Written evidence submitted by the Local Government Association [NPP 37]
1. About the Local Government Association
1.1 The Local Government Association (LGA) is the national voice of local government. We work with councils to support, promote and improve local government.
1.2 We are a politically-led, cross party organisation that works on behalf of councils to ensure local government has a strong, credible voice with national government. We aim to influence and set the political agenda on the issues that matter to councils so they are able to deliver local solutions to national problems. The LGA covers every part of England and Wales, supporting local government as the most efficient and accountable part of the public sector.
2. Summary
2.1 We supported the introduction of the National Planning Policy Framework (NPPF) in 2012 and the move from centralised guidance to clear, up-to-date and well-evidenced local plans.
2.2 Councils put in significant effort, time and money to establish local plans (83 per cent now have a published plan) based on local need. We are concerned that reforms to national planning policy may undermine this process.
2.3 Planning is not a barrier to development and councils continue to approve development with almost nine in every ten planning applications being granted permission.
2.4 Local authorities need the flexibility to shape the number, type and quality of Starter Homes within and across developments alongside other types of affordable housing. It is vital that new housing products are delivered in response to the needs of residents and economies in local housing markets as assessed locally by councils as part of developing their local plans.
2.5 Local planning authorities must continue to be able to shape and approve developments, against a local context, so that they are backed by local communities, and serve to improve places and economies. An effective democratically-led planning system is critical to good place-making, which drives growth and prosperity.
2.6 Rather than introducing further planning reforms, the Government should introduce a framework, as we called for in a letter to the Committee in 2014, to evaluate the operation and impact of the NPPF and local plans in terms of outcomes over a longer term. In the absence of such a framework, there is a danger that there continues to be an overreliance on what can more easily be measured in the short-term or a reliance on anecdotal evidence.
3. Affordable housing (and Starter Homes)
3.1 We are concerned about the Governnment’s proposal to broaden the definition of affordable housing in national planning policy to include a wider range of low cost home ownership options, including Starter Homes. These homes are unlikely to be accessible for large numbers of households whose needs are not met by the market.
3.2 Local discretion will be crucial in ensuring that councils, in their role as local planning authorities, can determine the number, location, type and quality of Starter Homes delivery based on the assessed needs of local residents.
3.3 The key issues for councils are:
3.3.1 Starter Homes, as currently proposed, will not be ‘affordable’ for many people. Research commissioned by the LGA, carried out by Savills, shows that on a national scale Starter Homes would be out of reach for all people in need of affordable housing in 220 council areas (67 per cent). This is based on defining people in need of affordable housing as those that have to spend 30 per cent of their household income to rent or buy a home.
3.3.2 Councils will be forced to prioritise the delivery of Starter Homes through national policy changes and through proposals set out in the Housing and Planning Bill. This will restrict the ability of local authorities to deliver homes based on need in their local areas.
3.3.3 The Government’s impact analysis suggests that for every 100 starter homes built through section 106 agreements, between 56 and 71 affordable or social rented homes (and a small proportion of low cost home ownership) homes will not be built.
3.3.4 The Housing and Planning Bill currently proposes that Starter Homes can be re-sold or let at open market value five years after the initial sale. For Starter Homes to remain affordable the discount should apply in perpetuity, as is often the case in many council-run Low Cost Homes Ownership schemes, or extended to a longer period (for example, 20 years).
3.3.5 Proposals to strengthen the presumption in favour and prioritise Starter Homes include: extending the exception sites criteria for Starter Homes to include unviable or underused retail, leisure and non-residential institutional brownfield land; requiring Starter Homes to form a significant element of housing on mixed use developments; requiring a proportion of starter homes to be delivered on all suitable reasonably-sized housing developments. National policy change to allow redevelopment on brownfield land in the green belt for Starter Homes will also exacerbate the issues highlighted above and undermine local plans.
3.3.6 The delivery of 200,000 Starter Homes will put additional pressure on local infrastructure. Exempting Starter Homes from Community Infrastructure Levy, a fund that can be used for roads, flood defences and schools, and other tariff-based contributions to general infrastructure pots will reduce the amount of funding for infrastructure in some areas. Furthermore, delivery through the planning system will create significant new burdens on council planning teams, and so should be fully funded.
3.4 If Starter Homes were provided as part of a mix of other types of affordable housing product based on locally assessed need and the perpetuity issued was addressed some of these concerns could be alleviated. We have called on Government to amend the Housing and Planning Bill to ensure discounts Starter Homes remain in perpetuity, and to enable local planning authorities to deliver the number, type and quality of starter homes based on their local assessments of need and viability on a site by site basis,
4. Local decision making
Increasing residential density around commuter hubs
4.1 Paragraph 47 of the NPPF already states that local planning authorities should ‘set out their own approach to housing density to reflect local circumstances’, and therefore the proposed changes are unnecessary top-down prescription.
4.2 Local planning authorities should be able to continue to decide the right levels of density for new development across their local area based on local context, as well as determining locally which are the main commuter hubs. Government should not introduce a minimum level of residential densities in national policy for areas around commuter hubs.
Supporting new settlements
4.3 Paragraph 52 of the NPPF already states that local planning authorities should consider whether larger scale development, such as new settlements or extensions to existing villages and towns would provide the best way of achieving sustainable development.
4.4 Councils across the country are already working collaboratively with developers to plan for and deliver new settlements and/or urban extensions, where deemed appropriate locally. There is no need to strengthen existing national policy to ensure this.
Supporting housing development on brownfield land and small sites
4.5 Ensuring the effective use of land is a key objective for councils and they share the Government’s ambition of bringing forward brownfield land as a priority wherever possible.
4.6 83 per cent of councils already have a published local plan and therefore identify land, including brownfield land, that is suitable for housing and work with developers to bring development forward.
4.7 Alongside this, the proposed measures in the Housing and Planning Bill will require councils to develop and maintain a register of brownfield land suitable for housing and grant permission in principle to that land.
4.8 The NPPF already includes a ‘presumption in favour of sustainable development’ as a key principle that should run through both plan-making and decision taking on individual planning applications. That is, unless the impacts would significantly outweigh the benefits or policies indicate that development should be restricted.
4.9 The proposal in the consultation to strengthen national policy to, in effect, give a ‘presumption in favour’ of brownfield land for housing, unless there are overriding conflicts with a Local Plan or the NPPF, is unnecessary.
4.10 We would like to see the introduction of a sequential test for brownfield land. This would assist councils in ensuring development of brownfield was prioritised by developers and would be consistent with the approach set out in the NPPF for flooding and town centre development.
4.11 There is also a proposal to apply the approach described above for brownfield land to other small sites (defined as sites with fewer than 10 units). Councils recognise the importance that small sites can play in helping to meet local need for housing, as well as the economic benefits to small and medium businesses, including the provision of jobs and support to local supply chains.
4.12 However, as outlined above the NPPF already includes a ‘presumption in favour’ of sustainable development, which would equally be relevant to small sites. Strengthening national policy for the development of small sites for housing is again unnecessary.
5. Housing delivery test
5.1 The Governemnt consultation provides more detail on the proposal announced in the 2015 Autumn Statement to introduce a housing delivery test. The Government is looking to amend national policy to ensure action is taken where there is a significant shortfall between the homes provided for in local plans and the houses being built.
5.2 One approach suggested could be to force councils to identify additional sites for housing in the local area where significant under-delivery is identified over a defined period of time.
5.3 We are concerned that the proposed housing delivery test is addressing a symptom rather than the causes of shortfalls between homes allocated in sites in local plans and actual build-out rates. The drivers behind the numbers of housing being built are beyond the control of the planning system, and driven by wider economic factors including: access to finance; shortage of construction skills; an increased prevalence of a smaller number of large developers. It is important to fully understand the reasons for under-delivery and identify solutions for tackling these before central government intervenes to direct new sites to come forward.
5.4 The NPPF already provides a strong incentive for councils to identify and keep up-to-date a deliverable five year housing land supply. Councils are already required to assess annually if there are sufficient deliverable sites to allow for the provision of five years of housing, based on the identified housing requirement for the area. If there are not, they will look to identify other sites to come forward. Therefore, the housing delivery test is in a number of ways duplicative of existing policy.
5.5 Further, councils approve almost nine out of ten planning applications received, but many of these permissions remain outstanding. A recent study, commissioned by the LGA and carried out by industry experts Glenigan, shows that in 2014/15, there were 475,647 homes in England which had been given planning permission but have yet to be built.
5.6 Councils need to be able to create stronger incentives for developers to build out sites. Councils will always seek to work in partnership with developers to get building underway as soon as planning permission has been granted but in exceptional cases, and as a last resort, other approaches may be required, including:
5.6.1 Financial penalties for developers where they have sought and acquired a planning permission - using up the land supply in the planning system – but then allowed it to expire: This could include a percentage increase in Community Infrastructure Levy that increases every year the development remains un-commenced after the first planning permission has expired or the ability for councils to charge. The powers could also enable councils to charge an amount equal to the estimated annual council tax take from that development every year from the point that the original permission expires. Safeguards and exemptions would need to be put in place to ensure that individuals and small developers would not be disproportionately penalised by this measure and that developers were not dissuaded from bring forward planning applications.
5.6.2 Streamlined compulsory purchase powers where permissions have expired and development has not commenced: This should include an exemption from the requirement to purchase the land at the current market value and pay compensation to the land owner. Instead local authorities should be enabled to compulsorily purchase land at its existing use value. Councils could then directly commission build-out of the land – this could include packaging land into smaller parcels, which in turn could support small and medium size builders.