Written evidence from Fairview New Homes
(ARSS 134)
INTRODUCTION
Fairview New Homes is an established and respected
house builder with more than 40 years experience developing residential,
mixed use and mixed tenure sites across London and the southeast
of England. Fairview New Homes work closely with local communities
to deliver innovative and sustainable development solutions.
In this document Fairview New Homes is submitting
this evidence on its own behalf, but has also joined with a broad
range of organisations engaged in the development sector (including
in addition to property developers; investors, consultants and
other advisors) represented by law firm Hogan Lovells International
LLP. Representations jointly on behalf of Argent Group Plc, Baker
Associates, CJC Development Company Ltd, The Church Commissioners
for England, Crest Nicholson Limited, Fairview New Homes Limited,
Gleeson Strategic Land Limited, Property Development Specialists
and Welbeck Land Limited, were submitted by Hogan Lovells International
LLP under separate cover dated 14 September 2010.
Fairview New Homes is able to draw on direct experience
of the consequences of the abolition of the Regional Spatial Strategies
and is well placed to reflect on over 50 years development experience
when commenting the implications of the abolition of the Regional
Spatial Strategies not only for itself but for the commercial
property sector.
SUMMARY
The revocation of regional strategies has outside
London created a policy vacuum resulting in uncertainty for the
development industry, delay in local development frameworks being
progressed, delays in planning applications being determined and
some development projects being put on hold or abandoned.
These uncertainties and delays are leading to a slow
down in the delivery of much needed housing development thereby
frustrating economic growth.
The abolition of regional guidance and the housing
targets in particular is being used by those opposed to development
as a means of slowing down development approvals and the delivery
of new housing.
In the absence of guidance at a regional level, national
policy (in PPS3 in particular) is absolutely vital to housing
delivery. Clarity is required on how authorities should calculate
housing need to achieve consistency.
Some housing markets cross local authority boundaries.
It is essential that a means of achieving co-operation between
local authorities within a region is put in place as soon as possible.
The proposed statutory "duty to co-operate"
is likely to be too vague to achieve the required levels of co-operation.
More certainty is required on this issue.
Insufficient detail currently exists regarding the
proposed incentives based system. However, financial incentives
are open to abuse and are unlikely to lead to better planning.
There is either a risk that local authorities will be motivated
by the amount of financial gain on offer rather than ensuring
that the right development is delivered in the right place meeting
appropriate need, or they are not incentivised at all and utilise
the opportunity presented by the abolition of the RSS to resist
and/or frustrate development
If incentives are to be introduced, the way in which
they are distributed and applied needs to be established. Incentive
funding should be used for purposes related to the development
which has given rise to the incentives being paid.
THE SUBMISSION
This submission in turn addresses those issues raised
in the Inquiry terms of reference i.e. (i) the implications of
the abolition of regional house building targets for levels of
housing development; (ii) the need to ensure cooperation between
local authorities on matters formerly covered by regional plans;
(iii) the likely effectiveness of the Government's plan to incentivise
local communities to accept new housing development; and (iv)
other issues.
(i) The implications of the abolition of regional
house building targets for levels of housing development
Uncertainty/Delay caused by the abolition of targets
Within the short term the revocation of regional
strategies and the absence of any clear interim guidance has created
in some places a policy vacuum resulting in severe uncertainty
for the development industry. That has manifested itself in various
ways, including:
1. a delay occurring in relation to the progressing
of Local Development Frameworks ("LDFs") (particularly
pending announcements by the Government of further revisions to
the LDF system);
2. a delay in planning applications being processed
and determined and/or proposals being resisted unnecessarily;
and
3. certain development projects being put on
hold or even abandoned by those promoting them, particularly where
due to the degree of complexity of the project planning promotion
costs are disproportionately high.
The uncertainty relates principally to the general
policy context within which all of the above issues need to be
considered. Ultimately the uncertainty/delay is leading to a slow
down in the delivery of much needed housing development.
There are numerous examples of Councils delaying
or withdrawing their Core Strategies. The latest example is Aylesbury
District Council which on 8 September was considering a recommendation
to withdraw its Core Strategy from the examination process.
One of the unintended consequences of the abolition
of the RSS is the inability and/or unwillingness of Local Authorities
to engage in meaningful pre-application dialogue with prospective
developers of sites within their area. This in turn results in
developers being unable to quantify/qualify investment risk, which
ultimately will result in the 'flight of capital' from the development
sector and a dramatic reduction in the supply of new housing.
An opportunity for opponents of new housing development
Supporters of the regional strategies and the housing
numbers which they contained saw them as providing a means of
ensuring that housing development would be delivered, particularly
within those areas where local authorities and communities are
resistant to additional housing development. The revocation of
the regional strategies is accordingly being treated as an opportunity
to slow down or even frustrate approvals for new housing development
by those who are opposed to it. However, in circumstances where
the "need" for new housing remains pressing no evidence
base has been established to justify this approach.
Regional Differentiations
It is often the case that opposition to housing development
is most acute in those areas which are under greatest pressure
in terms of the need to provide more housing and the scarcity
of land available upon which to provide it. It is for this reason
that the greatest resistance to the housing numbers set out in
the regional strategies was from those local authorities and communities
faced with the greatest challenges to deliver the housing numbers.
In assessing the implications of the abolition of regional strategies
it is therefore important to bear this distinction in mind and
to appreciate that, as a result, the implications have been very
different from one region to another.
(ii) The need to ensure cooperation between
local authorities on matters formerly covered by regional plans
Co-operation between local authorities
In the absence of "overarching" planning
policy at the regional level under which local authorities are
obliged to pursue clear targets and objectives, the issue of co-operation
between local authorities becomes absolutely fundamental. Co-operation
will be essential to ensure a co-ordinated approach towards the
delivery of development and essential infrastructure, which will
in turn secure economic growth. These issues are particularly
problematic where development and infrastructure has to be delivered
across wide areas including across local authority boundaries.
Until their abolition, the regional strategies acted
as a framework within which the development and infrastructure
required was reasonably assured. In the absence of regional strategies
going forward, there should be an obligation on local authorities
to put in place, by a defined time, appropriate structures to
achieve a replacement framework. The proposed "duty to co-operate"
has to date been expressed extremely vaguely and is likely to
be inadequate. An analogy is the statutory duty contained in Section
39 Planning and Compulsory Purchase Act 2004. Section 39 contains
a statutory duty on a person or body who exercises certain plan
making functions to "exercise the function with the objective
of contributing to the achievement of sustainable development."
That statutory duty has been much too vague to have any meaningful
effect. If it is proposed to create a similarly vague statutory
duty upon local authorities generally to "co-operate"
in relation to matters previously covered by regional strategies
no solution will be provided. Instead, local authorities should
be required to put in place structures within defined parameters
and by a defined point in time in order to address the vacuum
which has been created. If Local Enterprise Partnerships are to
be used for that purpose, their role needs to be clearly defined.
This will be particularly important where, for example, cross-boundary
housing needs assessments are required.
National Planning Policy will have a vital role to
set the context for the new structures under which local authority
co-operation will be achieved. The relationship between national
and local policies will need to be clear. National policy and
advice should help to clarify the way in which housing need is
assessed, to ensure consistency of approach between local authorities
and that Core Strategies comply with national policy.
(iii) The likely effectiveness of the Government's
plan to incentivise local communities to accept new housing development
The New Homes Bonus—is the principle of incentives
a good one?
One of the main objectives of the planning system
should be to ensure that housing is delivered on the most appropriate
sites to meet the housing need which exists. A system based on
incentives risks skewing the decision making process. Decisions
on development projects may, under an incentives based system,
be taken not on the basis of proper and balanced planning decisions
in the public interest founded on planning policy, but instead
on the amount of incentives and hence financial gain which would
be generated if a development project is approved. Indeed, the
question arises as to whether the amount of incentives which would
be achieved can and should properly be a "material consideration"
in the decision making process on a planning application.
An incentives based approach also again raises the
question of regional differentiations. It is doubtful whether
a "one size fits all" approach in relation to incentives
is appropriate having regard to the different pressures in different
parts of the country because of the regional differentiations
referred to earlier. It is entirely possible that an affluent
local authority will not be sufficiently incentivised by any amount
of financial incentives notwithstanding a clearly established
need for more housing to be delivered within that authority, particularly
in circumstances where the local electorate does not welcome more
housing development. Conversely, a poorer authority may decide
to approve new housing in order to procure incentives, notwithstanding
that the housing development which would trigger those incentives
is of the wrong type or in the wrong place. In short, an incentives
based approach is open to a range of potential abuses.
The prospect of the refusal of applications in areas
where incentives are less important is a particular concern in
circumstances where the Government has signalled its intention
to restrict the right of appeal to the Secretary of State on planning
applications. In those circumstances the "downside"
for a local authority in refusing a planning application is significantly
less than at present where there is a reduced risk of a decision
being challenged on appeal. At the same time amending planning
legislation to provide that Inspectors' reports on local development
documents are no longer to be binding upon local authorities would
exacerbate the problems.
How will the incentives scheme work in practice?
It is not clear how the incentive system will work
in practice. Without more detail, it is impossible to predict
whether the system will be effective. That the Government has
so far revealed little of this detail adds to the current level
of uncertainty. There are a number of specific concerns, including
the following.
Funding the incentives
It appears to be the intention that the incentives
will be provided from central Government funds. It is unclear,
however, whether this is genuinely new and additional funding
or whether it is a "re-hashing" of central Government
funding which already exists. We would be surprised if, in the
current economic climate, genuinely new funding is proposed.
Allocation of the incentive funds
There are important questions to be answered regarding
the allocation and use of the incentive funds. At present, Council
tax revenues are split between District and County Councils. Will
the same apply in relation to financial incentives? If a District
Council is obliged to hand over part of the incentives to a County
Council, the incentive may be less attractive. On the other hand,
it is arguably appropriate that County Councils should receive
part of the incentives funding. The answer to this issue may differ
from one area to another, again indicating the difficulty of a
"one size fits all" approach.
Equally important is the question of who will decide
upon the allocation of the incentive funds received and the purposes
for which they may be allocated? There is a strong case to suggest
that the funds should be applied towards matters which bear a
relationship to the development which has generated the funding.
It would seem perverse for an authority to be able to use the
funding for matters completely unrelated to the development. Will
the local community and the elected members be made aware of the
use to which the funding is to be applied when the decision is
taken to approve or refuse the relevant development? Will the
decision to approve or refuse based on the incentives be led and
driven by employed officers of the local planning authority or
by the elected members?
All of these questions demonstrate the complexity
of any system of incentives and the detailed considerations which
will need to be grappled with if the proposal is to be pursued.
Alternative approaches
A number of alternative or refined approaches are
possible. These include the following.
Successful housing delivery could be rewarded with
priority bidding status for infrastructure funding.
Local authority performance tables could be created.
Those authorities who deliver housing at an early stage to meet
identified need calculated in accordance with national policy
could be rewarded by enhanced incentives to recognise the benefits
of early delivery.
The benefits of regional planning include providing
a policy basis on which large scale and strategic development
can be delivered. These benefits have been seen in London, through
the successful implementation of the London Plan. London, with
its elected Mayor of London, is obviously in a different category
from the other regions. It would be possible to consider rolling
out the London model, with the elected Mayor, to other appropriate
areas in England such that a new system of regional planning can
be put in place under the control of elected Mayors.
September 2010
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