Abolition of Regional Spatial Strategies: a planning vacuum? - Communities and Local Government Committee Contents

Written evidence from Magdalen Development Company and Kennet Properties Ltd (ARSS 126)

This submission is made on behalf of the Magdalen Development Company and Kennet Properties Ltd (a wholly owned subsidiary of Thames Water), which have jointly promoted a sustainable urban extension for some 4,000 new homes on the southern edge of Oxford City— referred to as the South Oxford Strategic Development Area (SDA).

Located immediately adjacent to Oxford City, although located in the administrative area of South Oxfordshire District, the Strategic Development Area was identified as a specific policy commitment in the now revoked South East Plan as one of seven SDAs across the region. The SDA was identified as part of the spatial strategy for the Oxfordshire sub-region in order to provide a new supply of much needed housing in the area to address the acute issue of affordability locally and to reduce the severe congestion caused by in-commuting to Oxford due to the imbalance of jobs and homes in the city.

Through their promotion of the urban extension, Magdalen and Kennet Properties therefore have an important perspective on the questions posed by the Inquiry.


1.  Abolition of Regional House Building Targets

revocation of Regional Spatial Strategies (RSS) has had the effect of stalling the preparation of local development plans that will inevitably now impact on the supply of land for housing in the Country;

as an example, a current shortfall in housing delivery in Oxfordshire will be compounded, maintaining the current affordability gap, delaying economic recovery and prolonging unsustainable patterns of commuting within the county.

2.  Effectiveness of New Homes Bonus

there has been no evidence yet that the new homes bonus will be "powerful" or that it will give "direct and substantial benefit" as promised in the Parliamentary Statement of 6 July 2010;

the revocation of RSS has removed the ability for housing delivery to be co-ordinated so that it avoids the most sensitive locations within a Housing Market Area, with individual authorities now having to meet all of their housing needs within their boundaries the bonus may lead to pressure for development to be located in environmentally sensitive locations;

despite the letter from Grant Shapps dated 9 August and the content of the 6 July statement, it is becoming apparent that there is a trend towards local authorities reducing their projected housing requirements, contrary to the evidence of need for both open market and affordable housing;

this trend appears to demonstrate that the local political imperative to reduce the scale of new housebuilding due to local objection may override the intended effect of the new homes bonus to incentivise local authorities to plan for more homes;

taking account of due process authorities are unlikely to be able to realise significant benefits from the bonus much before 2013;

a flat rate bonus may not incentivise authorities who's Council Tax charges are low; and

there is a risk that prosperous authorities will opt to set low housing targets and forgo revenue from the bonus. Mechanisms should be put in place to avoid this happening.

3.  Arrangements for Appropriate Co-operation

there should be a means of addressing both the scale and location of housebuilding at a more strategic level than just the administrative area of the local planning authority;

this is particularly the case where main urban area's are constrained by their administrative boundary and expansion is therefore in the control of the adjoining authority; and

co-ordination provided at a sub-regional level would better reflect economic and housing delivery market areas, allowing for these important interlinking factors to be addressed coherently.

4.  Duty to Co-operate Potential for Local Enterprise Partnerships to Fulfil a Planning Function

a duty of co-operation is to be welcomed and preferably should be a requirement of primary legislation;

Local Economic Partnerships (LEP's) have the potential to assist with managing debate between authorities, and helping individual authorities to perform their functions, but to be effective business organisations will need to work alongside planning and policy making bodies; and

It would be sensible for LEP's powers to extend to policy setting and plan-making.

5.  Utilisation of data and research collated by Regional Local Authority Leaders' Boards

the evidence base that has informed the now abolished RSS is comprehensive and in many cases has been tested thorough independent examination;

it would be counter productive not to make available to plan making bodies the Leaders' Boards data and research, particularly that submitted as part of the RSS examinations in public; and

data and research would be best reviewed through the ongoing Local Development Framework processes.

1.  Implications of abolition of regional house building targets for levels of housing development

The primary objective for any system of development plans is for it to deliver more sustainable patterns of development. To achieve this objective the development plan system has traditionally involved two levels of plan-making; one strategic and one local. In order to achieve the strategic function we have had in the past both non-statutory regional planning guidance (RPG) and Structure Plans, which were part of the statutory development plan. In that context the need for strategic and local plan-making has long been understood by the public who have engaged in that process.

Revocation of RSS on 6 July has removed from the system the strategic level of plan-making without provision being made for any replacement in this function. This has led to uncertainty as to the appropriate process and objectives for the local level of plan making. The void in the plan-making system has given rise to incidences of Council's withdrawing their Core Strategies (South Oxfordshire and Aylesbury Vale for example). Withdrawal of Core Strategies is particularly concerning in planning authority areas where there is no up to date development plan. This is because with no Core Strategy or saved Local Plan policies, there is no basis for the assessment of planning applications. Where there are saved Local Plan policies these are often outdated, and may not therefore address issues that have gained importance in recent years, for example energy conservation and affordable housing.

Policy uncertainty has also led to unwillingness on behalf of LPAs to make decisions to grant planning permission for large sites for housing and other forms of development. This will impact on housing delivery in the next five year period, leading to fewer housing completions. On current trends it seems that the cumulative shortfall in housing completions will worsen, as indicated by research conducted by Savills[151] which shows that there could be a shortfall of more than one million homes by 2016.

The policy uncertainty does not only impact on the immediate supply of land for development, but also the longer term projects that are necessary to maintain the 15-year supply of housing land. There are decisions being made now by local planning authorities to delete proposals for Strategic Development Areas, even where these represent the most sustainable option for development in that area. In the last two weeks we have seen local authorities in Aylesbury and Milton Keynes overturn proposals for strategic releases of land adjoining Milton Keynes.

Equally, the South Oxford Strategic Development Area, which was identified as a location for 4,000 new homes as part of a sustainable urban extension to Oxford City[152] will now not proceed. The implications of this in Oxford are the inability for housing completions to match household formation/housing need. Oxford City Council's Housing Provision Background Paper[153] illustrates the point confirming that:

"As in many other urban areas across the region, projected housing need in Oxford exceeds current supply and targets but in Oxford, housing land availability is the ultimate constraining factor."

The affect of the revocation of RSS in Oxfordshire is the perpetuation of the "Country Towns" strategy, which diverts housing requirements away from Oxford City towards Banbury, Bicester, Witney and Didcot despite the fact that Oxford is the principal focus of jobs in the County. It was demonstrated through the RSS examination process that in recent decades this has been the cause of a widening affordability gap at Oxford and unsustainable patterns of development caused by the separation of homes from where people work, which in turn, has led to unsustainably long commuting journeys.

2.  The likely effectiveness of the Government's plan to incentivise local communities to accept new housing development, and the nature of the incentives which will need to be put in place to ensure an adequate long term supply of housing

The Coalition has given a commitment to "…provide local authorities with real incentives to build new homes." via their Parliamentary Statement of 6 July. In the intervening months, however, clarification of exactly what form the promised "powerful incentives" that will "give direct and substantial benefit" will take has not bee provided.

Understandably, given uncertainty about the form of the "new homes bonus", it has yet to be a factor in decision making by local planning authorities. Furthermore, it is uncertain what affect financial incentives might have on the delivery of sustainable patterns of development. There are local authority areas in which it is undesirable to increase the number of homes to be built because of their environmental sensitivity. The RSS process allowed for a balance to be struck across Housing Market Areas (HMA), such that environmental constraints that limit levels of housebuilding in one part of an HMA could be off-set by increased levels of planned housebuilding elsewhere in the HMA. The overall effect of this strategic level of plan-making was therefore to achieve a balance across the HMA. However, it does not appear that a process by which such balancing of environmental and market factors can be achieved will be put in place.

Research carried out by Roger Tym and Partners indicates that 51% of planning authorities intend to change their housing targets.[154] Since July it has been increasingly apparent that the trend will be for authorities to reduce their overall target rather than seek to increase it (West Oxfordshire District Council and Aylesbury Vale District for example). It seems therefore that the local political imperative, in response to local objection, may lead to a reduction in the scale of new house building and that the new homes bonus may not therefore be effective in overriding this.

Even when the final form of the bonus is known, which as we understand it will be in the spring of 2011, planning authorities will need time to develop effective housing strategies and carry these through the development plan process. Due to the need for consultation and scrutiny by public examination this process is likely to take several years. This would suggest that planning authorities may not be able to realise a significant uplift in the delivery of land for housing until much before 2013.

There will need to be careful consideration of how the bonus is to be structured. A flat rate applied across the whole country is unlikely to be effective as authorities that do not levy significant levels of Council Tax will not benefit to the same degree as authorities that levy higher levels of tax. It will also be important to define who exactly will benefit from the bonus, particularly in two tier authorities where it is likely to have to be split in some way between County and District. Furthermore, issues could arise where development takes place on the edge of an urban area, but is actually located in an adjoining local authority area. This would have been the case with the South Oxford SDA, which was an urban extension of Oxford City that was wholly located in South Oxfordshire District. Given that most of the services provided to the urban extension would have been provided by Oxford City, a proportion of the funds generated from the scheme via the new homes bonus would logically go to the City Council. In such circumstances, the proportion of the new homes bonus that goes to each local authority will need to be the subject of an agreement that is set at the start of the planning process.

Finally, there is the question of whether all planning authorities will choose to pursue the bonus. In those authorities where levels of prosperity are already high, in the South East of England for example, there is the potential for authorities that do not need to secure funding via the bonus, forgoing the bonus and instead opting to build fewer houses. To avoid this it would be prudent for mechanisms to be put in place that will ensure delivery of the minimum number of residential units required to meet forecast needs. To be robust, it would be best for these minimum targets to be the subject of independent scrutiny including public examination.

Therefore, unless the homes bonus scheme is truly a powerful incentive that provides direct and substantial benefits across all authorities, and is coupled with mechanisms to prevent "opting out", there is a reasonable prospect that it will not be effective in securing increased housing delivery as is intended.

3.  The arrangements which should be put in place to ensure appropriate cooperation between local planning authorities on matters formerly covered by regional spatial strategies (eg waste, minerals, flooding, the natural environment, renewable energy, etc)

Planning is not a function that can be handled solely at the local level. Planning issues are wide-ranging and often have impacts that extend beyond individual administrative boundaries, for example minerals and waste, flooding/drainage and renewable energy. At the strategic level there needs to be a means for managing debate between local authorities over the scale and general location of development.

If planning authorities act without regard to strategic and cross boundary issues it will not be possible for effective strategic policies and development strategy's to be formulated and implemented. An important consideration is therefore for the creation of a mechanism that will secure co-operation between authorities, via formal arrangements for strategic plan making.

An example of where co-operation between authorities will be particularly important, as referred to above, is where the expansion of an urban area into an adjoining planning authority's administrative area represents the most sustainable solution. The former South East Plan provided a framework for this, and put in place appropriate mechanisms for co-operative working. The abolition of the RSS has however left a void in the policy framework that is yet to be filled.

Oxford's administrative boundary is tightly drawn around the urban area, limiting development options. The constrained nature of the City in policy, geographic and heritage terms means that developable land within City limits is a finite resource. As a consequence high levels of housing need, very poor levels of affordability and constrained economic activity prevail.

Through the formulation of the South East Plan it was determined that an opportunity existed to address the issues faced by Oxford through an urban extension to the south of the City, on land within the administrative boundary of South Oxfordshire District. Policy CO4 of the South East Plan confirmed that exceptional circumstances existed to justify a review of the Green Belt boundary in this location in order to accommodate some 4,000 new homes as part of a sustainable mixed use urban extension.

Paragraph 22.20 of the South East Plan directed that the review of the Green Belt boundary to accommodate the SOSDA and subsequent plan making should be carried out collaboratively by South Oxfordshire District Council and Oxford City Council to a timetable and in a form to be agreed with the Government Office for the South East.

Whilst the South East Plan was the subject of legal challenges and has subsequently been revoked, the need for additional housing to meet the needs of Oxford City remains. At some point in the future the debate about whether, and in which direction, the City should expand will need to be re-opened. If at that point it is again considered that an urban extension represents the most sustainable solution for Oxford, the absence a mechanism to plan for that and ensure appropriate co-operation between authorities will become a barrier to delivery.

The efforts of individual planning authorities should therefore be co-ordinated if the objective of sustainable planning is to be achieved. In the absence of Regions, this either needs to be co-ordinated at a County level or some other sub-regional level that reflects economic and housing delivery market areas. In the latter, it would seem that Local Enterprise Partnerships (LEP) could have a role to play.

We comment further in relation to the role of LEP's in our response to question 4 below.

4.  The adequacy of proposals already put forward by the Government, including a proposed duty to co-operate and the suggestion that Local Enterprise Partnerships may fulfil a planning function

A duty of cooperation is to be welcomed and to be robust it would be wise for this to be a requirement of primary legislation. If the duty is not limited to cross-boundary consultation, but also extends to policy setting and plan making where this is required to achieve the most sustainable solution, that would be advantageous.

LEP's have the potential to assist with this process. In Oxfordshire the County Council and surrounding Oxfordshire District's have submitted a bid to DCLG to form the "Oxfordshire City Region Local Enterprise Partnership".

The strengths of Oxford's economy are in its world-class entrepreneurial universities and hospitals; internationally known research base; high quality environment and "brand"; cluster of biomedical and science-based industries, with a good supply of research and development premises and local support network; and highly skilled workforce. Growth in the health sector in Oxford over recent years has been greater than in comparable cities in the UK. Oxford's growth reflects high levels of Government spending in general and its role as a centre for medical excellence and concentration of medical research and specialist facilities. Financial services and tourism have also grown. Manufacturing also remains important, principally at the BMW (mini) plant at Cowley[155]. As such, Oxford makes a significant contribution towards the prosperity of the South East. To ensure continuing economic success, key sectors of the economy must be nurtured and developed. This cannot however happen where a shortage of housing and disproportionally high house prices act as barriers to relocation of businesses to the City or the recruitment and retention of staff by businesses already located in Oxford.

The Oxfordshire City Region LEP may well have a role to play in delivering the managed growth of Oxford City. However, to achieve this, the Partnership would be best structured so that businesses can work alongside policy making bodies such as County and District Councils. This would ensure that LEP's will have the vision and ability to formulate or implement strategic policies.

The impartial oversight of work carried out by the LEP would be beneficial. In this context Government Offices could continue to fulfil the functions of providing strategic guidance and arbitration.

5.  How the data and research collated by the now-abolished Regional Local Authority Leaders' Boards should be made available to local authorities, and what arrangements should be put in place to ensure effective updating of that research and collection for further research on matters crossing local authority boundaries

Prior to the formulation of Regional Local Authority Leaders' Boards, Regional Assembly's were responsible for the formulation of Regional Strategies. In many cases evidence gathering and development of evidence bases for RSS's took place over a period of half a decade or more, with input from relevant planning authorities, business leaders and other bodies.

The evidence base informing the now abolished RSS's and inherited by the Regional Local Authority Leaders' Boards is therefore comprehensive and in many cases has been tested through independent examination. It is therefore a valuable and potentially very robust resource.

Accordingly it would be counter productive not to make available to plan making bodies the Leaders' Boards evidence. To make the transfer of information manageable and ensure that data is the most up to date, it would seem sensible for the information submitted to support the RSS examinations in public to be released. This should be reviewed, and updated as necessary, through the Local Development Framework processes already underway in most local authority areas.

September 2010

151   Savills, residential Property Focus, May 2010. Back

152   Government Office for the South East, The South East Plan, May 2009, Policy's CO1, CO3, CO4. Back

153   Oxford City Council, Housing Provision Background Paper, 20 August 2010. Back

154   Roger Tym and Partners, Local Authority Response to Localism, August 2010. Back

155   Oxford City Council, Oxford Core Strategy 2026, Combined Changes, September 2010. Back

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Prepared 31 March 2011