figure.
There is a concern that the proposed process has been oversimplified and may allow for higher figures to be utilised where they are not justified.
How will the new method for calculating housing need be introduced?
The consultation paper sets out that the assessment can be relied upon for two years and the transitional arrangements for introducing the method:
- Where no plan is in place or was adopted over 5 years ago: the new method should be used unless the plan has been submitted for examination by 31 March 2018.
- Where the plan has been published but not submitted for examination: if the plan is to be submitted by 31 March, the existing figures can be used, otherwise the new method should be employed.
- Where the plan is at the examination stage: the existing approach should be utilised.
- Where the plan was adopted in the last 5 years: the new method should be used during the next review of the plan.
As draft figures for each authority were released with the consultation, there may be a rush to submit plans for examination before 31 March 2018, if existing figures are considered to be more favourable than those yielded by the new calculations.
Will the new method apply to neighbourhood areas?
The consultation proposes that guidance is amended to allow authorities to make a judgement on what the housing need figure should be for a particular neighbourhood area "based on the settlement strategy and housing allocations in their plan". If the local plan is out of date, a formula based approach is put forward, which will apportion the housing need figure based on calculations worked out using the new standard approach.
How will the duty to cooperate be engaged?
The paper proposes amending the NPPF to make clear that all authorities should prepare a statement of common ground, setting out how they will work together to meet housing requirements and deal with other cross boundary issues such as infrastructure demands. It is proposed that agreed housing market areas should be the basis for developing these statements, unless an alternative method can be identified and justified. Each authority involved will then sign up to the relevant parts of the statement, i.e. the parts that address strategic issues affecting that particular authority.
A deadline of 12 months from the NPPF being updated is proposed for implementation of statements, with outline statements being required to be in place within 6 months. If this is introduced, there will be a requirement for the statements to be kept up to date. A template is provided in the paper.
Are there are any other changes in the consultation worth being aware of?
In short, yes. They relate to:
- Planning fees: the consultation seeks views on what criteria should be imposed to allow an increase of planning fees by 20%, which was suggested for those authorities that commit to investing the additional income in improving the productivity of their planning departments;
- Prematurity: the intention is to set out in the NPPF the circumstances when a planning application can be refused on the grounds of prematurity. The current guidance is designed to prevent emerging plans from being undermined by proposals that are permitted before the plan is finalised;
- Viability assessments:
- For plan making, the consultation states that authorities should set out the detail of the affordable housing contributions they will require, what infrastructure is needed, and how it might be delivered at that stage;
- For decision taking, it is suggested that the NPPF be amended to make clear that where the policy requirement is viability tested, that issue should not be tested again during determination of applications. So, planning applications made in accordance with the plan should be assumed to be viable.
- In some cases, viability assessments will still be needed. For those cases, it is proposed that planning guidance is updated to help make viability assessments simpler, quicker and more transparent and the consultation asks for feedback on what factors should be taken into account e.g. defined terms, preferred approach to calculating costs and values, the format and accessibility of reports and detailed process and methodology. Given the recent uncertainty surrounding the approach to land values, this will be welcomed; however it will not be an easy task, given the inherent complexities in conducting assessments.
If you have any queries regarding the content of the consultation, please do not hesitate to contact Gary Soloman or Sarah Sutherland.