Examination of Witnesses (Questions 168-217)
Q168 Chair: Welcome
to this evidence session on the abolition of regional spatial
strategies. For the sake of our records, could you identify who
you are and the organisations you represent?
John Acres: Good
afternoon. My name is John Acres. I work for Catesby Property
Group, but I am also President of the Planning and Development
Association and, for my sins, I am also involved in the Royal
Town Planning Institute in the West Midlands.
Roy Donson: My
name is Roy Donson. I am Regional Planning and Strategic Land
Director for Barratt Homes.
Andrew Whitaker:
I am Andrew Whitaker and I am Planning Director for the Home Builders
Federation.
Q169 Chair: Thank
you very much indeed. Thank you for the evidence that you have
already submitted to us in writing. One of the things that has
become fairly clear from the evidence from you and others, and
the oral evidence to date, is that, whatever people think about
the abolition of the regional spatial strategies, there are some
concerns that the void left has not been filled with guidance
or anything, and local authorities and developers have been left
to sort it out as they go along. Is that one of your particular
concerns, and what do you think the Government ought to do about
it?
John Acres: I believe
it is. There is a void that has almost created a paralysis in
the planning system both in the public sector, where many people
have stopped preparing their plans until the advice is clearer,
and also in the private sector, which obviously needs confidence
to invest. Effectively, they have waited to see what new guidance
is to emerge, so I think it is very unfortunate. The past three
months have been almost a question of treading water to see what
happens next.
Andrew Whitaker:
I think that has been our biggest problem so far, in terms of
how long such paralysis will last. The Government are very clear
that they do not consider that they need to issue further guidance,
and I think that both local authorities and the development industry
would quite like them to do so because they need to be very clear
about what the new process will involve. We do not have a lot
of that detail. We are constantly told that the detail will be
coming along, and we get announcements in various documentation,
which is all very useful, and points us towards an endgame; unfortunately,
we think that endgame is some way off. As John has said, we are
faced with a void in a large number of local authority areas.
I do not want to give the impression that every single local
authority is struck by this paralysis; some just say, "Well,
it's just business as usual. We will carry on; we have a strategy
for development. We want to continue to bring development forward
under that strategy. It hasn't made any difference to us."
There are some other places where that is not the case at all.
Roy Donson: We
also face the issue of how long this situation will continue.
In certain places, local authorities have said they are waiting
for further guidance. That further guidance really will not be
available until April 2012 if the programme to produce the national
planning framework is adhered to. If local authorities gear up
to produce their plans as a consequence you can imagine that we'll
be in this uncertain situation for approximately four years, and
that is not a good situation.
Q170 George Freeman:
Given that the Government have made it very clear that the purpose
of these reforms is to increase the rate of house building by
creating a framework of incentives and more control locally, first
can I ask you as three parties who have an interest in seeing
that happen whether you think that, over the next five years,
that will be the case and more houses will be built under this
framework? Secondly, what is it that you need to see clarified
by either central or local Government to allow that to happen?
Roy Donson: I think
the answer to the first question is: more than what? If you mean
"more than was built last year", that is not a very
great number.
Q171 George Freeman:
More than the rate over the past 10 years?
Roy Donson: More
than the average over the past 10 years? Will that actually happen?
That will depend upon several factors, not least the economy.
The present holding back of house building is probably due more
to mortgage availability than actual planning as such, but in
what you might call the medium term—the four-year period
I was talking about—certainly planning must be much more
certain than it is at present. Planning is a lagged process;
you do not get the end results for several years both because
of the timescale taken to obtain a planning consent and the actual
delivery on the ground. You will not see numbers coming through
for several years under a new regime, even if that new regime
was fixed tomorrow.
Q172 George Freeman:
Your projection is that over the next four to five years, given
the lags in the process, there is likely to be something of a
downturn or hiatus?
Roy Donson: There
is a possibility of that but it can be solved. I submitted in
my evidence three particular areas where I thought there were
holes in the transitional arrangements as they stand. I think
the Government need to produce much clearer transitional arrangements.
They promised that in Open Source Planning and we would
like to see it.
Q173 Chair: Can
you tell us what those three specific examples are, very briefly?
Roy Donson: Yes.
I said that if housing numbers are re-determined by a local authority
in advance of a new plan being formally deposited, what is the
evidence base on which that decision is made, and how is that
judged to be sound? If a local authority can now say that it
will not go with that housing number but with another one—option
one or whatever it is—on what basis is that judged to be
sound, and how is that tested? If reliance is placed on old-style
development plans, which is the default position of the transitional
arrangements, and on safe policies that are clearly out of date,
is that a reasonable position to be in, because a lot of the evidence
that informed those plans is 10 to 15 years old? If housing numbers
are redetermined by a local authority in advance of a new
plan being formally deposited does the calculated five-year land
supply start from the time when the new number is brought forward,
or is it re-determined over a period looking backwards?
Andrew Whitaker:
I think that is one of the key points for us. We were very pleased
when the five-year land supply was reintroduced because it meant
we could look forward rather than just back to completions over
the past year. By time you collected those data, they were perhaps
another six months out of date. Therefore, with the five-year
land supply came the requirement for local authorities to do a
trajectory plan that was a year-on-year assessment of how many
dwellings would be completed in their areas, on what sites and
how they would come forward. You could monitor that as you were
going through the year to say, "Well, this site has stalled
for all sorts of reasons." As Roy has said, the driver for
how sites come forward for development is a long process, and
there are lots of different things that can go wrong in bringing
forward a site. Therefore, having a trajectory plan means that
you can be very proactive in asking, "Why is this site not
coming forward? What has happened to it? What can we, as a local
planning authority, or a developer or investor, do in order to
ensure we will meet whatever target we say we will meet, whether
it is the regional strategy or locally produced target?"
Q174 George Freeman:
Do you envisage over the next five years a higher or lower rate
of growth than in the past 10?
Andrew Whitaker:
I am afraid I do not have the evidence to give you that figure.
We have not seen very many of these trajectory plans done, so
I do not have the data.
Q175 Simon Danczuk: What
is the long-term impact of abolishing the regional spatial strategies?
I know you have mentioned the economy but regulation is also
important.
Roy Donson: I suppose
it depends on how you define "long term".
Q176 Simon Danczuk:
Fifteen, 20 years?
Roy Donson: Gosh!
That is pretty difficult to forecast. You almost have to answer
that with "don't know" because the Government have set
so much store by the effect of the New Homes Bonus as part of
the package. That is a completely novel approach, and we cannot
put our hands on our hearts and be certain it works. I am absolutely
certain in my own mind that Ministers are sincere about their
desire for more housing and that they believe the New Homes Bonus-type
structure will work, but it is quite a high-risk strategy because
nothing like that has ever been tried before. I think there must
be a plan B, and probably that plan is that if the New Homes Bonus
as currently outlined—we do not have much detail on it at
the moment—does not do the trick something must be added
to it to make it work and we must keep at it until it does. I
suppose that in the medium term there is a wee problem about money
and about how that resource is made available.
Andrew Whitaker:
One of the benefits of regional strategies was that they were
long-term documents; they looked forward over a 20-year period,
so you could change whether an area was a growth area or a regeneration
area; you had a long-term vision for it. I think the threat of
localism is that people do not look forward very far. Everybody
does it; you do not even know where you are going on holiday next
year, let alone how you will plan for your area for the next 20
years. That was what strategic planning was about; it was to
take a long-term view. I think that will be quite difficult.
Overall, I think the development industry will thrive under any
form of planning system because it has to. Either we build houses,
in which case we have a vibrant house building sector, or we all
go under and do not build any houses at all. As a country, that
is inconceivable. All we want is clear sets of rules. Our problem
at the moment is that we cannot see this long-term vision and
clear rules for an industry that invests millions of pounds in
long-term strategies and delivery. As Roy has pointed out, development
is not like a water tap; you do not turn it on and off; you have
to do a lot of work upfront that takes years and years and costs
a lot of money, and it is the threat to that investment that we
are quite worried about.
John Acres: I think
there is a common misconception that regional spatial strategies
were simply top-down documents. My experience, having worked
with probably most of them in my career, is that they are bottom-up
documents prepared by the constituent local authorities to build
up a set of planning policies for a region. My view is that without
that you would have to reinvent it. What worries me is that we
are not putting anything in its place; there is a yawning gap
between the national planning strategy, which I think is long
overdue, and the local plans, which by definition can prepare
plans only for a local area. That worries me. Your question
was: what is the long-term outlook? I think the long-term outlook,
without some kind of guidance on housing numbers, is that local
authorities will tend to undershoot. You asked whether the incentives
would be enough. My view is that they probably will not be enough.
They will encourage authorities that want to build anyway; they
will not encourage authorities that do not want to build because
those incentives will not be sufficiently strong to promote that
building. But I am encouraged by the local choice White Paper,
which says all the right things. I am not sure it has all the
right policies within it to carry it through.
Q177 Simon Danczuk:
I get the sense that you think the process will stall, and that
that will have an impact further down the line. Am I right in
thinking that? Are you worried that the process will stall and
it has to change and it will take time to get back on track?
John Acres: It
will do so because we are changing a system completely from what
is seen as top down, which is a hierarchical system where there
is an overall target, regional targets and local targets, to a
bottom-up system that is supposed to be built up from neighbourhoods.
I have to say that having worked at every level and with a parish
council involved in local planning it is very difficult for people
at local level to see the bigger picture. At the end of the day,
if you are to build up a commitment to house building you must
look strategically even though you are local because you have
to bear in mind that wider picture.
Roy Donson: I think
we have to turn slightly to history. When the 2004 Act came in,
it completely changed the then planning system to the system we
now have, allegedly, with local development frameworks and so
on. The Government then brought in a mechanism that presupposed
the new plans would be in within three years. They saved existing
policies for three years. We sit here six years later with only
15% of the country covered by local development frameworks. That
is the nature of planning systems. The problem here is that this
large change again will probably be of that timeframe before it
is effective.
Q178 James Morris:
Am I hearing the argument essentially for the status quo? Regional
spatial strategies, as I think Mr Whitaker said, were very
good at producing comprehensive documents and definitions of targets,
but they did not deliver any more houses. So, were there any
weaknesses in the system of regional spatial strategies of which
the Committee should be aware?
Roy Donson: I think
there were and I think I have just outlined one: the very slow
process. If you have this top-down process, you start with the
regional spatial strategy; you then have the LDFs; then the allocations
documents; and then you paint the Forth Bridge again. It is a
very slow process, so, yes, it had its faults, but I do not argue
for the status quo; I argue for more clarity to prevent hold-ups.
Q179 James Morris:
Mr Acres, are you arguing for the status quo?
John Acres: My
argument is not for the status quo, although I see a role for
strategic planning. One of the things I did before I came today
was to go through the files. I found the strategic planning guidance
for both Merseyside and West Midlands that was produced in October
1988 during the period of the previous Conservative Government.
That is it. It is very slim—I think it runs to 12 pages.
It has general statements of policy and a set of numbers in the
appendix. That seems to me to be a helpful intervention because
it gives people a clear idea of the general strategy—I know
I must not use the word "region"—for a strategic
area, i.e. above local level.
Q180 James Morris:
You were making claims that the regional spatial strategies were
somehow misunderstood as top-down, hierarchical documents?
John Acres: Yes.
Q181 James Morris:
In what way can you support your claim that they were bottom up
and involved local communities?
John Acres: Because
I have been involved in the regional spatial strategies for the
West Midlands, East Midlands, the South West and to some extent
the others as well where you are involved in the process of consultation
that occurs over not just months but years with focus groups and
examinations in public that do involve community groups, church
groups, business groups and local authorities. It is not just
a question of somebody saying, "Here's a figure; work with
it"; it is a fairly time-consuming process of building a
strategy up from the bottom and getting consensus for it, but
I am afraid that has now gone. I believe that could have been
done much more simply and in a more streamlined way to produce
a clear strategy without all the time-consuming stages that went
with it. It does not need to be 100 pages long; it can be half-a-dozen
pages long.
Mike Freer: I just want
to correct the assertion that regional spatial strategies were
consensus-oriented and collaborative. I have to tell you that
in London they were not. The London plan was very much top down
and did not have the consensus of many local authorities. I want
to correct that so it is on the record.
Chair: Obviously, that
is a view about how effective they were.
Q182 Clive Efford:
Do you know what is meant when people say "affordable housing"?
Do you have a definition for us?
John Acres: PPS3.
Roy Donson: There
is a broader definition, which is housing that is affordable to
who wants to buy it, but if you mean the strict definition in
planning, there is a definition that is related to social, rented
and intermediate housing.
Q183 Clive Efford:
Would you put an estimate on the income of those people on whom
those properties—affordable housing and intermediate housing—would
be targeted?
Roy Donson: I will
not put an estimate on actual yearly earnings because it will
vary across the country, but the general rule that has been followed,
which you will find set out in the strategic housing market assessment,
is that the definition of affordability is 3.5 times single income
and 2.9 times joint income. I think that definition is a little
out of date because it related to a period when interest rates
were much higher. I think a better definition is related more
to the proportion of income that should be spent on housing.
Q184 Clive Efford:
You are talking about a definition that is applied when somebody
is borrowing?
Roy Donson: Yes,
but that is the accepted definition of affordability.
Q185 Clive Efford:
Mr Whitaker, you produced a report entitled Broken Ladder
in which you highlighted some difficulties in terms of people
being able to afford houses in future. Assuming these conclusions
are correct, what impact do you think that will have on future
demand for housing and, therefore, future house building?
Andrew Whitaker:
Broken Ladder drew attention to the problems of mortgage
availability, the tight restrictions on lending and the requirement
for a very high or very low loan-to-value ratio—I have never
understood which way round it is, but you now need a very large
deposit and the report drew attention to how people would find
that deposit in order to buy their homes. However, home ownership
is not necessarily the only route forward for newly forming households.
People still need houses; they just need a different tenure of
house, so other products, such as shared ownership products right
the way down to social housing, are all part of housing requirement.
Q186 Clive Efford:
But didn't your report conclude that if somebody was in the private
rented sector in London they would not be earning enough to save
any money at all towards becoming a home buyer?
Andrew Whitaker:
It did draw the conclusion that, yes, on the face of it people
could not afford housing in some parts of the country because
they did not earn enough and their outgoings took up all the money
they earned. Therefore, they did not have a savings vehicle to
save up the deposit to purchase their own house. That does not
mean they are inadequately housed; it means that they are in a
different tenure of housing, i.e. the private rented sector.
Q187 Clive Efford:
What I am trying to tease out is whether there is a need in the
economy for affordable rented accommodation, i.e. social housing,
if people are to be home buyers in the future. Is that the thinking?
Andrew Whitaker:
There is. We have long campaigned for a better definition of
affordable housing and getting rid of the word "affordable"
because it is very misleading. As we have stated, pretty much
all housing is affordable to someone. What you need is a different
definition. "Subsidised housing" might be the right
definition. In the past the planning system has tended to polarise
housing tenure into merely social rented or full market purchase.
Therefore, planning has said, "for 'affordable housing',
read 'social rented'". It is only quite recently that we
have started to be able to move into intermediate products, such
as shared equity products, HomeBuy Direct, and developers' own
shared equity products, that extend the definition of affordable
or subsidised housing.
Q188 Clive Efford:
It is the case then that, in large parts of London, people who
are paying private sector rents may aspire to buy a house but
will probably never be able to save enough. Your report pointed
out that they would need a deposit of £62,000.
Andrew Whitaker:
Yes.
Q189 Clive Efford:
You have a case that shows that people would have to save £700
a month—you can do the maths and work out that they will
be grandparents before they can buy a house. If that's the case,
don't we need some sort of top-down strategic planning for affordable
housing?
Roy Donson: To
go back to the Kate Barker report, we need more housing. How
we get there is a different question. We definitely need more
housing. I cannot remember where the quote comes from, but without
doubt in this country we are a million houses short of where we
ought to be in relation to household formation versus supply.
Without doubt we need a mechanism that produces more housing.
That is where I welcome the statements that have been made by
the Government that their objective is to produce more housing.
Great! I am absolutely with them on that one; I want to do it—I
can't wait to do it.
Q190 Clive Efford:
I did not hear you say "No". You do not agree with
me that we need more affordable housing?
Roy Donson: No.
We need more housing, because the lion's share of affordable housing
is paid for out of 106 Agreements. What happens then is that
if you have a requirement to keep the affordable housing on a
site to a low value, which is then subsidised out of the land
value, the rest of the housing on the site goes up in value to
make the site viable. The consequence of that is a yawning gap
between those who are in the affordable housing sector and those
who are in the private sector. If you like, that gap is part
of the broken ladder, and at the same time as we build more housing
we must have a mechanism to bridge that gap.
Q191 Clive Efford:
So, you are saying that Section 106 has driven up house prices?
Roy Donson: Without
doubt the consequence of requiring high levels of affordable housing
is one of the things that has driven house prices because it is
part of the general burden of regulation to make housing sites
viable.
Q192 Clive Efford:
I do not want to be disingenuous, but are you seriously saying
to us that house builders in the private sector would sell houses
at lower prices than they can get in the market if it were not
for the existence of Section 106?
Roy Donson: No;
do not misunderstand me. That is far from the only issue. What
I am saying is that the whole burden of regulation on house building
has been a contributory factor to increasing house prices because
when you do a residual calculation, the top line is what you sell
the houses for. That generates the money that pays for everything
else.
Q193 Clive Efford:
And that is calculated in Section 106? If we are relying on voluntary
arrangements between local authorities, what will be the effect
on house building in the future? Do you think that with the incentives
for local communities, which generally are the block to building
new houses, they will be more amenable to houses being built within
their communities or around them if they are to benefit from the
proceeds?
Roy Donson: Will
they be more amenable? It depends on what the process is. As
I said earlier, this is quite a high risk. Will that be enough
to do the trick? My view as I put in my evidence is that it probably
won't and I suggest other ways to lever in more money. But what
you have to do to convince the community is look at the whole
package of the benefit of housing. It is not just how much money
comes with each house; it is the economic value of house building
of itself, and getting people off housing waiting lists and the
social benefit of housing. That is part of the package.
Clearly, what has to happen to make communities more
in favour of housing is a cultural change, which starts with these
sorts of issues. That cultural change can come only from the
Government essentially; it has to come from that top-down process.
It has to be established that house building is not only necessary
for the benefit of all but is a good thing for the country as
a whole and cohesive for society. We have to establish that as
a basic principle. Having done that, we can then start to turn
round the idea that, for some reason, which completely defeats
me, house building is bad. I do not understand why it is bad,
but that is a view.
Q194 Heidi Alexander:
I was going to pick up on Mr Donson's point, which is: why is
house building a dirty word? For me as a local councillor for
six years, whenever one tried to promote a new development, it
was as if housing and new homes were a dirty word when we all
know there is huge demand out there. In my experience, everyone
wants it but they do not want it at the end of their road. I
just wonder what your reflections are on that.
John Acres: I think
you have just hit the nail on the head. As a society and as individuals
we are schizophrenic, aren't we? We want to protect our own interests.
I never criticise individual objectors when they come up with
reasoned arguments for not allowing building to take place. I
quite understand that people do not want building close to them
if they feel it will be detrimental, but I think it is important
that people should understand the bigger picture. They should
understand the wider planning advantages of housing and that housing
is not necessarily detrimental. It is not about putting more
pressure on schools or services; it is about making those services
work more efficiently so that more children going into a school
means that school gets more resources, or more people shopping
at the local supermarket or whatever brings more business to that
community, making it a wider and more interactive community, and
allowing people to move from one place to another.
To me, it is strange that planning policy is becoming
more and more localised when the world is becoming more and more
globalised. We do not seem to think that is strange. I think
it is very strange.
Q195 Heidi Alexander:
Do you think it is about the fear of increased demand for local
public services and lack of suitable amenities for the new population?
John Acres: That
is what I think people fear. When we propose a development, people
will often come up with the criticism that there is no room in
the school. I will then go along and talk to the head teacher
and find, surprise, surprise, that there are plenty of spaces
in the school. Or it is said that there is too much traffic;
you will do a traffic survey and find that traffic is not an issue.
There may well be other issues that are much more legitimate.
One of the criticisms I have seen flowing through the planning
documents is that we have to change the system because developers
do not consult communities. Developers do and always have done,
and increasingly they consult communities as a matter of course;
they see it as part of their role because it is in their interests
to do so.
Q196 George Freeman:
I confess I am now confused and I ask you to help me. I think
everyone in this room agrees that we need to build more houses.
You seem to be saying on the one hand that we need a stable,
reliable system on which we can plan. You appear to be saying
that the RSS was such a system and that, contrary to the views
of some people round this table, you believe it to have been bottom
up and legitimate. Yet you would accept—indeed, your submissions
make it clear—that we have not been building enough houses.
The Government have taken the view that the right way to unlock
that is to break the perception, if that is all you think it is,
that the RSS and the panoply of planning systems are too top down
and get communities to think about their own needs. I struggle
to understand why, in the light of evidence that the previous
system clearly was not working, you think that to go back to the
old system is the right solution. I invite you to say what you
would like us to recommend that the Government should do to unlock
this wave of house building, if not what they are doing.
John Acres: First,
don't get me wrong; I did not say it was entirely bottom up.
I think the system we had until recently was a combination of
the two. Clearly, it is top down to the extent the Government
set a target of 240,000 per year they wanted to see built and
expected regions to try to identify their share of that. They
expected them to use the evidence base to give guidance as to
how that should be distributed, but the decisions then taken were
consensus, bottom-up ones to try to marry the two, effectively.
Q197 George Freeman:
It wasn't working?
John Acres: I do
not think it was working.
Q198 George Freeman:
So, what do we do?
John Acres: You
are quite right; it took too long, and to that extent I think
there was a need for change, but there was no need to throw the
baby out with the bath water. I think the system could have been
adapted, simplified and streamlined, but what we have now is a
completely different system. We will make it work; the house
building industry always does.
Roy Donson: Every
time the system has been changed in the past there has been a
fairly smooth flow in the planning process from the old to the
new system. If we go back to the 2004 Act, we had saved policies
that were the transitional arrangements, if you like. The difference
now is that we have taken away the top tier—whether that
is right or wrong, that has happened—and the transitional
arrangements are not sufficiently clear and are not sufficient
of themselves. All the other pieces of this particular jigsaw
are not there yet, but we know they are coming, so we end up with
a period of uncertainty.
Above all else, I want to reduce that period of uncertainty
to an absolute minimum and get on with the new system, give it
a go and see if it works. If it does not work, as I said earlier,
probably the only answer is to put more money into it somewhere
along the line to make it work. I can't think of anything else
in particular, to be perfectly honest.
Chair: I think that was
where the Housing Minister got to when we interviewed him last
time.
Q199 George Freeman:
You made a point about culture change from the top. You said
you thought the culture needed to change and the way to do it
was by Government.
Roy Donson: No;
it is Government making a statement; it should come from the top
that we need more housing and that housing is beneficial.
Q200 George Freeman:
But is not all the evidence that when Government says, "This
is good for you," the British public tends to decide quite
the opposite? A key point of the Government's policy is that,
if you let communities think about their own futures, they are
more likely to decide they need some houses.
Roy Donson: With
respect, they are thinking at the moment about their own future
against the background, for historical reasons or whatever, of
being anti-development. I am saying to you that background must
change. It does not have to change first but it must change as
part of this process. The impetus for that change must come from
some pretty bold statements by Government. If I am frank, there
are some bold statements in the document on local growth and I
am happy with those, but they do not tell me how. They tell me
what is to happen, but not how and the next step if that does
not work. My position is that I want to end the uncertainty.
If we remove that uncertainty and give this process a chance,
it may deliver. I am not saying it won't; it may deliver. If
it delivers, that is fantastic. I have no political beef one
way or the other, quite frankly. All I want is a greater delivery
of housing.
Q201 James Morris:
To follow up Mr Donson's point, I thought you were making a slightly
more profound point about the role of Government. You say that
what Government need to do is champion housing, but I got the
impression that you were talking about something slightly more
profound, which was that you expected Government to provide a
framework, do something and provide some kind of policy, but you
are just saying it is a rhetorical thing and that would be sufficient.
Roy Donson: No.
I do want them to champion housing, but I also want them to sell
the idea a bit more, if you like. At a local level, for example,
there is not a great deal of understanding about the benefit of
housing of itself. As often as not, all you hear are the disbenefits,
some of which John outlined. You are told that the school is
full, there is too much traffic or whatever; you just hear opposition
all the time. We need to champion that right from the top. Provided
that the Government are making the right sort of noises at the
top, we can do the championing at local level, but if you have
an expectation that suddenly there will be a cultural change at
local level to deliver, no matter what framework you have, that
is a severe danger.
Q202 James Morris:
Is it not the case that the previous Government made a lot of
public statements about the importance of house building, but
nothing happened? That is a categorical statement, but they championed
house building and nothing happened underneath.
Andrew Whitaker:
There are lots of reasons why housing does or does not get built.
It is all very well to go round saying, "I'm going to allocate
this site for housing," but if that site is not viable for
housing or there is no market for people wanting to live there,
that site will not come forward for development, no matter how
much you say it will do so. Regional strategies did not build
houses; all they did was say to local authorities, "This
is your role in life. You are a growth area", or "You
need to tick over", or "You are a regeneration area.
This is the role we want you to play." It was then up to
local authorities to allocate sites for development that were
deliverable and capable of being developed. Therefore, that required
them to be viable in terms of market deliverability and not to
be swamped with a whole load of policy requirements to pay for
lots and lots of public services because that makes the sites
unviable.
So, it does not matter how many sites you allocate
for development. If they are unviable they will not be developed.
You can sit there all day long allocating the wrong sites in
the wrong places and you will not get development. You can turn
round and say it is the fault of the planning system, but it is
not; it is the fault of the people who use the planning system
and have done it incorrectly. It was not the process but the
policy approach that was wrong. We saw it over time with the
Brownfield First strategy in PPG3 in 2001, where all sites were
pretty much restricted to previously developed land within urban
areas.
Therefore, local authorities could make sweeping
assumptions about the amount of development they could bring forward
on previously developed land and they would say, "This site
will be developed to 100 units this year and therefore we do not
need to allocate any more sites for development." Of course,
that site either was not viable or it took two years to come forward
for development, and even then it was developed at only 20 or
30 dwellings a year. Therefore, they were building into those
assumptions a shortfall of housing because they went about the
allocations process the wrong way. The fault of the previous
system was the policy approach, not the system approach.
Q203 Stephen Gilbert:
I think that one of the bits of jigsaw missing at the moment is
how we assess the number of homes needed. Obviously, it is something
for which the Committee has asked evidence. All three of you
have given us your views on that. It would be helpful if you
could set out how you think we can do that in a time when leaders'
boards are being abolished; and, if not, what the source and characteristics
of the dataset that we seek would look like.
Roy Donson: I think
you have to start by putting two things together. The first one
is demographics. What is the future population and its composition?
What strain will that therefore generate in terms of housing
requirement? You have to match that with economic development;
the two go hand in hand. You bring those strands together and
produce a local housing strategy as a consequence. A great deal
of that methodology already exists within the strategic housing
market assessment framework. They are the sorts of things you
bring together to produce that, but it must be very much a balanced
approach; it must match economic development with housing development
for the future of the area.
I think it is fairly easy to write a set of rules
by which anyone—I suppose it always would be a local authority—who
is producing a plan must abide. I look forward to the national
planning framework setting out those rules, the simple test being
for the national planning framework to set not a number by which
the local authority must abide, but a set of rules for going through
a process. That process is then tested at the subsequent inquiry
into that local plan. If it passes those tests, the plan is found
to be sound, and that is the basis for planning; that is the established
need.
Within that process, I may have a slight disagreement
with the particular local authority; I might think that the number
is slightly different from theirs. Whatever the result, that
is fine. If you do not have that set of rules, I would have a
problem if we are all agreed, being reasonable people, that the
housing requirement is 5,000 dwellings, to pick a number out of
the air, and the local authority produced a plan of 1,000 dwellings
and there is a quantum difference between us and they have no
evidence for that. There must be a set of rules that will come
to somewhere round the 5,000 figure, to use my example. We may
have a bit of an argument about 100 or 200 either way, but that
is by the by. Whatever that settled figure is, I will live with.
I would have difficulty with putting plans on the stocks that
are way short of housing need.
John Acres: To
add to that, I think Roy has described very well the sort of factors
you need to take into account on the demand side. If you look
in PPS3 you will see a whole list of criteria that the authority
should use that include both demand and supply side factors.
To take a given area, clearly you would look at the demographic,
economic and also the supply factors and perhaps the constraints
that might discourage you from providing quite so many. So, if
you were in the Peak District or Lake District, clearly you would
not provide enough to meet your ideal market demand; you would
probably throttle back, but you provide an alternative number
somewhere else to compensate for that. That is the strategic
approach that I think will be missing without some kind of overview.
I have three guidance bases here that I believe you
must take into account if you are trying to come up with a number.
First, you must take a long-term view. Authorities are sometimes
reluctant to do that. Secondly, you must base it on firm evidence,
which is available in a variety of forms - demographic, market
and economic - and, thirdly, you must look wider than just your
local area. If you are to allow people to move in, move out and
so on you can't base it just on the people who already live there,
because some of those people will have moved out in 20 years and
more people will have moved in.
If I may take the opportunity to respond to James
Morris's earlier point about why things have not happened in the
past three of four years, the answer is Roy's very first point:
development occurs over a very long period of time, so a site
in which you acquired an interest perhaps 10 years ago is one
for which you get planning consent today or in 10 years' time.
It really takes that long. To give you an example, Catesby started
to promote land to the south of Newark in Nottinghamshire probably
about five years ago. Five years before that, there was initial
interest in promoting the land by, I think, the University of
Nottingham. Today, we put in a planning application for 3,150
dwellings as part of Newark's own plans for their growth point
for the town. We have been working with Newark and Sherwood over
the past five years to get that introduced. Newark have seized
that opportunity with open arms and continued with their regional
strategy figure. They want to see growth. There will be a public
inquiry in the Newark area starting on 23 November, when their
LDF core strategy will be tested by an inspector based on those
figures. We will be part of that, and we are working in partnership
with them, as indeed are two other major developers on two other
sites, so it can work but it takes a long time.
Q204 Stephen Gilbert:
I just wondered whether Mr Whitaker had anything to add to the
comments of his colleagues about the dataset and evidential base
that we need to create properly to cater for housing need.
Andrew Whitaker:
To start with, I do not like the term "housing need".
We tend to talk about housing markets, and that is why we refer
to strategic housing market assessment because it is the whole
market for which you need to provide. If you need 100 houses
and only 90 are provided, 10 households will not get a house.
It does not matter which part of the spectrum does not get them;
10 people will not get them. I concur with both my colleagues.
I think it is a mixture of demographics and the economic cycle.
We used to do it very well indeed.
It is very easy to get hung up on individual people
and say, "Well, I don't need a house," but we must look
much wider than that. It is relatively easy in the social sector
because you have the names and addresses of everybody you are
trying to house. In a fluid housing market it is more difficult,
so you have to use data that rely on the propensities of people
to do things; it is not individuals. We do not know who in this
room will be divorced next year and therefore requires two houses
rather than the one in which they are living at the moment, but
we know full well that with this number of people, the propensity
will be for one of those couples not to be married next year.
You have to talk in the abstract and it is quite difficult for
people to get a feel for, particularly at local level, because
they will look round their settlement and say, "I don't see
anyone who is about to get divorced, so why do we need to include
that in the numbers?"
Q205 Stephen Gilbert:
Your point is basically that the aggregate of a local need will
not necessarily equate to the national need?
Andrew Whitaker:
I think that is correct.
Q206 Bob Blackman:
Moving to the New Homes Bonus, from what you have said to us in
evidence, you appear doubtful that this will succeed. Can you
explain your scepticism about it?
Roy Donson: Perhaps
I may relate that to the example of Leeds City Council. If Leeds
City Council delivers the number of houses as part of their strategy
over the next year, their New Homes Bonus will be about £3 million.
As an authority, they have to cut £50 million out of
their budget, so there is a disparity there.
The second issue is about when it is paid. The New
Homes Bonus, calculated over a long period of time, may appear
to generate a large amount of money. If an area is building,
say, 10,000 houses over a 20-year period, that would appear to
generate a very large amount of money and sounds very interesting,
but that money does not come in one lump; it comes in a series
of payments over a 20-year period. I fear that people will look
at that and ask what it will achieve; or if an authority decides
that it will save up those payments over a number of years for
a specific project, people may have a disconnect between that
project not happening when they want it to happen—in other
words, not early enough—and the benefit thereby of the bonus.
Those are the sorts of fears I have. Therefore, I come to the
conclusion that we need to add to it and generate more money first
up, but we also need to put it in context.
Q207 Bob Blackman:
To clarify, are you saying that the incentives need more cash
or that they need to be reshaped? What needs to happen?
Roy Donson: There
are two things. First, as part of my evidence I suggest that
we hypothecate stamp duty to the local area as well to add to
that process, but since I wrote that evidence lots of other things
have happened. There has been an announcement about TIF; there
is the regional growth fund to have a go at; and there is also
the Section 106 payments that we would normally make, be
it under a community infrastructure levy process or some other.
I think what you have to do is stick this lot together, if you
like, partly to sell the benefit of development. I think development
of itself is a benefit because of the GDP it produces, but in
addition to that, you have to put it together as a package and
then it starts to become something that looks worthwhile. If you
look at the New Homes Bonus in isolation, on a year-by-year basis,
it really doesn't ring too many bells, but if it is put together
with other things, it has the potential to do so.
John Acres: I have
a slightly different angle on this. I agree with Roy that it
is probably not enough to convince authorities who would not want
to build, but I am not terribly sure that it is being aimed necessarily
at the right people. My understanding is that it is designed
to encourage communities to accept development. The communities
are the people within those communities. I do not think those
people are convinced by an extra sum of money coming to their
local authority. To convince a person that development is good,
the individual must see a direct benefit to themselves or have
a wider social interest in seeing more development, which comes
back to Roy's point that somehow we need to get the message across
that house building is a good thing both for the economy and socially.
I am wondering whether it is the right way to do
it. I have slight nervousness about effectively bribing local
authorities to build. Local authorities should build if it is
right to do it in their areas and if there is a need for it.
At the heart of all this is planning. It seems to me that it
is planning that losing out because developers won't know in the
long term whether a local authority wants to go for growth or
hold back, and we will know that only when we see their attitude
to the New Homes Bonus.
Q208 Bob Blackman:
What do you think will be the effect of the New Homes Bonus on
Section 106 payments?
Roy Donson: In
some ways I would like to see it as an offset, but I do not see
that; I just view it as an addition.
Q209 Heidi Alexander:
You referred to the example of Leeds City Council and a potential
New Homes Bonus of, say, £3 million. I just wonder whether
local authorities on some large developments already negotiate
through, say, a development agreement - if they own the land -
and their Section 106s very substantial community benefits.
In my own local authority, there is a swimming pool that cost
probably the best part of £20 million. In your experience
as developers, when those types of community benefits have been
negotiated, does it mean that the local community is saying that
it welcomes with open arms the development of hundreds of new
homes? Even when the scale of the incentive, albeit negotiated
in a different way, is that large, I am still not convinced that
that means the local authority would be advocating the hundreds
of new homes that would be part of the overall development.
Roy Donson: I think
that is a very difficult question to answer, because the context
for providing those 3,000 dwellings was a very different one;
it was probably the RSS context, which effectively has been done
away with. That is a very different context, so the question
you are really posing is: if, as a developer, we were to come
along and provide a new swimming pool as part of the development,
would that be enough to convince people? I honestly do not know
what the response would be. I guess that some people who like
swimming would say "very much"; those, like me, who
are not very bothered probably would not care much about it.
I honestly can't answer that question.
Q210 Heidi Alexander:
I use it as an example of the scale of community benefit.
Roy Donson: What
I was going to say, however, is that in my view it should be the
case that the development only need pay for its own impact, because
if you go beyond development paying for its own impact, you get
into some rather dodgy territory about the reasons behind development
going ahead.
John Acres: Perhaps
I may use my Newark example. There, the local authority are firmly
committed to growth and have been for some time. They are firmly
committed to it partly because they want to see their town grow,
but also because they are desperate to have a southern link road
for the town. Effectively, the A1 bypasses the town to the east
and the A46 bypasses it to the west and the link between the two
is unfilled. They are very keen to have a link road and our development
happens to provide that. In that case, it is not a swimming pool
but a link road. It may not be very sustainable in today's world
but, believe me, they are very keen to see it.
Q211 George Freeman:
Given that there are three tiers of local Government and local
concern in terms of planning, in rural areas such as mine you
have the community parish council, the district council and then
the county council. Given the importance of the county council
in terms of determining transport, care provision and education—three
of the major issues in a rural area around sustainable development—and
the importance of the community feeling there is some benefit,
can you comment on what you believe is the appropriate split?
Let's leave aside the argument about what the quantum of money
should be and whether that is appropriate. Given that we will
have a New Homes Bonus, can each of you say what you believe is
the appropriate ratio between community benefit, district council
and county council in a rural area?
Roy Donson: My
instant answer would be to base it on the current council precept.
Notionally, I would have thought the current make-up of your
council tax—how much you pay to the parish, the district
and county—must be a reflection of services. Therefore,
that seems about the right balance, but that is completely off
the top of my head and I do not have any justification for it.
Q212 George Freeman:
Do you disagree?
John Acres: I agree
with Roy. On the other hand, if you are looking at it as an incentive
to growth you would try to shift it in the other direction and
give more to the neighbourhood, who are the people who accept
the growth, and proportionately less to the district and county.
That would be the logical thing to do, but I agree with Roy that
if it relates to services it ought to be according to the current
precept arrangements.
Q213 James Morris:
All of you have talked about the importance of strategic planning
in relation to this area. What do you think of the role of local
enterprise partnerships, which the Government have announced—I
believe 24 have gone through—as a platform for achieving
that level of strategic planning?
Roy Donson: I think
it depends on what you mean by "strategic planning".
I would not want local enterprise partnerships to start dictating
where housing numbers go, because that is not very far down the
road from their becoming mini-regional assemblies, which is probably
where we do not want to go. At the moment, even though there
is a lot in the local growth White Paper about local enterprise
partnerships, there is not much about things like their powers.
Do they have powers and, if so, what are they? There is not
much about their statutory basis; nor is there much about their
funding, so at the moment there are quite a number of unknowns
about local enterprise partnerships, which makes it very difficult
to suggest what role they should have. For me, I would like to
see them looking at their area in terms of locational priorities
so they could come forward with a document that suggests the areas
for growth on which to concentrate based upon sustainability factors
and also things in which they may well have a direct interest,
which are both economic development and infrastructure provision.
I think that if you get that as a direction, and no more than
that, and that is a material consideration in drawing up the subsequent
local plan, that is about the right balance of role in my view
between an LEP and the local authority.
Q214 James Morris:
Do you think they need to have powers, or would it be sufficient,
for example in the Black Country, which is the area I represent,
for the four local authorities to come together collaboratively
when there are strategic planning issues to be considered without
them necessarily needing to have powers; in a sense, pooling sovereignty
to collaborate to make decisions? In your view do they need to
be given powers?
Roy Donson: I think
they need a clear, recognisable structure, which for my money
can only be set down.
Q215 James Morris:
They might have a duty to co-operate but would that be sufficient?
Roy Donson: Again,
the duty to co-operate is one of the great unknowns at the moment.
I think it is a good idea; people should co-operate anyway, but
I do not know what would happen, for example, if they did not.
Where is the sanction if people do not co-operate? It comes
right back to the beginning. In the process we are in these are
all pieces of the jigsaw and we do not have those pieces yet.
I would very much like to have those pieces rather rapidly, please.
I think an LEP needs to have a clear entity; otherwise, I do
not quite see how they can function. The danger is that if they
do not have a clear entity they end up being just a talking shop.
John Acres: To
expand on that, the other danger is that if we have LEPs making
key decisions in what is a quasi-judicial process, i.e. planning,
where you make legal decisions that have an impact and people
appeal against them, you must rely on policy when you appeal.
What status can you give the policy of an LEP that has no powers
as such? That is one of my concerns.
The second concern is that at the moment we have
24. We do not have a full picture across the country. I am not
sure we will get a full network or patchwork of LEPs. If we don't,
how can we have a strategic system that does not match up? That
also worries me. Maybe it does not matter and you can have overlapping
LEPs and LEPs with gaps in between where the areas are not significant,
but as a planner my feeling is that there ought to be some kind
of structure on which you can rely.
Having said that, I have read this document and am
quite encouraged that the Government are taking a measured approach
to it. I am now a lot more positive than I was when I wrote my
evidence where I said I thought it was a retrograde step. I am
not sure that it is. I think that to have economic areas based
on market areas is a sensible approach and I could see them working,
but I am not quite sure what their role is in strategic planning.
I also think that is a bit unclear in the document, too. It
talks about economic and infrastructure planning but not about
housing. I am just wondering whether that omission is deliberate
or just that housing was a bit too sensitive to talk about.
Andrew Whitaker:
We faced this challenge before under the previous system with
regional development agencies. They produced a regional economic
strategy for their regions and the RSS was the spatial strategy
for the region, and that allocated or identified areas for housing
growth. We collectively and the Government of the time decided
that those two documents were disjointed and therefore wanted
to combine them into the regional strategy of which we are now
seeing the back. I think it is an age-old problem. I would concur
with Mr Acres in that I do not think we have enough rules
and methodology behind establishing LEPs to give them the powers
that some people suggest. I think it is indicative of the fact
that a lot of people believe we need some sort of mechanism to
look at things in a wider than local, or larger than local as
the RTPI puts it, context, because everyone is saying that the
LEPs can do that because they are larger than local and therefore
will have an overview. We remain very worried about the role
of LEPs if they remain self-elected or self-proposed, do not have
any constitution behind them and do not even have any rules about
their make-up. There is a very loose idea that they are business
and local authority-led. As far as I can see, the majority of
them appear to be very local authority-led and not very much business-led.
Q216 Chair: I
make a very brief comment about one of my concerns. Obviously,
as developers you have land for which in some cases you have planning
permission, but you cannot go ahead and build because of the current
economic climate. Mortgage availability was mentioned as a particular
factor in lowering demand. If the housing market picks up in
three or four years, maybe before that, but the planning permission
on those particular pieces of land expires and then the local
authority looks at them again and, in light of the new planning
guidance, decides not to give permission would that be a concern,
both in terms of your own businesses but the development of a
potential hiatus where you are simply not capable of responding
in a proper way to demand when it returns?
Roy Donson: If
we have a planning consent on a piece of land, it is like gold
dust. If we were to let it lapse it would be very foolish. Yes,
obviously we would have a concern if the system conspired against
us and we could not do anything about it, but we would wish wherever
we can to maintain that consent, obviously within the bounds of
planning law.
Q217 Chair: You
will start the foundations or something?
Roy Donson: Whatever
we have to do to maintain it. We also can't afford not to do
that, in all honesty, because if there is a difficulty, be it
short, medium term or whatever, in bringing forward new land we
will have to rely on that resource to keep our business running
until the new system is fully up and running and delivering, so
it is very important for us to do that.
John Acres: Our
situation is the same, except that we operate slightly differently.
Normally, we get planning consent as a property company and then
move that site on to a house builder who is better at it, although
we sometimes build commercial and retail developments. But, like
Roy, we would not sit on a planning consent; we just could not
do it. You either sell it on straight away or build on it. We
do not have planning consents stored up; we just would not do
it. We have options that are ready for the future, but they have
a limited time scale, so it is important to make sure that you
get planning consent before your option expires; otherwise, you
have lost a lot of money. Remember, it takes a lot of money and
effort to promote sites through the planning system. It takes
six-figure, sometimes even seven-figure, sums to promote large
sites, and you cannot afford to let them lapse.
Chair: Thank you all very
much for coming this afternoon and answering our questions in
such detail and so thoroughly.
| 
