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

Memorandum by the Planning and Development Association (PDA) (AH 42)

  1.  The Planning and Development Association (PDA) has a membership of around 100 qualified planners either employed directly in the housebuilding industry or working with planning consultancies and legal practices advising housebuilders. In some cases they also advise local authorities on plan preparation and assist in development control. Its members therefore have experience of all types of housebuilding throughout the UK and of the planning policy and practice context.


  2.  The Government's intention to increase housing supply is welcome, as is its emphasis on meeting the desire for home ownership, while also seeking to make provision for those who will never able to afford home ownership, or for whom it would not be an appropriate tenure.

  3.  Demand for housing is dependent on a large number of financial issues—the availability of mortgage funding, its affordability, the performance of the economy and the growth in wages and salaries. However the supply of new houses is dependent on all those factors, plus the planning system.

  4.  It is broadly true that, over the last 25 years, despite some reverses, the economic and financial climate has been favourable to the housing market and that demand for owner occupation has increased as a result. However, the planning system which controls the supply of new homes has become more difficult to administer and control, from the point of view of the local planning authorities, and considerably more difficult to use from the applicant's point of view, including housebuilders. As a result, supply has not expanded to meet demand.

  5.  The problem is that the system is expected and required to mediate in ever more complex issues, which themselves require increasing attention to process, as opposed to outcome. These include community consultation, environmental assessment and design, as well as implementing ever-more interventionist polices that seek to micro-manage the housing product, at the same time as increasing its supply. As these demands increase, the skills required to deal with eg urban design, are not available and, despite Planning Delivery Grant, local authorities lack resources to deal with the applications they receive.

  6.  It is, in practice, proving impossible to square the circle created by the sheer weight of policy. Government now faces a clear choice. Either it wants more houses built or it simplifies policy to achieve that end. Alternatively, it admits that its aim is to micro-manage the product, in order to achieve Government's ideas of perfection (which is not necessarily the same as the purchasers' view). However it cannot do both, because they are mutually exclusive aims.

  7.  The recent upheaval in the planning system has added to confusion and delivery. The new Planning and Compulsory Purchase Act 2004 is based on the false premise that the problem was the system itself. In reality the problem is the policies that Government and local authorities prescribe and until these are simplified and, unless and until, some effective sanctions are imposed on local authorities who exceed policy limits or deliberately abuse processes (eg refusal to register planning applications or use their own dilatory plan preparation to claim applications are "premature") there will be no increase in new housing supply. Indeed, as practitioners on the ground, observing the delays experienced by our clients, the lack of resources available to local authorities and the overload of consultation of all kinds, we believe the new system is close to collapse. These comments apply also to PINS, which is over-burdened by local Inquiries, in addition to its appeals work.

  8.  PPG 3 is an example of over-prescription. In seeking, inter alia, to prescribe density, restrict parking and limit the use of greenfield land, it has seriously disrupted new housing supply in the pursuit of what are, for reasons set out below, often mistaken objectives. This is where the choice between more micro-management or more housing is most starkly revealed.

  9.  The revisions to PPG 3, currently being undertaken, appear to be trying to do the right things (ie increase land supply which is a vital pre-requisite for increasing housing supply), but it is doing that by cumbersome and self-defeating, rather than simple and deliverable, mechanisms. Additionally, draft proposals seek to prescribe tenure mix, house type and mix and expect local authorities to make market judgements, for which they are entirely unqualified. This is entirely inappropriate, if a step change in supply is to be achieved.

  10.  Against this background we set out briefly below some considerations that will affect housing output adversely and which are part of existing or emerging policies.


  11.  Many policies seek to restrict the total supply of new housebuilding but at the same time, to increase the supply of affordable housing. This is totally contradictory because restrictions on supply add to pressures of shortage, increasing the "need for affordable housing". Moreover, most affordable housing is delivered through cross-subsidy from landowners and developers under s106 Agreements. The larger the percentage of affordable housing prescribed from a restricted total, the less that will be provided, while it is less likely that private investors will be prepared to undertake the development.

  12.  An example of this perversity is to be found in the East of England Plan which prescribes that 30% of all new houses out of a policy total of 23,900 pa (ie 7,200) be social rented. The effect of this policy will be to reduce the amount of private housing to be supplied to below the current output—an outcome that bears no relationship to the requirements of a prosperous and fast growing region, nor does it reflect the Government's aspirations to expand home ownership.

  13.  The availability of more middle to upper-value housing is essential to create movement in housing markets. It is availability and movement that first time buyers need. "Affordable," defined as social rented housing, is not what people facing affordability problems need. They are a completely different group to those in housing need.

  14.  It would also be helpful to developers who are trying to respond to the Government's £60,000 house agenda if such units could be defined as "affordable" for the purposes of any local plan policies.


  15.  The recognition in the consultation draft, "Planning for Housing" that increased land supply is an essential component of increasing housebuilding is both very welcome and long overdue. The proposals that local authorities should ensure a five-year supply is available and that they should identify up to 15 years supply, so that it is ready to be rolled forward if needed, is welcome. However, the mechanisms proposed for achieving this are too cumbersome, whilst relying on the reviews of plans, in order to release land from the 15-year review, will be too slow. There must be a presumption in favour of development of this land, capable of being exercised on appeal by applicants, provided they can demonstrate an inadequate land supply.

  16.  In some quarters, these proposals for a five-year supply and 15-year reserve, have been portrayed as undermining the plan-led system. We disagree and believe that this view stems from the failures of the plan-led system to deliver over the years. In our view the plan-led system should be doing exactly what is proposed, ie ensuring an orderly and predictable supply in the long run. This is not a proposal to increase windfalls or unpredictable development. It is a proposal to identify long-term development; exactly what has been missing from the planning system for 25 years.


  17.  Despite its significance, urban regeneration cannot be pursued to the detriment of balanced housing markets in all locations, supplying a mix of all types of housing. The current emphasis is resulting in an over-supply of flats in urban areas and a shortage of family housing, adding to affordability problems in areas of highest demand.

  18.  It is also unavoidable that the most economically viable way to provide subsidised affordable housing under s106 Agreements is on greenfield sites, because the uplift in value is far higher, as compared with urban sites with high existing use values and competing uses. These sites do not have the capacity to provide s106 housing and, if pressed, the owners will sell for non-housing development, realising a higher value. This is a dilemma not recognised in current policy.


  19.  One of the Government's responses to providing an increase in housing supply has been the designation of Growth Areas under the Communities Plan. This is welcome, in that it provides long term planning and investment horizons in these areas which should help infrastructure planning and provide certainty to the local community. However they involve long lead times and should not be pursued to the exclusion of other sites and locations, particularly those that can be brought into production before the large allocations come on stream, otherwise there is a danger of a hiatus in supply.

  20.  Moreover, each of these locations has market absorption limits and significant levels of growth will have to be accommodated in areas beyond them. The allocation of more sites in more market locations is necessary to start and to maintain a step change in supply, alongside the larger and more difficult locations.


  21.  Infrastructure funding can be made more difficult if too much development is planned in limited locations. It is essential that the ability of the private sector to generate funding from sites and the speed at which it can be supplied informs decisions about the location of development. There are some useful innovations in funding being developed at present, including the Milton Keynes tariff arrangement. Equally, SEERA has produced a useful paper on infrastructure which, instead of exaggerating without properly quantifying the scale of infrastructure required, as the East of England Regional Assembly has done, has quantified the "funding gap" and has emphasised that the problem should not be exaggerated, nor is it insoluble. This approach should be refined and developed.

  22.  Infrastructure funding must be based on proper assessments of what is required to support a given level of development. Developer funding should be seen as part of that package, alongside existing education, health, local highways and Department of Transport funding streams. Equally, the levels and rates of development over which this cost is to be spread is a critical factor in its deliverability.

  23.  Related to this is the need for co-ordinating the approaches of Government agencies, from the Highways Authority to Network Rail and from the Environment Agency to English Nature. Very often these agencies appear to be pursuing totally different agendas to that of ODPM and the Treasury, in relation to development. The Highways Agency, for example, has been, and continues to be, a major obstacle to development in the Growth Areas, at Milton Keynes, Northampton, Corby/Wellingborough/Kettering in particular.

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