Written evidence submitted by Peel L&P [FPS 094]
Thank you for the opportunity to respond to the Housing, Communities and Local Government (HCLG) Select Committee Inquiry: The future of the planning system in England.
Peel L&P (hereafter referred to as ‘Peel’) part of The Peel Group of Companies is one of the foremost real estate investment and development companies in the UK. We have major interests and properties across the UK with a particular focus on the North of England. We work with public and private partners to deliver transformational investment in all major development sectors.
We are a landowner, promoter, master-developer, joint venture partner, homebuilder and asset manager – working in all types of markets, from successful affluent areas to some of the most deprived communities in the country, on sites large and small, greenfield and brownfield. We are currently working with 38 different Local Planning Authorities (LPAs) across the country at all stages of development from initial ideas and concepts through to construction and long-term management.
Our response comprises the content of this letter which answers the Select Committee’s questions in turn. This letter should be read alongside the submission from Peel to “Changes to the Current Planning System Consultation” and to “Planning for the Future White Paper Consultation”.
Following the on-going economic uncertainty caused by leaving the EU and the shock of Covid-19, the nation requires certainty and stability to allow for economic recovery and investment. The Planning White Paper (PWP) proposes significant reforms which create the risk of current and emerging plans and projects being delayed. It is of critical importance that clear interim procedures are put in place alongside a positive requirement on LPAs to keep proceeding with Local Plans and development decisions. Despite the Government asking Councils not to pause, unfortunately some have, and action needs to be taken to avoid further delay. This delay could be worsened as it is highly possible that any hiatus caused by major reform will increase planning by appeal whilst changes are implemented.
Q1) Is the current planning system working as it should do? What changes might need to be made? Are the Government’s proposals the right approach?
The planning system is not currently working efficiently. There are several reasons for this. One of the biggest inhibitors of positive plan-making is political intervention often motivated by short-term highly localised resistance to development which is given precedence over national policy and the future needs of economies and communities. This occurs in various ways including delayed and negative plan-making and decision-taking and of the seeking minimal growth objectives in order to avoid development taking place, no matter the extent of need.
Clearly planning is a democratic activity, but the way in which highly localised interests have undue influence on the delivery of wider political priorities is not representative of democracy. We recommend that the balance between local decision-making and the meeting of development needs, needs to be restored.
Many of the problems associated with the planning system are also due to a lack of resources in local authorities, a well-known issue, and if Government is to see a more effective system, significant additional resources and skills will be required.
The Government’s proposals within the PWP are positively intended and the implementation of many of the proposals can make a major difference by speeding up and improving the effectiveness of the planning system.
The most effective and efficient way to meet needs is to ensure an adequate land supply by adopting pro-active, ambitious and viable Local Plans that improve land supply and enable developers to secure deliverable planning consents. We therefore support the proposals for a statutory timescale for the production and adoption of Local Plans.
Peel supports the idea of automatic outline permission in Growth areas. It is understood that the concept is to give greater certainty when land is allocated such that planning permission should, provided technical and design requirements are met, be given automatically. Further detail on how this would work is required. We also welcome the emphasis in favour of sustainable development and building beautiful, boosting the economy and providing much needed new homes.
In addition to what is contained within the PWP, arguably of equal or greater importance is what the PWP does not address. We consider there to be several important issues that the PWP has not resolved and which need to be tackled in moving forward with planning reform. These issues include:
Our detailed response in relation to housing need and requirement can be found in response to question 4 below.
The PWP offered an opportunity for the development industry to be viewed holistically and in the wider context within which it operates – as it must to avoid unintended consequences. However, by not considering the above the transformational change anticipated will not be achieved.
As noted above, our most significant concern is further delay. Major change to the system could, in the short to medium term, slow down progress on Local Plans and decision making. Despite the Government asking Councils not to pause, unfortunately some have, and action needs to be taken to avoid further delay. This could bring further uncertainty where plans and projects are currently proceeding and poses a risk to economic recovery and the ability of the industry to move forward with investment plans. To reduce the impact of change, whilst the reforms are brought in, clear interim measures and directives are needed to continue under the current system.
Q2) In seeking to build 300,000 homes a year, is the greatest obstacle the planning system or the subsequent build-out of properties with permission?
As discussed in response to question 1 above, the planning system is restricting delivery, but the problems relate less to the mechanics of the system itself and more about the operation of the system via policy, politics and resources. The system has become increasingly impacted by local political issues in recent years and has suffered a lack of resources which has undermined plan-making. This has resulted in the system not making insufficient land available for development.
The issue is certainly not the build-out of schemes with planning permission. There is a misconception outside of the development industry that planning consent equates to a deliverable development and if this does not occur it is due to ‘land banking’. Planning permission is only part of the development equation and there are many issues which affect delivery. This is evident when considering that the vast majority of brownfield land around the country is unconstrained by the current policy context and is therefore available for development now. However, the rate of delivery remains below that required, even when the market is buoyant. This indicates that the majority of the supply is constrained, for example by viability or other obstacles which cannot be readily resolved. The intricacy of development is even more pronounced on large strategic sites which can be complex and take years to deliver.
Viability and the strength of the market are critical factors to ensuring developments are delivered. As Sir Oliver Letwin’s Independent Review of Build Out Rates in 2018 correctly identified build out of large residential developments is often slow due to low market absorption rates. The most helpful measure which could be taken to increase housing delivery is to increase the supply of land.
Q3) No comments
Q4) What approach should be used to determine the housing need and requirement of a local authority?
We support the principle of Government set housing requirements via a standardised approach and support the reference within policy to the 300,000 dwelling per annum national target. Removing the housing requirement debate from the Local Plan process would likely have the benefit of speeding up Local Plan Examinations. However, more clarity is required around how the method of setting housing targets would work in practice and who would undertake the assessments of constraints and on what basis. We propose that housing targets should be ambitious, “policy on” in terms of economic growth aspirations and aligned with infrastructure investment. Generally, there is need for policy to initiate, promote and support the levelling up agenda for the North, to create new growth and investment in the North through improved infrastructure and placemaking.
The proposed method itself should be subject to consultation with both industry and communities. Peel’s response to the proposed method for calculating housing land supply were provided in our response to the “Changes to the Current Planning System” consultation. Translating that “policy off” need figure into a “policy on” requirement requires the consideration of factors such as economic growth ambitions, infrastructure investment, constraints, the existing stock, opportunities for regeneration and the need to create economic activity and regenerate deprived areas.
Ultimately the quantity of development needed in different parts of the country is shaped by different factors. For example, in parts of the North, much housing stock is small and not of the quality needed to support modern societal needs and a competitive local economy. Also, housebuilding might be one of few opportunities for investment and job creation in an area. It might be that investment has been made (or is committed) for new transport infrastructure that will increase demand for new homes. At present these issues are not really factored into planning for housing.
Peel considers a form of national spatial strategy would be helpful, which defines the major growth and regeneration area, key infrastructure priorities, areas of constraint and conservation and so on. This would help inform local plan making. This would provide a basis for the Government to determine how and where housing and potentially other development needs will be met. This would also help provide a clear definition of what “levelling up” actually means in terms of development requirements.
Without such a plan, the particular question of meeting housing needs in constrained areas, for example Green Belt Authorities and other LPAs which are heavily constrained, will be harder to resolve. This may also mean that strategic employment sites, which attract national and international activity, are not delivered. Resulting in significant shortages in strategic sites which could hinder economic recovery.
Q5) No comment
Q6) No Comment
Q7) What changes, if any, are needed to the green belt?
The purpose and role of Green Belt policies are widely misunderstood. Consequently some Green Belts are preventing the sustainable growth and recovery of towns and cities, constraining economic growth, fuelling the national housing crisis, undermining sustainable patterns of development (for example with new housing “leapfrogging” the Green Belt) and prioritising the protection of low value land that could be used for social and environmental gain. The way that Green Belt policies are treated as immovable boundaries that outweigh housing need when weighed in the planning balance is at odds with the original intentions of Green Belt and indeed of most of the Government’s other planning policies. Many Green Belt boundaries have not been reviewed for decades and further review is long overdue in most areas.
Many studies by academics, planning experts, think-tanks and charities such as Shelter and Joseph Rowntree foundation have provided successive Governments with ample evidence of these issues. By not reviewing Green Belt boundaries, the system is also fuelling other problems, such as an increase in in-commuting to cities, which in turn results in traffic congestion, increased pollution, reduced air quality, increased commuting times, and lower quality of life. It is also no coincidence that many of the areas without up to date Local Plan coverage are also those areas where housing needs can only be met through Green Belt release.
We note that the PWP does not include any proposals to review Green Belt policy. This is disappointing and an omission from the White Paper. It is understood that the Government was advised to consider the Green Belt issue but decided against. Unless and until it is addressed, it is difficult to see how the housing needs of major cities and towns will be met and therefore how the White Paper can be a success.
There is a need for an informed and evidence-based review of the impact of Green Belt policy on the sustainable development needs of the country. This should review how the policy is being used in practice and how Green Belts are (or are not) being reviewed. The policy itself may not need changing fundamentally but should be undertaken with the aim of making Green Belt policy more relevant to 21st century challenges and to facilitate boundary reviews more proactively. This would assist the Government in boosting significantly the supply of housing to meet needs and ensuring health, economic and environmental objectives are achieved.
As part of any such review, there should also be a requirement for Local Plans to ensure that any land that no longer fulfils or makes a significant contribution to the defined Green Belt purposes, and which it is no longer necessary to keep permanently open, should not be retained in the Green Belt.
Q8) What progress has been made since the Committee’s 2018 report on capturing land value and how might the proposals improve outcomes? What further steps might also be needed?
Significant changes were made to national policy following the Committee’s report in 2018. These changes identified that viability should be considered at plan-making stage and should be open book in the public domain. It is too soon to tell the full extent of the proposals as they are yet to bed in. However, in our experience they are being implemented generally successfully and ensuring a good balance between capturing planning obligations and ensuring supply and delivery. Following these changes there is no available evidence yet as to their effect and it seems premature to consider further significant reform.
The proposals of the PWP are radical do not appear to have been informed by market realities and as drafted, they pose a major risk to supply in the short to medium term. Generally, we consider that the PWP proposals require further thought and significant industry engagement to identify a workable system. The recommendations of the CIL expert panel may provide a more achievable roadmap for moving forward.