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

Written evidence from the Planning and Development Association (PDA) (ARSS 137)


Revocation of Regional Spatial Strategies

The effects of revoking RSSs are of more immediate concern than abolishing regional targets;

longer-term, planned numbers will probably be reduced in many places; guidance is needed on how to produce policies with housing numbers that are not maxima and which allow them to be exceeded if proposed development does no "harm";

the sudden revocation of RSSs left a planning vacuum, which is deterring developers from submitting planning applications in many places; and

the new planning system will not be operational for up to four years, so interim guidance is needed to prevent a lengthy hiatus in planning for housebuilding.

Community incentives to accept new housing

the impact of the New Homes Bonus will be difficult to judge until the scale of grant reduction is known; and

if houses cannot be built profitably the Bonus will not be achieved by local authorities, so it is equally important that Ministers address development viability as well as incentivising local authorities.

Co-operation between local authorities and Local Enterprise Partnerships

currently LEPs seem to be driven by the need to agree local authority groupings rather than their boundaries being determined by their purpose and goals;

LEPs should be statutory consultees on cross-border matters, particularly infrastructure; and

there should not be too many LEPs and they should be sufficiently strategic in scale.

Implications of the abolition of regional housebuilding targets for levels of housing developments

The policy vacuum left by the revocation of RSSs is having more impact on developers currently than the longer-term effects of the abolition of regional and other targets. The need for substantial numbers of additional houses is widely accepted across the political spectrum as a result of discussions about housing numbers at RSS level and the work done by bodies such as the NHPAU over the last decade. However it will remain difficult to persuade people in the locations where it is most needed of this case.

Housebuilding levels are determined by the effects of the credit crunch, economic uncertainty and mortgage shortages at present, not by the existence or otherwise of regional targets.

Nevertheless targets are important and their absence can, as has been the case in the past, restrict housebuilding output to below market demand levels. Without top-down targets, excessively low figures should not be allowed to be substituted at local level, without proper evidence and sanction.

New national planning guidance approved by Parliament should determine how far local authorities will be free to reduce numbers; the evidence needed to justify numbers and whether these are to be the only test for local plan policy and for determining planning applications, or whether other more flexible, criteria-based policies will be encouraged (eg whether a particular planning application involves sustainable development and it does no harm to the objectives of the plan).

It seems inevitable, because that is the wish of many local authorities, that the policy targets in many high demand areas will be reduced. However it will depend on the nature of planning guidance issued whether those numbers are ceilings that cannot be exceeded or just one amongst other measures against which planning applications are judged and hence housebuilding output.

The revocation of RSSs

The revocation of RSSs was not a surprise because it was clearly indicated in the Conservative Party's policy documents of 2009 and was confirmed in the Coalition Agreement. However of great concern has been the inadequate attention that has been paid to the need for transitional guidance following that revocation.

The sudden withdrawal of draft and adopted plans by some local authorities has created a planning vacuum in those areas and left applicants without a planning framework or any plan backing against which to make planning applications. This will both disrupt the pipeline of land that is always required to maintain development and could also prevent smaller sites that could come forward from doing so.

Our members' experiences suggest that local authorities have responded in a number of ways:

the suspension of existing approved or emerging Core Strategies and other development plan documents;

suspension of work on plan documents in order to change policy - generally assumed to mean a reduction in housing numbers;

suspension of policy development pending further guidance from Ministers; and

continued support for Core Strategies based on RSS often, but not exclusively, in areas in the Midlands and North that are seeking regeneration.

It had been expected that Ministers would provide advice to secure a smooth transition to the new system, including instructions on the process and evidence base required to change existing plans. This is vital because it provides confidence that the system will continue to support the development of much needed homes as well as the economic and employment benefits of housebuilding.

An essential element in any such guidance is the status of five and ten to fifteen year land supply and how this should be calculated on up-to-date data. Moreover, the evidence base to which new plans refer must be kept up to date and, following the abolition of NHPAU, local authorities will need a consistent source of data to produce equitable results between authorities. Ministers do not appear to have considered this or to regard it as necessary.

Without adequate transitional guidance developers currently lack confidence to make planning applications and this is likely to continue for as long as there is no enforceable timetable to end it.

Furthermore, if local authorities continue to suspend plan-making until the new system comes into effect (probably in April 2012) the transition could last for at least four years because replacement plans will take at least another two years to produce. Planning must not be left in suspension for such a long time.

To allow the system to function and to provide a framework for making planning applications, Government must provide local authorities with an indication of the time within which they must make changes to their development plan (preferably short); remove doubts about work that may be redundant because of changes in legislation (the Decentralisation and Localism Bill); set out the evidence base required for any reduction in housing numbers in local plans and set out other tests of soundness and sanctions if the work on development plans continues to be suspended.

The Government has undoubtedly created problems for itself in respect of such guidance because it may conflict with the "localism" agenda and the freedom it wishes to grant to local authorities.

But a lengthy planning hiatus also conflicts with the Government's aim of delivering high levels of housebuilding. However much Ministers may dislike the existing system, it cannot be summarily halted without publishing effective and workable arrangements that both local authorities and applicants understand.

The effectiveness of the Government's incentives plan and its nature and level if an adequate long-term supply of housing is to be secured

Since the New Homes Bonus is intended to change the attitude of local authorities and communities to development it is the essential accompaniment to revocation. It is vital that full details are published as soon as possible, because too little information is available to allow judgements to be made about its likely effectiveness.

We understand that the Bonus can be accrued by local authorities in the next financial year so they are being encouraged to grant planning permissions now to benefit from completions in 2011.

The system is understood to be financially neutral, funded from a reduction in grant funding to local authorities, with this acting as an incentive to build homes in order to secure the Bonus. We do not yet know the scale of grant reduction that local authorities will suffer to allow us to judge whether six years of additional community charge receipts will be sufficient to overcome objections in the most NIMBY areas.

To fully incentivise them, Government must make it clear to local authorities that the Bonus is part of a package of arrangements, including Section 106 and the Community Infrastructure Levy, which will be attached to the development of new homes.

However, given that new house prices are still 20% below their 2007 peak the amount local authorities can take should not be so great as to further damage development viability. This issue must be central to any new policy and local authorities must be assisted and required to understand it.

It is not just local authorities that require incentivising. Developers need to see a reduction in the heavy and expensive burden of regulation which is now a major obstacle to development. Unless housebuilding levels can be increased, simply incentivising local authorities will be deeply unpopular with councillors and local communities because the anticipated revenues will not be received. As much attention must be given to the problems of development viability as to the New Homes Bonus, because otherwise it merely reduces local authority grants.

Co-operation between local planning authorities on matters formerly covered by regional spatial strategies and the suggestion that Local Enterprise Partnerships may fulfil a planning function

Very little will be known about Local Enterprise Partnerships until after the Spending Review on 20 October. They are supposed to provide strategic leadership and set out economic priorities, creating the right environment for growth by tackling issues such as planning and housing, local transport and infrastructure but it is not clear how they will fulfil the planning function envisaged by BIS and CLG, if all such powers reside at local level.

BIS/CLG also said that Partnerships should include groups of upper tier authorities and could match regional boundaries if they chose to do so but the 56 bids submitted are all much smaller and a number reflect county boundaries.

If they are to fulfil an effective sub-regional planning function and work together on matters formerly covered by Regional Spatial Strategies they must not be so fragmented that they cannot offer adequate strategic direction; it is difficult to imagine that such small groups can be genuinely business-led and focused on sustainable economic growth.

There have been 56 bids submitted, far too many to deliver strategic leadership at sub-regional level. When assessing the bids Government must seriously consider whether they do cover meaningful economic areas and have genuine critical mass—many business leaders fear they will turn out to be no more than council-dominated talking shops with no sense of strategic priorities and little economic impact. A further significant factor is whether there will be sufficient funding for them to carry out any meaningful duties and, again, this will not be known until after the Spending Review in October.

LEPs should have a key role in advising on cross-boundary problems, particularly infrastructure and large scale development, and should be a statutory consultee on development plans and major planning applications, which have cross-boundary impacts.

September 2010

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Prepared 31 March 2011