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Northamptonshire County Council has previously submitted to Communities and Local Government, via a response to the Housing Green Paper, comments on the proposed Community Infrastructure Levy (Part 10 of the proposed planning bill). I believe that these comments will be of interest and worthy of consideration by the Public Bill Committee dealing with the planning bill and therefore I attach our response to the Housing Green paper.
Key points that I would draw your attention to in the response are:
§ The need to meet the ten essential tests that Northamptonshire County Council has identified, regardless of the system, for capturing developer contributions. This includes meeting certainty, robustness and transparency objectives.
§ There should be a clear evidence base for developer contributions / standard charge, linked to a business plan which would identify infrastructure requirements to support planned growth, phasing, costs, delivery partners, and potential funding sources. These plans should be prepared at sub-regional / principal authority level to secure a systematic and consistent approach to infrastructure delivery planning across local planning authorities boundaries. These should be prepared in parallel with the LDF as their infrastructure investment and delivery plan arm and updated regularly.
§ At the regional/sub-regional level, the new single Regional Strategy should set clear guidance on the scope of ('ingredients') and rule-base for a developer contributions / charging mechanism to ensure consistency, robustness and transparency. This would also significantly speed-up the process as it would avoid the need for protracted discussions and duplication on issues of principle at the local level.
§ There is a need for any system to address the forward funding of infrastructure, through the "banker" role, to ensure delivery at an appropriate stage in development.
§ The need for an organisation to play the "ringmaster" role.
HOMES FOR THE FUTURE: MORE AFFORDABLE, MORE SUSTAINABLE RESPONSE TO THE HOUSING GREEN PAPER
Thank you for the opportunity to comment on the Housing Green Paper. Northamptonshire County Council has a keen interest in progress on housing policy given that the county is providing a major contribution to the delivery of the Government's growth agenda. The response includes references to the recent Review of Sub-National Economic Development and Regeneration (SNR) as this is closely linked to the Green Paper thinking and proposals.
Northamptonshire lies within the Milton Keynes South Midlands (MKSM) growth area. MKSM is providing for the highest level of growth of all the growth areas, including Thames Gateway. Housing completions in MKSM have increased by 40% since the publication of the Sustainable Communities Plan in 2003. The county of Northamptonshire is accommodating 50% of this growth including more than 100,000 new homes and around 85,000 new jobs by 2021. The current review of the Regional Spatial Strategy (RSS) for the East Midlands is looking to extend the growth horizon to 2026 and will increase these figures. The RSS reinforces Northamptonshire as the principal focus for housing and economic growth in the East Midlands.
The County Council is working with the two local delivery vehicles (West Northamptonshire Development Corporation (WNDC) and North Northants Development Company (NNDC)) and other regional and local delivery partners to secure the necessary infrastructure investment to facilitate planned and sustainable growth in the county. West Northamptonshire continues to surpass its housing targets and North Northants has seen a step change in completions towards meeting its housing trajectory. Indeed, housing completions have increased by 56% in the north of the county between 2002/03 and 2005/06 since the introduction of the Sustainable Communities Plan. Partners are working hard to strengthen the delivery pipeline to ensure housing trajectories are met, including planning and investment pipelines. For example, in West Northamptonshire, WNDC currently has 28,000 homes in 'live' planning applications, which it expects to be determined over the next 18 months.
Northamptonshire County Council is a key player in the MKSM growth area and its operating structures under the Ministerial led Inter-Regional Board. Positive leadership and strong partnership working between the local authorities, local delivery vehicles (LDVs), and other national, regional and local delivery partners, including English Partnerships and the Regional Development Agencies, has been critical to success so far in securing the necessary infrastructure investment to facilitate planned and sustainable growth in MKSM, and it will continue to be so. However, the continued support of CLG and other Government infrastructure departments in meeting these challenges will be crucial.
Given the scale of growth being accommodated in Northamptonshire and in MKSM, and the delivery challenges this presents, the County Council has a keen interest in the proposals set out in the Green Paper and the SNR.
The 'headlines' below provide a summary of the key messages contained in the more detailed response which follows.
HEADLINE MESSAGES
1. Incentivising, investing in, and enabling growth: investment needs to be focused in those areas delivering the highest levels of housing growth
i. GAF and CIF investment needs to focus on areas delivering the highest levels of housing growth and regeneration for funding to deliver best value for money. Focused Growth Area investment and capacity should not be undermined by the introduction of New Growth Points and Eco-towns given that the Growth Areas are delivering more housing than these initiatives combined. ii. The significant revenue implications of high population growth need to be properly considered in the review of the Revenue Support Grant and mainstream funding mechanisms and methodologies need to be sensitive to growth. Current methodologies will leave the County Council with a massive revenue gap which will have a major impact on service provision and standards. Historic/trend based data is not appropriate to inform forward funding settlements. iii. Housing and Planning Delivery Grant (HPDG) needs to recognise and reward the significant contribution of county authorities (in two-tier areas) to delivering increased growth and performance. County Councils provide significant levels of technical support, strategic capacity and expertise to infrastructure planning and delivery in the Growth Areas and beyond, yet have not received any funding to support this work though the Planning Delivery Grant. As currently mooted they will miss out again under the HPDG proposals. In short, the current proposals fail to reflect the implications and reality of growth delivery in two-tier areas. iv. Affordable housing needs to be properly resourced to deliver the right type, size and quality of housing to meet local needs identified through the Housing Market Assessments, rather than being focused solely on increasing the number of affordable houses. This is a key role for the new Homes and Communities Agency (HaCA). v. Continued support for the established LDVs in the Growth Areas will be critical to the successful delivery of housing growth. NNDC[1] and WNDC[2] provide crucial capacity and expertise to boost delivery performance in Northamptonshire, including their developing role as 'ringmasters', driving, coordinating and programming delivery and working with partners to secure investment. The designation of further New Growth Points should not lead to a plethora of new LDVs and in particular UDCs and URCs which could result in the dilution of focus and resources, when other partnership arrangements would suffice.
2. Growth Areas need effective delivery, funding and management mechanisms
vi. The CSR07 announcement that Planning Gain Supplement (PGS) will not be taken forward is very welcome. The County Council wishes to contribute further to new thinking on the development of mechanisms for funding infrastructure. It proposes that any new system of developer contributions/standard charge should be based on the following principles: § Accountability -local, strategic and to whom? § Transparency -crucial -public/private/local confidence § Certainty to investment - when, how, who decides § Enabling - incentives risk, e.g. (no) link to permission date? § Hypothecation - invest where gain generated § Added value - complements, not substitutes for mainstream funding § Efficiency of process - not added bureaucracy/costs § Fit with delivery levels/mechanisms - sub region/LDV § Clear prioritisation rule/evidence base: the business plan § Forward funding - banker arrangements for meeting the "timeliness gap"
vii. A 'business plan' approach should be adopted across England to secure systematic infrastructure planning at sub/regional principal authority level. This should provide the evidence base for planning obligations/charges (see above). It would also enable clear links with the Sustainable Community Strategy and its vision and the LAA funding and performance framework. viii. Proposals to address the timing of infrastructure investment are critical if early delivery of growth is to be achieved. This issue is not addressed by either the PGS or the alternatives put forward in the Green Paper. Government and its agencies must work with local authorities and LDVs to develop and secure innovative and workable solutions to the front-funding of infrastructure. This should be a top priority. The County Council is investigating 'banker' mechanisms which draw on the Authority's prudential borrowing powers and where risks can be shared with a third party.
3. Greater autonomy for investment management and strengthened delivery arrangements at sub-regional / principal authority level will be critical to effective delivery ix. Proposals to move to a single Regional Strategy are supported on the basis that this will bring greater coherence between key aspects of regional policy and investment programmes. The preparation of visions to inform the Regional Strategy should be led by principal authorities at the sub-regional level to secure strategic capacity and to ensure clear links with the Sustainable Community Strategy and the LAA. x. There needs to be clear alignment between policy / strategy and funding at the regional/sub-regional levels. This should help to ensure that resources are best directed to fulfil policy objectives and outcomes. Sub-regions will be key to delivery. The 2007 Pre-Budget Report statement announcing greater autonomy to local authorities and sub-regions in the allocation and management of spending is welcomed. xi. Mechanisms need to be considered and agreed to retain and review the MKSM Sub-Regional Strategy to address strategic, cross-boundary growth issues in a joined-up, coherent and robust way whilst ensuring that this remains an integral part and within the framework of the respective single regional strategies. Arrangements will need to be agreed by the respective Regional Planning Bodies, working closely with the principal authorities. xii. Recognition of the importance of local authority leadership on infrastructure delivery is applauded. However, this needs to be at sub-regional / principal authority level to maximise LAA and Sustainable Community Strategy linkages and delivery agency buy-in through the LAA duty to cooperate, as well as ensuring strategic capacity. In two-tier areas principal authorities are responsible for the delivery of major and costly infrastructure such as roads, schools and waste management facilities and their capital programme decisions are critical to securing sustainable growth. Recent research by us into the potential impact of PGS indicated that more than 70% of the public infrastructure required by development is planned for and provided at this level.
4. Enhanced performance management and delivery frameworks should secure join up of national, regional/ sub-regional objectives and delivery agency buy-in. Case study evidence from the Growth Areas should inform performance reviews xiii. Government's commitment to MAA and LAA performance frameworks is welcomed. MKSM provides a unique opportunity to formally pilot/test the MAA concept at pan/sub-regional level, particularly focusing on transport. Effective sub-regional structures are already in place, including the Inter-Regional Board and Strategic Transport Board, and the history of effective partnership working is very good. This is a proposal that MKSM partners will discuss further and explore with you in the coming months. xiv. The introduction of a cross-government performance framework to ensure that the key infrastructure departments prioritise housing growth is welcomed. The joint PSA on housing should be clearly linked with MAA and LAA arrangements to ensure consistency, compatibility and alignment. Government should ensure its key delivery agencies such as HaCA, RDAs, the Highways Agency, Environment Agency etc are also party to the PSA. xv. The County Council supports and would wish to participate in the proposed CLG performance monitoring programme including the suggested three monthly cross-departmental reviews on infrastructure and planning to bring real delivery and generic issues to the table. A coordinated input from MKSM may also be helpful to Government. xvi. It is a real challenge for education authorities in the growth areas to secure the timely delivery of schools infrastructure. The demands are too great for current capital programmes and planning obligations fall a long way short of securing 100% funding, particularly for secondary schools. DCSF mainstream funding methodologies and allocations and CLG growth funding need to support education authorities in the growth areas to overcome these challenges, including support to meet higher eco and design quality standards, and to maximise community benefit opportunities through extended schools and multiple use centres. xvii. Government need to recognise the importance of a strong local economy and regeneration as a catalyst to release growth potential in an area, and is a key factor in the development of a robust and balanced housing market capable of delivering and sustaining housing growth targets. xviii. The expanded Regional Funding Allocations (RFA) initiative is supported. This should recognise and support the significant contribution of the Growth Areas to the UK economy and the delivery of the Government's housing delivery aspirations in the short, medium and long term. It is also important that the mechanisms are put in place to ensure the new and expanded round of RFA is genuinely cross-cutting and outcome/performance focused.
5. Sustainable growth, including higher quality and eco-design, needs to be secured through effective planning xix. Major urban extensions in the growth areas, many of which are on a scale comparable to the proposed eco-towns, should be considered by Government for eco-town status. This provides a real opportunity for Government to achieve its target of seeing 5 eco-town schemes start within 2 years, particularly if Government is to properly (and quite rightly) assess eco-town proposals through the planning system (as stated HGP page 31). The principle of development will already be established for these sites but planning obligations, masterplanning, design codes etc could still be shaped to meet eco-town objectives and outputs. xx. The increased emphasis on well-designed homes and places and in particular, green design measures is welcomed. Local planning authorities must be supported by the Planning Inspectorate in their drive to enhance design quality in line with Government policy. The ability to raise design standards could be strengthened by formalising existing mechanisms e.g. a rising minimum Building for Life standard could be made mandatory. xxi. 'Infrastructure availability' should not be a test of soundness for LDFs but 'business plans' should provide an infrastructure delivery risk assessment as a matter for consideration by the Planning Inspectorate. xxii. The County Council is a strong advocate of joint planning where the scale of development and infrastructure provision clearly raise issues which cross administrative boundaries and could be better managed at a more strategic level. Joint planning arrangements should be mandatory in the growth areas where this is clearly the case. xxiii. Widening of the Surplus Public Land Register is welcomed. Consideration should also be given to how Network Rail and other strategic (national interest) landholders could be incentivised to bring forward key development opportunity sites particularly in the growth areas.
More detailed comments are set out below:
1. Incentivising, investing in, and enabling growth: investment needs to be focused in those areas delivering the highest levels of housing growth
Investment in the Growth Areas (Chapter 5)
The statement in the Green Paper that Government will continue to support and invest in delivery in the Growth Areas over the Comprehensive Spending Review period (and I trust beyond) is welcomed. The promise of £300m CIF and a doubling of GAF by 2010/11 is also good news. In addition, this policy commitment also needs to be reflected in future Housing Planning Delivery Grant allocations, including to the principal authorities which make a major contribution to growth delivery in two-tier areas.
However, it is clear that the four main Growth Areas will be competing for funds with the first and second rounds of the New Growth Points and the new Eco-Towns initiative. The Government needs to ensure that its focus on growth area policy and resource investment across the national Growth Areas such as MKSM is not diluted and momentum not lost.
Funding should be proportionate to the amount of (additional) growth being delivered. This needs to be recognised in the allocation of growth funding. The value for money and private sector investment leverage provided by MKSM is clear and evidenced from the increase in housing completions (up 40%) since the advent of GAF. However many of the major urban extensions which will bring forward even higher levels of growth are at a crucial stage and dependent on GAF and CIF to provide the certainty and conditions for, and thus unlock further and even more significant private sector investment. This is evidenced by the housing trajectories and Programmes of Development produced by the Local Delivery Vehicles (LDVs) across MKSM. A diluting of support and focus runs the real danger of slowing the momentum which has been generated in MKSM and the other national growth areas particularly within the national economic context of a slowing housing market.
The Housing Green Paper refers to 'new procedures' to be set out by Government to ensure mainstream programmes provide proper support for the high growth areas as well as new procedures for councils and Government Departments to plan schools, new health facilities and improved transport facilities. The introduction of measures which will enhance support for the Growth Areas through mainstream programmes is a very welcome step and was a key recommendation of the cross-partner MKSM submission to CSR07. Local authorities and other key delivery partners in the Growth Areas should be consulted on the draft procedures to test their ability to deliver the right outcomes and their efficiency. This is a significant and free source of advice which is readily available.
Growth Impact on Revenue Funding
The County Council has responded to Government on its Revenue Funding Formula consultation (see attached). When looking at mainstream programmes, Government needs to take account of the huge revenue implications for authorities providing services to communities in the Growth Areas. Formula Grant must provide incentives for authorities to deliver the Government's growth policy, and dis-incentives to growth need to be removed. The emphasis of the revenue funding formula must shift from using an historic/trend based data approach to one that is more dynamic and takes account of the Government's spatial and economic growth policy and its affect on the recent, current and future population.
In 2006, NCC commissioned PricewaterhouseCoopers (PwC) to investigate the revenue implications of growth ('Understanding the Revenue Implications of High Population Growth' (PwC Sept 2006)). This clearly demonstrated the massive impact on the ability of authorities to deliver services in areas of high population growth. The report identified Children's Services, Adult Social Services, Waste Management and Transport as the services most affected. It predicted a cumulative funding gap of up to £715m for the County Council between 2006 and 2021.
The Office for National Statistics (ONS) has just released revised 2004-based Sub-National Population Projections (SNPP). These use information from the period 1999-2004 to set assumptions about demographic change in future years. As such the projected population for the next CSR period and beyond will directly reflect the rate of population change between four and nine years earlier, but will not take account of the increasing rate of population growth expected as a result of the Government's growth agenda. The use of trend-based projections as the basis for funding settlements undermines the ability of local authorities in the major Growth Areas to deliver Government's growth policy in a sustainable way to the benefit of existing and new communities and is therefore inappropriate.
The use of historic data creates a time lag between costs being incurred and funding received, a position which is exaggerated by the use of base data which is not robust and therefore may result in funding never catching up. Northamptonshire is experiencing an unprecedented level of growth and it is already clear that its population will increase at a much higher rate than that experienced prior to 2004 in direct response to the Government's growth agenda.
Housing and Planning Delivery Grant (Chapter 2)
Additional recognition for performance in the Growth Areas through the new Housing and Planning Delivery (HPDG) system is welcome in principle. However, in the past under the Planning Delivery Grant system, the role of county councils in two-tier areas was not recognised in the allocation of funding. This needs to be addressed as we move into the new system and if delivery is not to be jeopardised.
In two tier areas, county councils provide a central role to the planning and delivery of growth especially in the Growth Areas where schools and transport infrastructure, and related planning activities, are crucial to the timely and sustainable growth. Complex planning proposals in two tier areas (and most of the delivery within the national Growth Areas whether MKSM, London-Stansted-Cambridge or Thames Gateway will be in two tier areas) require major input from county authorities in respect of transport, schools, waste management and other county services (such as the fire service). This includes highways development control S278 and S38 agreements and S106 agreements.
Moreover, the County Council has and continues to contribute significant resources to joint planning arrangements in both the north and west of the county, including providing strategic capacity and expertise, funding and financial administration. We have worked closely with local planning authorities and the LDVs to resolve blockages to housing delivery including identifying solutions to forward funding infrastructure such as in the case of the Corby Link Road dualling. The county council has also invested significant resources in work with NNDC and the Highways Agency to find a solution to the A14 capacity issues; and is working closely with the LDVs and LPAs to ensure our Transport Strategy for Growth supports core spatial strategy and town centre action plans for the area as these emerge. If counties are not geared up to deliver growth then it follows that there is a real risk that growth will be slowed, particularly in the current local government climate and the need to identify efficiency savings.
The role of county councils needs to be recognised with a more equitable allocation of HPDG to ensure their significant contribution towards planning and delivery continues. This could be through a standard percentage rate e.g. top slicing of countywide allocations. LABGI is an example of this approach being used where 30% of funds are directed to the county council. This would go some way to recognising the scale of the role and impact played by the principal authorities.
Improvements on the Delivery of Affordable Housing (Chapter 8)
Measures need to be taken to ensure that market-driven or public sector facilitated delivery of affordable housing actually secures the range of type, size and quantity of affordable housing required in the right places. Strategic Housing Market Assessments have an important role to play. To do so, they need to move from being an analysis of the current situation and future need to become more delivery and performance-focused with the HaCA and where they exist LDVs taking a lead role.
Increasing housing numbers is not a sufficient indictor that the system has delivered the right outcomes on affordable housing. The new PSA20 on housing needs to secure an increase in affordability. To do this there needs to be a substantial increase in the level of investment in affordable housing to tackle genuine housing need.
Government needs to ensure that HaCA will be adequately focused and resourced to support affordable housing delivery in the Growth Areas. This investment will be critical to the sustainable communities agenda. Performance management arrangements for the delivery of affordable housing, including maintenance matters, need to be strengthened. Robust and consistent information on affordable housing pipelines and completions would be helpful as records are generally patchy and base data varies. There is a clear role for the HaCA in ensuring that information is collected in a consistent way across the country.
There is also a clear case for a dedicated HaCA office for MKSM given the unique scale of the growth opportunity and challenge which exists and its cross-boundary nature.
The Cambridge Challenge is a pilot programme operated by the Housing Corporation which is trialling a different way of managing and delivering large strategic sites. The pilot has pre-selected a strategic development partner to deliver affordable housing on three strategic sites in Cambridge, namely Northstowe, Southern Fringe and North West Cambridge in advance of specific site details. The successful partner was chosen in advance of the 2008/09-2010/11 bidding round and has been given a five-year grant funding commitment.
This commitment to longer-term grant funding for an affordable housing programme over a number of specified sites should maximise the impact of Government funding programmes by securing an affordable housing development partner from site inception to completion, improving the efficiency of housing investment, raising design standards, and enhancing the delivery of affordable homes. The successful bidding partner demonstrated innovation and the commitment to developing community capacity, whilst improving on current levels of intervention. The potential exists to replicate this approach more widely across the Growth Areas.
Continued support for established LDVs (Chapter 12)
As the pace of delivery continues to step up across Northamptonshire and MKSM, the role of the LDVs will be fundamental to delivery performance, including their developing role as 'ringmasters', driving, coordinating and programming delivery and working with partners to secure investment. Their capacity and delivery expertise brings real value. The LDVs will need to work closely with the new Homes and Communities Agency (HaCA) and others to facilitate growth, regeneration and delivery. It will be important that their respective roles are clear.
It is also important that the likely designation of further new growth points does not lead to a plethora of new LDVs and in particular UDCs and URCs and resulting dilution of focus and resources. In most cases the scale of additional growth is relatively small and can be effectively managed through existing local authorities and more informal partnerships. Aylesbury, Ashford, Bedford and Cambridge all illustrate how effective these can be.
In this matter, the threat of dilution of both policy capacity at the centre and our attention to implementation, and the potential for resource and financial diffusion, represents a significant risk to the delivery of the Government's massive growth aspiration for the (nationally significant) major Growth Areas including Northamptonshire and MKSM.
2. Growth Areas need effective delivery, funding and management mechanisms
A Viable Alternative to Planning Gain Supplement (Chapter 5)
As CLG will be aware, the County Council replied to both the previous two consultations on the Planning Gain Supplement (PGS) and welcome this opportunity to continue to shape the future direction of infrastructure funding.
In the response submitted to CLG and HM Revenues & Customs in February 2007, the County Council outlined 10 tests or principles which are as important to the effectiveness of any form of planning obligations model. These are key measures of the effectiveness, workability and practicality of whatever system emerges following this consultation. These tests should provide a useful starting point for devising, shaping and testing any new approach to planning obligations.
The ten tests are:
n Accountability -local, strategic and to whom? n Transparency -crucial -public/private/local confidence n Certainty to investment - when, how, who decides n Enabling - incentives risk, e.g. (no) link to permission date? n Hypothecation - invest where gain generated n Added value - complements, not substitutes for mainstream funding n Efficiency of process - not added bureaucracy/costs n Fit with delivery levels/mechanisms - sub region/LDV n Clear prioritisation rule/evidence base: the business plan n Forward funding - banker arrangements for meeting the "timeliness gap"
The County Council's response below is made with these tests in mind. It is pleased to see that recent announcements in the Pre-Budget Report (9 October 2007) confirm the Government is no longer pursuing the PGS route as it is clear that this fails a number of these tests.
The new system for developer contributions / standard charge should meet all of the ten tests proposed by the County Council above. It should ensure that all development pays proportionately towards infrastructure and that banker mechanisms can be put in place where required to ensure that development is not frustrated due to lack of infrastructure delivery.
There should be a clear evidence base for developer contributions / standard charge, linked to a business plan which would identify infrastructure requirements to support planned growth, phasing, costs, delivery partners, and potential funding sources. These plans should be prepared at sub-regional / principal authority level to secure a systematic approach to infrastructure delivery planning. These should be prepared in parallel with the LDF as their infrastructure investment and delivery plan arm and updated regularly.
At the regional/sub-regional level, the new single Regional Strategy should set clear guidance on the scope of ('ingredients') and rule-base for a developer contributions / charging mechanism to ensure consistency, robustness and transparency. This would also significantly speed-up the process as it would avoid the need for protracted discussions and duplication on issues of principle at the local level[3].
The level of developer contributions / charges could be agreed at sub-regional/principal authority level through the business plan approach. The "ringmaster" and "banker" roles operating at the sub-regional/local level would be crucial. This approach would enable the local level to focus on the finer details through the Programme of Development and LDF process.
The presence of a clear and robust framework for developer contributions / charging should also be a criterion for receiving Housing and Planning Delivery Grant (HPDG). This would promote best practice and help to create the conditions for more effective and efficient delivery.
Front-funding of infrastructure / Banker Role (Chapter 5)
The availability of investment at an early stage to fund infrastructure necessary to release growth is a major barrier to early delivery of housing targets. Planning obligations secured through Section 106 may go some way to covering infrastructure costs, along with other public sector investment, but these contributions are often not released until the development is well underway.
The Housing Green Paper concentrates on PGS and Section 106 issues but is relatively quiet about front funding of infrastructure. This is a key issue, particularly in the Growth Areas.
English Partnerships has already demonstrated its ability to deliver mechanisms to front fund infrastructure such as the Bedford Western Bypass where risk was shared with Bedfordshire County Council, and banker arrangements have also been established to support growth in Milton Keynes involving the LDV (Milton Keynes Partnership) and Milton Keynes Council.
It will be critical for the timely delivery of growth that Government and its key agencies, including EP/HaCA and the RDAs, work with the LDVs and local authorities to secure innovative and workable solutions to the front funding of infrastructure. Arguably this should be a top priority for HaCA. This is an area we would be keen to explore further.
Indeed, the County Council is already investigating possible solutions to the front funding of infrastructure, including testing 'banker' mechanisms which draw on the Authority's prudential borrowing powers and where risks can be shared with a third party.
3. Greater autonomy for investment management and strengthened delivery arrangements at sub-regional / principal authority level will be critical to effective delivery
Moving to a Single Regional Strategy (Chapter 2)
Proposals set out in the Sub-National Review (SNR) announcing the introduction of single regional strategies is welcomed in terms of streamlining processes and ensuring better coordination of economic, spatial and transport policy at the regional level. However, neither the SNR nor the Housing Green Paper state that the Regional Housing Strategy will be part of the single Regional Strategy. This needs to be the case. It will also be important to ensure that the new RDAs secure the right skills and expertise to be able to deliver their much wider programme of responsibilities under new arrangements.
It is welcome to see that local authorities will be expected to play a key role in proposing the vision for their area and in drawing up proposals to feed into the regional strategy, drawing upon the Sustainable Community Strategy in doing so. This is clearly a role which should be managed at principal authority / sub-regional level to secure strategic policy and capacity, and delivery expertise. A principal authority led approach would also help to ensure links to performance and delivery mechanisms such as the LAA and MAAs.
The Green Paper states that Government will be consulting on working arrangements to manage the endorsement of the single regional strategy by local authority leaders. This is welcomed and should provide for greater democratic accountability. However, the process must not be overly bureaucratic or complex. It must be efficient and robust and make for sound, stream-lined and 'fit for purpose' decision-making. As you will be aware, the East Midlands principal authorities (the 5 counties and 3 unitaries) are proposing to GOEM and emda a clear and strategic regional leadership model that we believe fully meets these criteria.
The introduction of the single Regional strategy needs to recognise and manage cross boundary policy and delivery issues. Northamptonshire position in the MKSM growth area which crosses three regional boundaries is a case in point. Robust arrangements are in place under the MKSM Inter-Regional Board (IRB) to manage growth. Regional and sub-region partners play a strong role in delivery. The preparation of the MKSM Sub-Regional Strategy (SRS) is an excellent example of cross-boundary working where the three Regional Assemblies retained executive responsibility for the Strategy but commissioned a principal authority to coordinate and lead on its preparation, working closely with the other principal authorities. The SRS was also integrated into the respective Regional Spatial Strategies for the South East, East of England and East Midlands but retained as a separate SRS.
Mechanisms need to be considered and agreed to retain and review the MKSM Sub-Regional Strategy to address strategic, cross-boundary growth issues in a joined-up, coherent and robust way whilst ensuring that this remains an integral part and within the framework of the respective regional strategies. Arrangements will need to be agreed by the respective Regional Planning Bodies, working closely with the principal authorities.
As single Regional Strategies are introduced, there needs to be clear and robust mechanisms for better aligning funding to policy / strategy, including the expanded Regional Funding Allocations (RFA), RDA programmes and the regional investment plans of the HaCA. The importance of sub-regions as the optimum level for delivery needs to be recognised and proposals in the SNR which point to greater delegation of RDA funding to sub-regions where appropriate governance arrangements are in place are welcomed. This has been underlined in the 2007 Pre-Budget Report (D19.9) which states that RDAs should give far greater autonomy to local authorities and sub-regions in the allocation and management of spending.
The Northamptonshire growth area is well positioned to maximise its delivery offer in this context, including through Northamptonshire Enterprise Ltd (NEL). NEL was established in 2006 and brought together Invest Northamptonshire, Explore Northamptonshire, Northamptonshire Partnership (the sub-regional arm of emda) and the Observatory along with the County Council's economic development function. NELs business plan is clearly linked to the economic arm of the LAA ensuring that priorities are aligned. Both of the LDVs in Northamptonshire are partners in the LAA. They are also both represented on NEL at Board level.
The County Council is also supportive of the MAA concept as a performance framework and contract to secure buy in from Government and other delivery partners on key shared economic growth objectives, including transport and housing. The County Council and MKSM were promoters of this in their responses to the CSR07 last year. The SNR adds further weight to the concept. MKSM is clearly a sub-region where governance mechanisms are in place. The MAA philosophy is already been applied in MKSM and the new Government proposals provide an opportunity to formalise this. One potential area is transport linked to economic-related outcomes and performance. The recently established Strategic Transport Board (STB) is leading work on prioritisation of transport interventions to drive and support economic growth. This will provide an evidence base for the next RFA round. The MAA would provide the performance framework and contract to secure buy in from Government and delivery partners on key shared transport objectives to deliver growth. This is an area that the County Council will be discussing further with MKSM partners and will wish to explore further with Government in the coming months.
Local Authority Leadership on Infrastructure Delivery (Chapter 5)
The County Council welcomes the Government's commitment to a strong leadership role for local authorities on infrastructure delivery. In the Growth Areas, local authorities will need to work closely with the LDVs. However, the current proposal for this to be led at local planning authority level could result in duplication, fragmentation, inefficiency and ineffectiveness as it is one-step removed from the principal delivery level. In two-tier areas such as Northamptonshire lead responsibility for coordinating and driving forward delivery, working in partnership with providers, should be at sub-regional / principal authority level so that clear links can be made with the LAA (or MAAs), the Sustainable Community Strategy and the 'business plan' approach. This would help to secure buy-in from key delivery agencies through the LAA duty to cooperate whilst investment priorities can be identified through the business plan. Principal authorities are responsible for the delivery of major and costly infrastructure such as roads, schools and waste management facilities and their capital programme decisions are critical to securing sustainable growth and sustainable well functioning communities. This is also the delivery level for health, emergency and many other services. It is good to see that the HaCA will be a key partner in LAAs and MAAs. However, local authority leadership will also need to secure commitment from other key providers such as the Highways Agency, Environment Agency and RDAs.
4. Enhanced performance management and delivery frameworks should secure join up of national, regional/ sub-regional objectives and delivery agency buy-in. Case study evidence from the Growth Areas should inform performance reviews
Cross-Departmental Commitment to Housing Growth (Chapters 5 & 12)
The County Council welcomes the introduction of a cross government performance framework to ensure that the key infrastructure departments prioritise housing growth and its implications. This was one of the main recommendations promoted in the County Council's response and the cross-partner MKSM submission to CSR07. The proposed joint PSA led by CLG is a positive initiative and this should be clearly linked to MAA and LAA priorities and delivery at the sub-regional and local levels. Clearly agencies such as the HaCA, RDAs, Highways Agency, Environment Agency etc need to be drawn into these agreements to ensure that their investment programmes are effectively targeted and aligned particularly in the Growth Areas. Proposed delivery plans at departmental level should also provide clarity to delivery partners at all levels.
CLG is aware of the sound arrangements in place to manage growth in MKSM through its partnership based Inter-Regional Board (IRB), chaired by the Minister, and the recently established Strategic Transport Board. A senior level Director for MKSM is also shortly to be appointed to strengthen sub-regional leadership and capacity still further. A single Annual Monitoring Report (AMR) for the MKSM Sub-Regional Strategy is prepared on behalf of the three Regional Assemblies. The IRB has adopted an AMR Action Plan to focus the LDVs and other delivery partners on the key areas of activity necessary to support growth delivery across the sub-region. The Action Plan is a key performance monitoring and risk management tool with progress reported to each IRB meeting and actions agreed.
MKSM is providing for the highest level of growth of any of the growth areas and Northamptonshire is accommodating around 50% of this. The Growth Area could provide a good test bed for assessing the effectiveness of the joint housing PSA and delivery plan approach in due course. Indeed, through case studies or other mechanisms, Northamptonshire and MKSM could make a valuable contribution to the Government's performance management and monitoring arrangements and help to identify co-ordination and delivery problems and develop practical and workable solutions.
The County Council has already provided strong evidence for CSR07 and the cross cutting review of infrastructure to support housing growth, including work with NNDC and other partners to present a North Northamptonshire case study on transport and community infrastructure, including schools (August 2006). This could be a useful basis for further evidence based and solution focused infrastructure and performance reviews. Indeed, the County Council as a key player in MKSM could provide a valuable role supporting the proposed three month cross Whitehall reviews on infrastructure and housing growth. Input could be co-ordinated by the new senior Director for the MKSM sub-region. This would strengthen the link with delivery in the Growth Areas.
Schools Development to Support Housing Growth (Chapter 5)
Northamptonshire County Council needs to develop and support an ambitious school building programme to meet growth demands. This includes delivering over 20 new schools and a number of extensions to existing schools to accommodate growth planned in the north of the county to 2021. In the west, the Northampton Schools Review alone affects building and refurbishment of 41 schools including 11 new or mainly new rebuilds. Good school provision is a key 'pull factor' attracting people (and businesses) to move to an area and is a key element in helping to create sustainable communities.
In recent years the cost of building schools has increased substantially above inflation. Funding realised from planning obligations and the County Council's capital programme has been insufficient to meet these costs, meaning difficult decisions have had to be made. This is a real risk to the timely delivery of schools and one which is significant in Northamptonshire due to the level of growth being accommodated. There are a number of reasons for this.
The current reality is that despite having an up to date and robustly evidenced supplementary planning guidance document covering contributions to schools from new development, not a single school has been funded entirely from S106. Indeed despite this evidence base, the County Council very seldom receives any contributions towards secondary schools other than securing land e.g. East of Wellingborough (WEAST). A notable exception to this is Priors Hall at Corby (over 5,000 new homes in a mixed use urban extension) where the County Council secured a contribution towards the capital costs of building the school, albeit that this falls far short of the total construction costs.
Furthermore, Section 106 Agreements are often concluded before design standards for developments are agreed and there is the expectation that schools should be landmark buildings. Meeting these requirements adds to the capital costs of schools provision. For example it is estimated that the additional cost of 'green' design at the recent primary school development at Upton has increased costs by over £215,000. The County Council's capital programme allocation ring-fenced for schools falls far short of being able to cover the funding gap, particularly when looking at timely/early delivery of schools infrastructure and meeting high quality and eco design standards.
In addition to this, resources are being further stretched by the decision of DCSF not to update the 2006/07 capital cost multipliers for 2007/08. The County Council's education planning obligations policy is based on DfES cost multipliers. We assessed the impact of this on primary school places looking at the cost differential between 2006/07 DCSF cost multipliers and Building Cost Information Service (BCIS) multipliers for the same year. We would have to rely on BCIS to uplift our cost multipliers for 2007/08 if DCSF do not update theirs. Our assessment shows that we would lose around £1,800 per primary school place as a result of this alone.
DCFS Cost Multipliers - West Northamptonshire Example
The Capital Programme funds are also under heavy demand to cover improvements to the condition and suitability of existing buildings and buildings which are no longer fit for purpose. Ensuring that existing schools are maintained, not least those on the edge of major sites where new schools will be provided (and hence the contrast between new and 'old' is more stark and a key deciding factor for parental choice). Ideally the County Council would like to be refurbishing or replacing schools in an area at the same time (or before) opening a new school to maintain parity of provision and help allay fears about the impact of new schools. The Building Schools for the Future and Primary Capital programmes will not deliver investment at an early enough stage to meet growth challenges and with these demands there is simply not enough funding in the pot. Reference in the Housing Green Paper to DCSF considering how BSF could better address the pressure of housing growth is welcome. This could be an early focus for the CLG three monthly Whitehall reviews on infrastructure and housing growth. The County Council would be pleased to provide case study evidence to support this.
Although the funding formula for schools does take account of pupil roll numbers (and the recent commitment from Government that the most up to date pupil numbers will be used), the overall settlement is still not compensating for growth. One reason for this is that roll numbers are falling in some parts of the county which offsets pupil growth figures elsewhere and dampens the settlement allocation figures. Surplus places are not in the right place (i.e. often in rural areas) to provide for the high growth communities. It would not be practical or sustainable to transport school pupils long distances. In addition, the DCSF expectation is that any school places funded by S106 contributions are deducted from their formula.
The council is fully supportive of the need for schools to be designed to the highest standards, be environmentally sustainable and provide exceptional assets for the whole community through the extended schools agenda and multi-use buildings concept. However, delivering Government policy through higher design specifications and securing exemplar development increases development costs for the authority (as demonstrated by the Upton Primary School example above) and this also needs to be recognised.
Despite significant pressures on public capital funding e.g. for schools, transport and waste, all of which are under pressure to support growth sustainably, the County Council has been able to absorb some of these additional costs for schools provision up until now because it has only been opening 1 new school every year or two. However, Northamptonshire is accommodating an unprecedented level of growth which is already being realised. As a consequence, the County Council is likely to be opening 1-2 schools a year in the north of the county and more in west to meet growth demands, which will be more difficult to do without cutting back capital schemes at other schools. Additional capital funding is needed to help meet these additional costs.
The Housing Green Paper refers to initiatives by DCSF to support growth. Whilst the principle of additional grants to those authorities who experience exceptional in year growth is welcomed, its effectiveness will depend on the details of how the grant will work. For example, a recent DCSF consultation suggested a 2.5% threshold. In the case of Northamptonshire, with a county roll of around 100,000, this would mean that to gain from additional funds, pupil rolls would have to increase by more than 2,500 between January and September which is still unlikely to happen in a year of exceptional housing growth.
In addition, in many cases, there are a number of options for meeting growth. Funding for feasibility studies and preparation work would be welcome to help plan the most appropriate and cost-effective provision. This could also enable the authority to be pro-active in finding innovative solutions. Such funding would help to meet the needs of the new communities, as well as exploring opportunities for extended services which schools and other community buildings could provide and put forward innovative building designs that provide eco-friendly schools. It would also assist Section 106 negotiations by providing a more robust evidence base for the council's case for funding.
Capital investment in addition to the County Council's capital programme for schools and S106 will be crucial to securing timely delivery of quality schools infrastructure in the Northamptonshire growth areas in a number of cases, unless funding from the Department for Children, Schools and Families and/or Communities and Local Government can address the shortfall through mechanisms which are responsive to the unique situation in the growth areas. The County Council would welcome the support of CLG to secure improved resources in response to such demands, particularly through the proposed joint PSA on housing growth and appropriate growth funding.
Transport (Chapter 5)
The Housing Green Paper refers to initiatives to be taken forward by DfT to support the housing growth agenda. The new approach to appraisal system to be used to prioritise transport funding due in 2008 must recognise the wider economic benefits of growth as well as the direct and indirect impact on the release of housing as a result of transport investment, including demand management and modal shift measures.
Further work by DfT and CLG to explore how soft demand management measures can be better implemented in the developing plans for the New Growth Points is also relevant for the Growth Areas and eco-towns initiative. Such measures should be promoted through the new CIF programme.
One of the significant 'show slowers' for the delivery of transport infrastructure necessary to release housing growth is the lack of resources by highways authorities to undertake modelling, design and preparation works necessary to bring schemes forward to planning application and delivery stage. The costs can be substantial and in the Growth Areas where numerous transport solutions need to be delivered to secure the release of housing in any one year, the growth programme will be affected where schemes are not in the pipeline and limited resources for design and preparation work are gone. Proposals for CIF and other mainstream funding for transport need to ensure that allocations allow for this and do not strangle progress.
Need for Investment in Strong Local Economies (Chapter 1)
The Housing Green Paper concentrates very much on the need to increase housing numbers. However, housing growth needs to meet wider regeneration, community and sustainability objectives and should not be seen purely as a numbers exercise. Housing growth should deliver balanced communities and mixed-use development. This will help to create the right conditions to generate and sustain growth.
The Green Paper fails to recognise the importance of a strong local economy to ensure that there is a robust housing market capable of delivering housing growth. This is particularly important in weaker housing market areas. A strong local economy can be a catalyst to release an areas growth potential and is vital to provide local job opportunities, to give more confidence to private sector investors, and to deliver more sustainable development where residents do not need to commute long distances to work.
Investment in town centre regeneration in terms of jobs, homes, community facilities, retail offer and urban fabric/public realm, can deliver a wider community offer which can help to invigorate a healthy housing market by enhancing the areas offer to prospective homebuyers.
Regional Funding Allocations (SNR Chapter 6)
The expanded Regional Funding Allocations (RFA) initiative announced in the SNR is supported. This should recognise and support the significant contribution of the Growth Areas to the UK economy and the delivery of the Government's housing delivery aspirations in the short, medium and long terms. It is also important that the mechanisms are put in place to ensure the new and expanded round of RFA is genuinely cross-cutting and outcome/performance focused.
The RFA also needs to recognise the inter-regional dimension where economic sub-regions such as MKSM cross regional boundaries. Under the first round, the three MKSM regional assemblies worked with principal authorities and others such as the Highways Agency, to identify priorities and "growth proof" the respective RFA processes at the regional level. Consideration of the pan-regional MKSM growth area priorities and housing growth more generally needs to be an integral part of the development of RFA2.
5. Sustainable growth, including higher quality and eco-design, needs to be secured through effective planning
Delivering through the Planning System - Eco Towns and New Growth Points (Chapter 1)
Revised housing figures for the principal Growth Areas in the period up to 2026 are coming forward through (mini) reviews of the Regional Spatial Strategies i.e. as part of a robust and sound planning strategy. It is important that proposals for New Growth Points and Eco-Towns also come forward in a transparent and tested way and which enables community participation and understanding.
Major urban extensions in the growth areas, many of which are on a scale comparable to the proposed eco-towns, should be considered by Government for eco-town status. This provides a real opportunity for Government to achieve its target of seeing 5 eco-town schemes start within 2 years, particularly if Government is to properly (and quite rightly) assess eco-town proposals through the planning system (as stated HGP page 31). The principle of development will already be established for these sites but planning obligations, masterplanning, design codes etc could still be shaped to meet eco-town objectives and outputs.
Raising Design Quality (Chapter 6 & 7)
The County Council welcomes the increased emphasis on well-designed homes and places and in particular, green or 'eco' design measures. The Eco-Town proposals should help to raise the game further. However, local planning authorities must be supported by the Planning Inspectorate in their drive to enhance design quality in line with Government policy.
The ability to raise design standards could be strengthened by formalising existing mechanisms e.g. a rising minimum Building for Life standard could be made mandatory. The Green Paper also proposes mandatory assessment against the Code for Sustainable Homes which is also supported although it would be helpful to know when this is likely to become mandatory and how it will be monitored and measured when it does. These measures would assist local authorities in refusing badly designed schemes and complement any measures to improve housing quality that may emerge from the Office of Fair Trading review into house building. The development of robust metrics for local authorities to help measure quality as part of their monitoring processes is supported. Moreover, the proposal to develop an agreed design quality assurance scheme that could provide a meaningful concession for those who meet the benchmark would be a good incentive scheme for raising standards. These are all schemes which could add value to people's homes and would be something people recognise.
LDF Test of Soundness (Chapter 5)
The County Council has some concerns regarding the proposal that the Planning Inspectorate should consider the demonstration of infrastructure availability and planning as part of the test of soundness of a development plan document. It is unclear what Government means by 'availability' and over what period of the plan. Securing infrastructure funding particularly in the medium to longer term can be uncertain, particularly as Government funding only looks 2-3 years ahead. The criteria for this test needs clarification.
As a result, there are still some difficulties in securing commitment from delivery agencies (e.g. Environment Agency, Highways Agency) through their investment programmes to prioritise resources to support the delivery of growth. This could lead to one of two things happening to LDFs if the demonstration of infrastructure availability is introduced to the test of soundness: they are either found un-sound and are sent back for re-consideration which will lengthen the process; or the threat of unsoundness leads to authorities underplaying infrastructure needs and requirements, or going for cheap quick fix solutions, just to get their plans through. This would undermine the principle of creating sustainable communities.
Programmes of Development (PoDs) should be developed alongside the LDF as the delivery programme for the spatial strategy. It should provide an assessment of delivery risks associated with the infrastructure programme to support the proposed phasing of the strategy and this delivery risk assessment should be a matter of consideration for the Planning Inspectorate.
Joint Planning (Chapter 5)
The County Council is a strong advocate of joint planning. The benefits of joint working on LDF development is evident in North Northamptonshire where the Joint Planning Committee and its Joint Planning Unit (hosted by NNDC) is operating well. The public examination on the joint Core Spatial Strategy commences later this month. However, joint planning arrangements do not always come forward so smoothly. Where joint planning for a wider area clearly makes more sense in planning strategy terms, Government Offices should give much firmer direction to proceed under joint planning arrangements to ensure that no momentum is lost in the plan making programme. A clear steer and strong guidance from Government would ensure that early progress can be made.
Development Control Measures to Ensure Build Out of Sites (Chapter 12)
Further measures through the development control process are required by Government to incentivise developers to build out major housing development sites more quickly. This includes making the definition of commencement of development more rigorous. The proposal that this might include requiring more substantial development of the infrastructure for the site is supported. Developers can frustrate progress on town centre regeneration and meeting housing trajectory targets by not progressing key sites once the minimum requirement to secure a commencement order has been fulfilled. This also causes problems for the phasing and programming of key infrastructure delivery where planning obligations are making a significant contribution to costs but contributions are not triggered until a certain stage of build out has been reached.
Built Environment Professionals - Still A Skills Gap (Chapter 11)
Measures need to continue to enhance skills and capacity in the built environment professional sector, although the increase in graduates is a positive sign. However, there are still acute shortages at the experienced principal/senior level and Government should consider initiatives to encourage experienced officers to stay in the profession. This is equally likely to incentivise graduates.
Use of Public Sector Land (Chapter 3)
Initiatives to increase the contribution which surplus public sector land can make to increasing housing supply is welcomed, including the extension of the Register of Public Sector Land and the proposed Surplus Public Sector Land Taskforce and delivery Unit. However, this needs to come forward and be tested through the planning system to ensure that housing is being delivered sustainably and in the right location.
The ability to include land owned by Network Rail and other strategic/national interest landowners needs to be considered, or at least mechanisms to encourage the company to release at an early stage its sites that offer prime development opportunities where this supports sub-regional / local spatial and investment strategies, particularly in the Growth Areas. Network Rail needs to work with LDVs and local authorities more positively to bring these sites forward.
Further discussion
I hope you will find these comments helpful and constructive. I would welcome an opportunity to discuss these further with the Green Paper team, including the opportunity to contribute to the PSA development and monitoring and review mechanisms referred to above.
January 2008 [1] North Northants Development Company - an Urban Regeneration Company [2] West Northamptonshire Development Corporation - an Urban Development Corporation [3] Please note: this is not intended to mean that contributions / charges are collected or distributed at regional level which was a major weakness in the PGS proposals.
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