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Written Ministerial Statements
Monday 24 January 2005
DEPUTY PRIME MINISTER
Planning for Mixed Communities
The Minister for Housing and Planning (Keith Hill): Government policy is to create sustainable communities that contain a well-integrated mix of decent housing of different types and tenures to support a wide range of households of different sizes, ages and incomes. Planning has an important role to play through the provision of an appropriate mix of housing which addresses the needs of households, including in terms of how much they can afford to pay for housing.
In July 2003, the Office of the Deputy Prime Minister issued for consultation "Influencing the Size, Type and Affordability of Housing" which proposed changes to Planning Policy Guidance Note 3: Housing (PPG3) in relation to its approach to planning for affordable housing and mix of housing.
Part of this consultation document related to rural areas. In a separate statement to the House today, I have announced the publication of the final update to PPG3 entitled "Planning for Sustainable Communities in Rural Areas" which deals with the provision of affordable housing in rural areas.
Following extensive consultation discussions about "Influencing the Size, Type and Affordability of Housing", it became clear that there was no consensus among practitioners about how best to plan to achieve an appropriate mix of housing in an area. Some practitioners have advocated an approach by which local planning authorities make provision in their local development documents for a specified mix based on the size and type of housing. Others feel that this approach would be too prescriptive, particularly when applied to specific sites, where they feel account needs to be taken of the particular circumstances of each site and the housing market at the time a planning application is made.
In the light of the consultation and post-consultation discussions, we have developed further the approach to planning for a mix of housing. The revised approach is reflected in the consultation document "Planning for Mixed Communities". This is being published today by the Office of the Deputy Prime Minister and copies are available in the Libraries of both Houses. The consultation document incorporates draft policy for planning for affordable housing and for a mix of housing.
The proposed approach on mix, in relation to market housing, focuses on household types, and recognises that planning for households requires local planning authorities to take account of market considerations and to provide for a degree of choice. It is proposed that local planning authorities should plan for the range of
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different households to be provided for over the plan period and not for a range of housing sizes and types based on floorspace or room numbers.
The proposed approach on mix, in relation to affordable housing, is that the approach to planning for an appropriate mix of affordable housing should continue to be based on the size and type of housing. This appears to be generally supported by local planning authorities and housing providers.
The wider approach to planning for affordable housing in this consultation update has been redrafted in the light of the previous consultation exercise. The changes are primarily to improve clarity in the operation and scope of the policy, particularly where there is explicit flexibility, such as in the approach to site-size thresholds above which affordable housing is to be sought. The policy objectives remain the same, namely to increase the amount of affordable housing where it is needed, in the context of delivering agreed housing numbers. The proposals include: a requirement that all local planning authorities should have an affordable housing policy; a stronger regional role, including co-ordinating the preparation of local housing assessments; the lowering of site size thresholds above which affordable housing is to be sought; and the requirement that local planning authorities balance the need for affordable housing against the likely development potential of sites.
A key objective of the policy is to create mixed and inclusive communities that offer a wide range of housing and promote social inclusion. To do this local planning authority policy must be based on a robust evidence base. A key component of the evidence base is the preparation of a local housing assessment. The consultation update emphasises to local planning authorities the importance of keeping the assessment up-to-date and developing the assessment in collaboration with key stakeholders, including housebuilders, who understand and have to take account of housing markets.
The final policy will be accompanied by practice guidance on carrying out local housing assessments and on planning for mixed communities. A key objective of the practice guidance will be to set out clearly the roles and responsibilities of different stakeholders in the planning for housing process. The guidance is currently in preparation. The intention is to involve stakeholder representative bodies in developing and finalising this guidance.
The proposed policy changes would replace paragraphs 9 to 17 of PPG3, Annex C would be updated with new definitions, and Annex D would be updated with the details of new practice guidance and relevant ODPM Circulars. DETR Circular 6/98 (Planning and Affordable Housing) would be cancelled.
This consultation update addresses the demand-side aspects of planning for housing. Later this year, the Office of the Deputy Prime Minister will consult on proposed changes to the way in which the planning system allocates and releases land for housing in response to market signals. The supply-side update to PPG3 will take forward the Government's response (with respect to PPG3) to the recommendations in the Barker review of housing supply.
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Planning for Housing
The Minister for Housing and Planning (Keith Hill): This statement concerns the planning system's role in providing sufficient homes to meet the variety of housing needs in England. The intention is to remove barriers to delivering the housing needed in our communities and ensure the planning system is not a brake on an adequate and continuing supply of sites for housing in sustainable locations.
The Office of the Deputy Prime Minister is publishing today two updates to planning policy guidance note 3: housing (PPG3), entitled "Supporting the Delivery of New Housing" and "Planning for Sustainable Communities in Rural Areas". Both updates will help to increase the supply of housing where it is needed in the most sustainable way possible. They reflect the changes to the planning system made in the Planning and Compulsory Purchase Act 2004.
These updates were the subject of consultation in July 2003. The remainder of the PPG3 update "Influencing the Size, Type and Affordability of Housing", of which "Planning for Sustainable Communities in Rural Areas" was a component, is being further consulted upon. I am making a separate statement on this today.
Supporting the Delivery of New Housing
PPG3 requires local planning authorities, when preparing their local development frameworks, to review all their non-housing allocations and to consider whether some of this land might be better used for housing or mixed use development. The Government's experience is that nevertheless many local planning authorities continue to reserve an excess supply of land when it would make sense to consider this for housing.
The consultation update proposed an approach to the handling of applications for housing and mixed use development on land allocated or previously used for industrial or commercial use which is no longer needed for that use, and which is both suitable for and needed for housing. The Government have considered the responses to the consultation and are adding today the following new paragraph 42 (a) to PPG3:
"Local planning authorities should consider favourably planning applications for housing or mixed use developments which concern land allocated for industrial or commercial use in saved policies and development plan documents or redundant land or buildings in industrial or commercial use, but which is no longer needed for such use, unless any of the following apply:
the proposal fails to reflect the policies in this PPG (including paragraph 31), particularly those relating to a site's suitability for development and the presumption that previously-developed sites (or buildings for re-use or conversion) should be developed before greenfield sites;
the housing development would undermine the planning for housing strategy set out in the regional spatial strategy or the development plan document where this is up-to-date, in particular if it would lead to over-provision of new housing and this would exacerbate the problems of, or lead to, low demand;
it can be demonstrated, preferably through an up-to-date review of employment land 1 (refer to annex D for practice guidance), that there is a realistic prospect of the allocation being taken up for its stated use in the plan period or that its development for housing would undermine regional and local strategies for economic development and regeneration."
In December 2004, the Office of the Deputy Prime Minister published practice guidance for local planning authorities on carrying out employment land reviews to assess the demand for and supply of land for employment. The guidance aims to help local planning authorities assess the suitability of sites for employment development, safeguard the best sites for employment and identify those which are no longer suitable for employment development and which should be made available for other uses. A copy of the practice guidance is available in the Libraries of both Houses.
Planning for Sustainable Communities in Rural Areas
The consultation PPG3 update "Influencing the Size, Type and Affordability of Housing" proposed to replace the rural exception policy with an allocation policy, which would enable local planning authorities to allocate sites solely for affordable housing. In the light of the consultation responses a revised approach has been developed, aimed at meeting concerns expressed about the practical effects of the proposed approach. The Government are today amending PPG3 policy, adding a new section which will enable local planning authorities to allocate sites in rural areas, but also to take advantage of windfall sites through a continuing rural exception approach. The intention to retain the rural exception policy alongside a new allocation policy was signalled by my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs when she published her Department's five year strategy "Delivering the Essentials of Life" on 8 December 2004.
The replacement paragraph 18 of PPG3 is as follows:
"It is important that there is adequate housing provision in rural areas to meet the needs of local people and to contribute to the delivery of sustainable communities. Regional spatial strategies should set out how planning at the local level is expected to contribute to meeting identified rural affordable housing needs (including Gypsies and Travellers where relevant). Local planning authorities should make sufficient land available either within or adjoining existing rural communities to enable these local requirements to be met in a manner which contributes to the achievement of sustainable communities. Affordable housing provision in rural areas should be supported by a rural exception site policy (see annex B). Rural exception sites should be small, solely for affordable housing and on land within or adjoining existing small rural communities 1 which would not otherwise be released for general market housing. The affordable housing provided on such sites should meet local needs 2 in perpetuity and count towards the overall level of housing provision. The rural exception site policy applies to both allocated or windfall sites."
An addition to paragraph 36 of PPG3 is highlighted below:
Authorities should make specific allowances for all the different types of windfalls in their plans. Allowance should be made on the basis of examining past trends in windfalls coming forward for development and on the likely future windfall potential as assessed in a capacity study. No allowance should be made for greenfield windfalls (except for rural exception sites, see annex B and refer to annex D for good practice advice on capacity studies).
1 Small rural settlements have been designated for enfranchisement and right to acquire purposes (under section 17 of the Housing Act 1996) by S.I. 1997/620—625 inclusive and 1999/1307.
2 Should be set out in the local development document and can include key or essential workers and those with a family connection.
The replacement annex B of PPG3 is as follows:
Annex B: Rural exception sites
1. All local planning authorities that include rural areas should include a rural exception site policy in the relevant development plan document. A rural exception site policy enables the authority to allocate or release small sites within and adjoining existing small rural communities 1 , which may be subject to policies of restraint, such as Green Belt, and which would not otherwise be released for housing, but only in order to provide affordable housing to meet local needs 2 in perpetuity.
2. In preparing local development documents, local planning authorities should take account of their local housing assessment and should consider the benefits of preparing village appraisals, which encompass assessments of housing, economic and environmental profiles of rural communities. In doing so, they should work closely with their local communities, landowners and housing providers to prepare strategies for implementing exception schemes, including identifying possible sites. Based on these assessments, the local planning authority should set out:
what the local planning authority considers to be 'affordable' housing for the purpose of the rural exception site policy in the context of its local housing assessment or other appraisal; and
the area within which needs will be considered 'local', for example, in terms of market towns, groups of villages or parishes, or even a single parish. In some areas it may be possible to name particular settlements where there is evidence of need and where opportunities for affordable housing on rural exception sites will be explored.
3. Development plan documents may allocate sites solely for affordable housing andshould set out the criteria against which windfall sites will be considered.
4. Rural exception sites are not appropriate for general market housing or market housing for local needs only. It is unacceptable to include clauses in planning obligations which would enable lenders of private finance to dispose of property on the open market as a last resort if a borrower were to get into financial difficulties. Such clauses should also be unnecessary in the case of loans to registered social landlords, in part, because of the safeguards to private lenders offered by the Housing Act 1996. Planning obligations should be used to set out a cascade mechanism 3 that will ensure that occupiers are always found for affordable housing provided on rural exception sites.
1 Small rural settlements have been designated for enfranchisement and right to acquire purposes (under Section 17 of the Housing Act 1996) by S.I. 1997/620—625 inclusive and 1999/1307.
2 Should be set out in the local development document and can include key or essential workers and those with a family connection.
3 A mechanism which sets out the procedure to be followed to secure an occupant for affordable housing on rural exception sites, when such housing is vacated. This might set out the geographical areas or types of households that would be eligible for such housing.
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