Briefing Note on Government’s consultation – planning for the Right Homes in the Right Places – September 2017

The Government launched a consultation on 14 September, which proposes a range of changes to the NPPF including how Local Authorities should calculate their housing delivery target. This is an 8 week consultation (running until 9 November). The Portfolio Holder for Planning and Infrastructure has requested that the council submits a response.

Establishing a housing target

  • The consultation proposes a standard methodology that Councils can use to calculate their housing requirement. For Basingstoke and Deane Borough Council, this results in a requirement for 974 dwellings per annum (dpa), as opposed to the 850 dpaset out in the adopted Local Plan.
  • The requirement has been based upon a formula that identifies the forecast average annual household growth over the next ten years (the ‘demographic baseline’) multiplied by an affordability factor. This is based on the premise that if housing is unaffordable it is an indication that there is anunmet demand for housing in the area.
  • The consultation report therefore proposes a 3 step process. The first step sets the baseline figure, based on demographic trends. It states that ‘the demographic baseline should be the annual average household growth over a 10 year period’. These household projections should be regarded as theminimum local housing need figure.Using the 2014-based household projections (which are based upon the SNPPs 5yr/6yr past trends[1]) and rolling this forward over ten years (2016-2026) leads to a figure for BDBC of 772 units per annum. This is not dissimilar to the ‘SNPP baseline’ used at the Local Plan inquiry.
  • The report introduces a second step which is an affordability adjustment based on the premise that a reasonable level of affordability is where the ratio of house prices to earnings is 1:4. The affordability ratio in BDBC is 1:8.21 (mean house prices to mean earnings). Our demographic baseline is therefore increased by a factor that accounts for this level of unaffordability (in our case, an increase of 26%). The precise gearing of this adjustment has been determined to ensure that the sum of Local Authorities’ targets across the country would be sufficient to meet the national housing need (266,000 dpa).
  • SajidJavid has stated that the figures should not be mistaken for a hard and fast target. However the consultation report states that‘there should be very limited grounds for adopting an alternative method which results in a lower need than the proposed approach’ (para 47). Whilst the expectation is that LPAs adopt the proposed method, they could set higher targets, for example, to meet the needs of neighbouring areas or to support increased economic growth. The figure could also go down if there are ‘environmental designations or other physical or policy constraints which prevent needs being met’ but this will be tested vigorously through examination. Where LPAs are proposing a local housing target abovethat given by the Government’s approach, Inspectors will be advised to work on the presumption it is sound.
  • In terms of transitional arrangements, for plans adopted in the last five years (as in the case of BDBC), the new standardised method should be used when next reviewing or updating the plan. When plans are more than five years old (in BDBC’s case May 2021), the new standardised method would apply automatically. It is not clear the extent to which the new target will be a material consideration in planning decisions in the interim.
  • As the data inputs are likely to change (housing target every two years, affordability every year), it is proposed that LPAs can ‘fix’ their housing target for 2 years after submitting their Plan to smooth the examination process.

Other matters relevant to the housing target

  • The consultation proposes to cap the increase so that no Council’s housing target is more than 40% above their current requirement – the so-called Step 3. It also proposes measures for where Local Authorities are working on joint housing strategies. Neither of these are currently relevant to BDBC.
  • The consultation includes a database setting out %s of land in each local authority area covered by Green Belt, National Parks, AONB and SSSI. In the case of BDBC this is estimated at 33%. This data has not been used in the housing need calculation.

Other issues raised in consultation

The Government consultation includes separate proposals relating to the following:

  • To smooth the operation of the duty to cooperate, it proposes to set a requirement for Councils to have a Statement of Common Ground with other local authorities (including county councils) within their housing market area where planning issues need to be addressed by more than one LPA. BDBC was considered to be a self-contained housing market area in the Local Plan examination but it suggests using another geographical area ‘where justified and appropriate’. The Statement of Common Ground should set out the strategic cross-boundary matters (though the emphasis appears to be strongly focused on matters relating to housing delivery) and provide a record of where agreement has and has not been reached. LPAs should have an outline statement in place within 6 months following publication of the revised NPPF (due for publication in Spring 2018) and have a final SoCG in place within 12 months. The Statements should then be regularly reviewed to be kept up to date.
  • It is proposed that plan makers should disaggregate their total housing need into the need for different types of housing (older and disabled people, affordable housing, self-build etc) as part of the plan-making process. The consultation doesn’t outline how this should be done and ‘welcomes suggestions’ on how this process could be streamlined. It also questions whether the current definition of older people should be updated.
  • In is proposed that national policy be amended so LPAs provide neighbourhood planning groups with a housing figure. This couldreflect ‘a reasoned judgement based on the settlement strategy and housing allocations in the(ir) plan’. Where this happens, this number would not need to be tested during the NPs examination. The consultation seeks views on whether these numbers should be set out in Local Plans. Where the Local Plan is out of date and cannot be relied upon to produce a figure the consultation proposes a simple formula-based approach where the housing target is the same % of the LPA’s housing target as their population is a % of the LPA area.
  • The consultation proposes to clarify how viability is considered in Plan making, though the proposed suggestion that LAs should set out details of AH contributions required, infrastructure needs and how they will be funded, with the expectation that this should result in fewer viability issues at the planning application stage. It is also proposed to make viability assessments (provided with planning applications) ‘simpler, quicker and more transparent’. It also considers imposing duties on Councils to publish summary data from S106 agreements and monitor and report on whether these contributions have been received and spent.
  • The consultation confirms the Government’s intention to increase nationally set planning fees by 20% for LPAs who commit to investing additional fees in improving the productivity of their planning departments. It also suggests the increase of a further 20% on the current fee could be applied to authorities delivering the homes their communities need and asks for views on a suitable criteria to enable the fee to be applied.
  • The document champions the other measures the Government is putting in place to increase build out rates including the £2.3bn Housing Infrastructure Fund – and seeks views on whether there is anything else they could be doing. It also proposes to move advice about prematurity from the NPPG to the NPPF to strengthen Plans and prevent them being undermined before they are finalised.
  • There would be a swathe of changes to the NPPF/NPPG to support the approaches proposed in the consultation.

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[1] 6yrs international migration and 5yrs internal migration