Letter from Chief Planner, Department
of Communities and Local Government
PLANNING FOR
HOUSING AND
ECONOMIC RECOVERY
I am writing to outline what we are doing to
help planning authorities to respond to the downturn and, in particular,
to ensure that planning is in a position to deliver when the upturn
in the economy happens. This letter sets out a range of measures
building on the housing stimulus package announced in the Budget.
We need to ensure that planning complements that package to continually
respond to economic and market circumstances.
It will come as no surprise in that context
that the Government attaches particular importance to the identification
of a good supply of land for housing. Planning Policy Statement
3 was published in November 2006 as a direct response to the Barker
review, which drew attention to the problems created by not having
enough suitable land on which to build the houses necessary for
a growing population. Now is the time to ensure that land supply
is in place so that we can deliver more housing as industry returns
to health. Continued effort to re-profile schemes as well as getting
sound plans in place will help create the conditions to attract
capital investment and allow local authorities to guide and steer
investment in ways that the community wants.
HOUSING AND
PLANNING AND
DELIVERY GRANT
AND LAND
SUPPLY
We are today launching a consultation on revisions
to Housing and Planning Delivery Grant (HPDG), ensuring that it
continues to provide the strongest possible incentive to local
authorities in significantly changed circumstances. Details can
be found at: http://www.communities.gov.uk/planningandbuilding/planning
The consultation reflects the fact that a necessary
condition to facilitate a speedy recovery of the housing market,
when demand starts to pick up, will be the availability of sufficient,
suitable land for development. A key issue is how to ensure that
the supply of land for housing is deliverable. Effectively this
means two things: firstly, reviewing existing sites to judge whether
there are actions that can be taken to unlock sites and allow
development to go ahead, and secondly looking carefully with the
development industry at all new opportunities.
Paragraphs 28-38 of the consultation document set
out our approach on land supply, with paragraphs 30-31 referring
particularly to the issue of the deliverability of sites.
In year three of HPDG we propose that grant
will only be available for a completed SHLAA with a five year
supply of deliverable sites in place and with evidence of active
involvement of a partnership. There will also be a bonus for the
completion of an implementation strategy in line with paragraph
62 of PPS3 that sets out how LPAs will plan for different scenarios,
and bring forward land into their five year supply if housing
delivery does not occur at the rate expected. Ideally this would
be contained within the LDF but this requirement should not delay
plan making. A sensible approach would therefore be to consider
the requirements in PPS3 and clearly set out what this means for
the authority. This can then be updated and reviewed, and form
part of the LDF when the opportunity arises—for example
as part of the core strategy.
We propose that these steps are underpinned
by comprehensive checks. From the selective checks we have carried
out in year one, it is clear that there is still some way to go
to ensuring that there are robust assessments of land supply that
users of the planning system can be confident in.
We do, however, recognise the pressures facing
planners and developers to ensure that the supply of land for
housing identified in more economically buoyant times is reviewed
and effectively managed in the light of the downturn. In recognition
of this, for year 2 and for work undertaken up to March 2009,
we will continue to reward authorities who can clearly demonstrate
a five year supply of land for housing. There will be extra incentives
for the publication of a SHLAA, and a bonus if this has been drawn
together with the help of a housing market partnership.
We have also today published a best practice
report prepared on the basis of selective checks of five year
land supply assessments following payments of HPDG in year one.
I would recommend that you read Land Supply Assessment Checks
a copy of which can be found on our website at: http://www.communities.gov.uk/planningandbuilding/planning/planningforhousing/
In particular, authorities will want to have
regard to the findings on establishing the deliverability of sites
in Chapter 6 of the report. Chapter 7 outlines key conclusions
and suggested best practice, with specific examples given in appendix
5. We are grateful to those of you who co-operated with the checks
and propose to carry our further checks in year two of the grant
with the aim of providing further advice and guidance.
PLANNING PERMISSIONS
One impact of the current uncertain economic
conditions is that some developers are experiencing problems bringing
schemes forward within the standard three-year permission period.
We are aware of the concerns that this is causing both to local
planning authorities and developers.
I recently wrote to remind you that you can
use existing powers under section 91 of the 1990 Town and Country
Planning to grant five rather than three year consents where appropriate
in order to help bring forward development. In current conditions,
local planning authorities may wish to consider the advisability,
in individual cases, of granting permissions with a longer duration.
We are also considering the possibility of allowing
the extension of existing permissions beyond the standard three-year
period, and how this might work in practice. We will be consulting
shortly.
SECTION 106 AND
VIABILITY
Now more than ever it is important to help authorities
to ensure existing planning permissions are built out. Ultimately,
section 106 agreements are contractual agreements between developers
and local authorities to deliver what is necessary to make a development
acceptable in order to obtain planning consent. Where they are
asked to do so, local planning authorities should be carefully
reviewing whether obligations are agreed through section 106 accord
with the five principles set out in B5 of planning circular 05/05.
— We also announced in our response
to the Killian Pretty Review that we are undertaking a work programme
to maximise the effectiveness of section 106 planning obligation
negotiations by sharing knowledge and best practice. This includes:
— Work with the Law Society to update
our model agreement for planning obligations to assist in providing
standard terms to be used by local authorities to speed up negotiation
and drafting of section 106 agreements where possible.
— Facilitating the development of regional
section 106 practitioners groups to assist in sharing of knowledge
and best practice among local authority practitioners. This will
seek to provide support for practitioners to deal with the current
economic conditions.
— Working with the Homes and Communities
Agency to explore the development of a toolkit for use by local
planning authorities to predict the affordable housing contribution
that can be supported through section 106 in a local authority
or housing market area.
— Conducting new research, undertaken
by the University of Sheffield and the University of Cambridge,
to study the use and value of planning obligations in 2007-08
(the latest year for complete data)—to provide a better
understanding of the use, effectiveness and general practice on
the ground. Survey work is currently in the field and we would
encourage any authority yet to respond to reply to the research
team. Furthermore, we confirmed in the Budget that the Community
Infrastructure Levy (CIL) regulations will come into effect on
the Common Commencement Date of 6 April 2010.
NEXT STEPS
It is important that planning is in a position
to help deliver when the upturn in the economy happens. This means
making sure enough land is available for housing and economic
development and that planning permissions are in the "pipeline"
and can be implemented. We are working across the sector to assist,
give advice and when appropriate support changes to planning system
to this end.
12 May 2009
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