Select Committee on Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions Written Evidence


Memorandum by the Planning Officers' Society (AH 41)

INTRODUCTION

  1.  The Planning Officers' Society represents senior managers involved in the management of the Town and Country Planning functions of local authorities and regional bodies in England. A Membership of approximately 500 professional planners has a keen interest in how the planning system operates in relation to affordable housing.

  2.  The Committee has resolved to carry out an inquiry into affordability and the supply of housing with particular reference to 10 issues. The Society evidence focuses on the following seven issues, number three to nine in the bullet points on the ODPM Committee Press Notice PNO 4 of the 11 October. They are:

    —  The economic and social impact of current house prices;

    —  The relationship between house prices and housing supply;

    —  Other factors influencing affordability of housing for sale including construction methods and physical measures;

    —  The scale of the Government's plans to boost housing supply;

    —  The relative importance of increasing the supply of private housing as opposed to subsidised housing;

    —  How the planning system should respond to the demand for housing for sale; and

    —  The scale of housing development required to influence house prices and the impact of promoting such a programme on the natural and historical environment and infrastructure provision.

EVIDENCE OF THE PLANNING OFFICERS' SOCIETY

  3.  The Economic and Social Impact of Current House Prices; the Relationship between House Prices and Housing Supply; and Factors Influencing Affordability of Housing for Sale Including Physical Measures

  The Society shares the concerns about the inability of many to enter the housing market. The short, medium and long term consequences of the inability of households to enter the housing market are manifesting themselves in various parts of the country with economic as well as social consequences.

  4.  However, the Society notes that following the Barker Review, the Treasury's response and the recent Office of the Deputy Prime Minister July 2005 Consultation Paper on Planning for Housing Provision, assume that increased housing supply will be the main policy instrument to address affordability problems, and this increase can be delivered through the planning system. We believe that an approach based on increasing supply at any cost is misplaced. The reformed planning system was able to produce double the current level of housing supply 20-30 years ago. The Committee will no doubt be aware that over the last 20-30 years it is the decrease in publicly subsidised housing, which has led to the reduction in supply not inherent limitations in the planning system. Private house building has remained at approximately the same level over this period. We believe that the importance of financial and fiscal measures is underestimated in the Barker Review and the Treasury and ODPM's subsequent thinking. Private house building has not been able to increase to compensate for the loss of public sector housing with an inevitable shortfall in overall supply.

  5.  This has exacerbated the housing affordability situation for those now seeking to be accommodated in private housing.

  6.  We do not believe that the private sector will be able to build society out of the current affordability housing problem without interventions in the size and type of housing being provided, as well as any increase in land supply which may be necessary.

  7.  Furthermore the Government's reliance on the planning system to deliver funding for intermediate and social housing is not increasing the supply of affordable housing significantly. Evidence from ODPM's research suggests that there is a transfer of resources occurring instead. The private sector may be finding sites for affordable housing, but is it increasing the numbers of units provided? Evidence is far from conclusive.

  8.  As new house building only accounts for 1% of the annual change in the overall housing stock, it is easy to over estimate the impact of increased housing supply on house prices. That is not to deny a relationship, but simply to suggest that levels well above the buffer levels of an additional 20 or 40% contemplated in the Barker Review, could be necessary to have a significant influence on supply in many parts of England. (Barker's analysis was at the national level.)

  9.  In seeking to develop its policies for affordability the Government will need to address how resources made available can stimulate equity share, discounted first time purchasers' housing, and other intermediate housing to replace the 150,000 dwellings per annum provided by the public sector until the 1970's. It is the inability of the private sector to increase its building programmes and compensate for the reduction in public sector housing which is underestimated and worthy of further consideration as a physical measure by the inquiry. While site allocation through the planning system and planning delays may be factors which impact on housing supply, has the industry the capacity, initiative or appetite for significantly increasing its output?

  10.  Planning gain until the Barker Review had not been regarded as a fiscal measure. However, the growth in the Government's expectation that the planning system will provide the majority of affordable housing (more than half of all affordable housing is now provided by Town & Country Planning Section 106 Agreement in the southeast) has led to it being so regarded. We believe that Barker's proposals for planning gain supplement are fundamentally flawed. The Office of the Deputy Prime Minister's previous proposals for voluntary planning charges/planning tariffs were directly related to affordable housing problems and other local infrastructure and community requirements. These are now widely supported by a remarkably broad coalition. From the British Property Federation, through to the Planning officers Society and Local Government Association, including the RTPI and RICPS and other important players; all are worried that Barker's proposals will slow up the system and reduce the resources available to address affordable housing difficulties locally with a new system of national taxation. We would ask that the Inquiry considers this aspect of physical measures.

THE SCALE OF THE GOVERNMENT'S PLANS TO BOOST HOUSING SUPPLY; THE RELATIVE IMPORTANCE OF INCREASING THE SUPPLY OF PRIVATE HOUSING AS OPPOSED TO SUBSIDISED HOUSING; AND HOW THE PLANNING SYSTEM SHOULD RESPOND TO THE DEMAND FOR HOUSING FOR SALE

  11.  The Society is concerned at the lack of clarity about the Government's plans to boost housing supply. Regional Spatial Strategies are looking at the environmental, economic and social implications of increasing housing supply as suggested in the Barker Review. We support this process which allows for consideration of the appropriate balances. However, we have no confidence that the suggestions put forward by the Office of the Deputy Prime Minister in the July 2005 "Planning for Housing Provision" Consultation Paper, would lead to the release of additional serviced land with infrastructure provided. We believe that a full response from Government to the Barker Review is overdue to allow the scale of the Government's proposals to be clear. There is clearly a risk in the current ODPM thinking that addressing supply side factors out of context could lead to a serious risk of the market losing its focus on brown field sites as it cherry picks longer term phases of later reserve green field sites and responds to demand rather than need. (Our full comments on the July 2005 Consultation is available on the Planning Officers' Society website.)

  12.  If planned residential land is not coming forward in growth areas, there is an assumption in the July consultation that later phases of land should be brought forward. However, this is likely to lead to an inefficient use of public resources as duplication or diversion of infrastructure investment requirements is likely to occur. An appropriate balance needs to be found to allow authorities to address unforeseen constraints on the provision of serviced planned, first phase developments. Current Government Sustainable Communities infrastructure funding is unlikely to resolve difficulties if they occur in many areas.

  13.  The planning system can provide planned supply at different levels depending on the final decisions taken on Barker's recommendations. However, what is critical is that land to be developed does not undermine brown field development; is released in a planned way ensuring adequate infrastructure; and is focused on addressing the type of unit which would be of greatest assistance to first time purchasers for those wishing to enter the intermediate housing market.

  14.  Planning operates in a medium to long term time scale. The influence of planning decisions on the housing market can be over stressed. Land allocation and release mechanisms have to be judged against trends and not just based on current market conditions. Decisions to release any later phases of residential development need to take account of market conditions over a minimum of a three year period but to be based on Regional Spatial Strategy and local development document, proposed land supply monitored through annual monitoring statements.

  15.  The Inquiry is interested in the relative importance of increasing the supply of private housing as opposed to subsidised housing. We comment that the large reduction in the funding of subsidised housing in recent decades has underlain alternative options for those now suffering affordability difficulties. It is a political choice whether new housing to address the affordability problem is supplied from the private sector or from the public sector. However, we do not believe that increasing the supply of private housing alone will resolve the affordable housing crisis. If private housing is expected to increase supply to eradicate affordable housing difficulties, then size and type of housing and the targeting of those dwellings to those experiencing current difficulties will need to be achieved through policy levers and interventions.

THE SCALE OF HOUSING DEVELOPMENT REQUIRED TO INFLUENCE HOUSE PRICES AND THE IMPACT TO PROMOTING SUCH A PROGRAMME ON THE NATURAL AND HISTORIC LOCAL ENVIRONMENT AND INFRASTRUCTURE PROVISION

  16.  We have commented above on the relationship between house prices and housing supply. The Barker Review contains interesting analysis of the impact of different levels of housing provision on house prices. We submitted above that, even at the higher levels of the additional buffer proposed by Barker, the impact on house prices on an annual basis will be relatively limited.

  17.  It is difficult to generalise on the scale of housing development's impact on the natural and historical environment and infrastructure provision. Transparent optional planning charges/planning tariffs through the local development framework may well be able to resolve infrastructure provision difficulties from the increase in the value of housing land locally if the planning supplement charge proposal is not proceeded with. (Although in cases of particular difficulty infrastructure funding may be required upfront to unlock developments.) Impacts on the natural and historic environment are better judged at the Regional and Local level. However, provided the right sites are developed in a planned way with infrastructure provided and environmental impacts fully considered, then the scale of development proposed by Barker as buffers would not inherently put at risk natural and historic environments, provided that these factors are properly taken into consideration in the regional and local planning processes. However, land release mechanisms should not be driven by short term market considerations. Allocated sites proposed to minimise their impact on the environment should be brought forward whenever possible to achieve infrastructure provided sites. Suitable policy levers would be needed to maximise the contribution any additional land supply might make, to directly resolving the needs of those currently unable to enter the housing market or find rented accommodation.





 
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