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

Written evidence from the House Builders Association (ARSS 69)


Abolition of Housing Targets

the effects of revocation of RSSs are of more immediate concern to housebuilders than the abolition of regional targets;

short term, the effects of the credit crunch are more significant than target numbers; and

longer term, 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". Planned numbers will probably be reduced in many places, requiring this compensating flexibility in policy.

Revocation of RSSs

the abrupt revocation of RSSs has left a planning vacuum, which will obstruct viable planning applications in many places; and

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

New Homes Bonus

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

it is equally important that Ministers address development viability in addition to incentivise local authorities. If houses cannot be built profitably the bonus will not be achieved by local authorities.

Local Enterprise Partnerships

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

they currently seem to be driven by concerns about local authority groupings rather than their purpose and goals determining their geographic boundaries; and

They should be statutory consultees on cross-border matters, particularly infrastructure.


In the short term, the policy vacuum left by the revocation of RSSs is of greater concern to housebuilders than the longer-term effects of the abolition of regional and other targets. Discussions about housing numbers at RSS level and the work done by bodies such as the NHPAU have changed the terms of the debate significantly over the last decade and the need for substantial numbers of additional houses is now widely accepted across the political spectrum; even if not in the locations where it is most needed.

It would be easy to claim that the abolition of regional targets will result in lower housebuilding levels, but that would be to ignore market realities in which, at present and, for the immediate future, housebuilding levels are determined by the effects of the credit crunch, economic uncertainty and mortgage shortages.

It is, therefore, fair to claim as Ministers have, that planning targets do not build houses. However the absence of adequate targets can, and has in the past, restricted housebuilding output to below market demand levels. Thus targets are important. The issue for the future, without top-down targets, is to ensure that artificially low figures cannot simply be substituted at local level without proper evidence and without any sanction.

The Coalition Government, as well as introducing new planning legislation, intends to seek Parliamentary approval for National Planning Guidance.

We hope this will determine how far local authorities will be free to reduce numbers, the evidence required to justify numbers and whether housing numbers are to be the sole criteria for policy in local plans and for testing planning applications, or whether other more flexible, criteria-based policies will be encouraged as well (eg whether a particular planning application involves sustainable development and it does no harm to the objectives of the plan).

While it seems very likely that the policy targets in many high demand areas will be reduced, it will depend on the nature of planning guidance issued whether those numbers are absolute constraints (i.e. a ceiling not to be exceeded) or just one measure amongst others for determining planning applications and hence housebuilding output.


The revocation of RSSs was clearly foreshadowed in the Conservative Party's policy documents before the General Election and is also set out in the Coalition Agreement. It was therefore not a surprise. However what has surprised and greatly concerned housebuilders is the way revocation occurred, with seemingly inadequate attention being paid to the need for transitional guidance.

The result has been an abrupt withdrawal of adopted and emerging plans by some local authorities, which has created a planning vacuum in many places and left housebuilders without the planning framework or plan backing required to make planning applications. This will both disrupt medium-term flows of land in the development pipeline and also block opportunities for smaller sites that could come forward for development now.

There is a wealth of evidence of the range of local authority responses to revocation. Tetlow King carried out an initial survey for NHF and DPDS (planning consultants) have published a further survey of local authorities in the South West. Through its members, published sources and other contacts, HBA has compiled a short summary of responses from a range of local authorities across the country (attached).

These sources reveal four broad categories of response by local authorities:

1.  business as usual; continued support for Core Strategies based on RSS has tended to be the response in areas seeking regeneration mainly, not but exclusively, in the Midlands and North but including areas such as Dover while, in the same county, Ashford has suspended its Core Strategy;

2.  existing approved or emerging Core Strategies suspended, without any indication what the result will be or when;

3.  suspension in order to change policy—generally assumed to mean a reduction in housing numbers; and

4.  suspension whilst waiting for guidance from Ministers.

These last three are not mutually exclusive, often two are cited.

In order to provide, insofar as possible in this difficult market, confidence that the planning system still supports the development of much needed homes, as well as the economic and employment benefits of building new homes, housebuilders had expected that Ministers would have provided:

a smooth and effective transition to the new system; and

instructions as to the evidence base and process required to make change.

The lack of effective interim guidance has two particularly important consequences. First, housebuilders will lack the confidence to make planning applications during this hiatus and for as long as there is no enforceable timetable to end it.

Second, the transition to a new system could last for at least four years, if local authorities, in the absence of anything to force their hand, continue to suspend local plans until the proposed new planning system completes its Parliamentary process and comes into effect (April 2012). This would then be followed by at least two years to produce a replacement plan. Planning for housebuilding cannot be left in limbo for that length of time.

To enable the plan-led system to function and to provide a framework for planning applications, Government needs to provide local authorities with an indication of:

the timescale, preferably short, in which to make whatever changes they want to their plan;

in turn, Government should remove any doubts about possibly redundant work due to subsequent policy changes in eg the "Localism Bill";

the evidence base that will be required for any proposed reduction in numbers previously in policy;

other tests of soundness eg, if reverting to old or saved plans, how out of date can they be; and

sanctions if the local authority keeps the plan in suspension.

It is, of course, apparently in conflict with the freedoms the Government intends to allow local authorities under its localism agenda to impose any such requirements.

However, allowing a hiatus which could possibly to last a considerable period, is also totally at odds with the Government's own stated aim of securing high levels of housebuilding. Regardless of Ministers' dissatisfaction with the target-led system, this cannot be switched-off overnight without effective and workable arrangements, leading into the new system which will only start to be fully operational in 2014.


We note and welcome the publication of the Government's letter of intention to incentivise local authorities to build new homes. This is their proposed long-term antidote to the likely NIMBY-ism that would result from unchecked localism. We understand that local authorities can start to accrue the bonus from the next financial year which, in theory, should encourage them to start granting planning permissions now for building completions next year.

We understand that the system is intended to be financially neutral, being funded from an overall reduction in grant funding to local authorities (the penalty), such reduction acting as an incentive to build homes to secure the bonus.

However, although we can reasonably estimate the size of the bonus (eg if a local authority allows 500 homes to be built with a community charge averaging £1,500, it will receive £750,000 in year one and £4.5 million by year six; a total of £15.25 million in six years), we do not yet know the scale of the penalty. Thus it is impossible to judge its likely effectiveness at this stage although the views of local authorities will be more relevant than ours.

However two points need to be made, reflecting matters of direct concern to housebuilders. First, Ministers will need to make clear in discussions with local authorities that the New Homes Bonus is part of a package of financial arrangements attaching to new homes, including CIL and S.106, if they are to understand the scale of incentive on offer. Second, in the current climate, with new house prices still 20% below 2007's peak, the value of that package cannot be made too great or development viability will be further damaged. This requires that development viability be put at the heart of planning and that local authorities are issued with viability toolkits.

So, while incentivising local authorities is one side of the coin, the other must be to reduce the burden of costly regulation which has been placed on housebuilders in recent years and which is now an obstacle to development. Incentivising local authorities by reducing their grants will be deeply unpopular with councillors and local communities if housebuilding does not increase, because homes cannot be built profitably. Government must therefore give as much attention to the problems of development viability as to the New Homes Bonus scheme, if it is to work in the marketplace.

A consequence of abolishing regional level planning is the possible impact this could have on planning for the type of sustainable, low carbon energy supply that is critical to the achievement of zero carbon homes. Our work on this with major energy suppliers has highlighted this question and we believe that the loss of this aspect of regional level planning is deeply regrettable and that it is unlikely to be replicated under localism. We therefore believe that emerging Government proposals, as outlined in Grant Shapps Statement of 27 July, on the definition of zero carbon and to create carbon buy-out mechanisms, could also usefully incentivise local authorities. By supporting new build, local authorities could also obtain funding from this source to help them meet their own carbon reduction targets, either eg by retrofitting existing stock or building up funds for district level or other large scale energy schemes.


Too little is known about LEPs to comment sensibly at this stage but it is worth noting the wide variety of responses by local authorities (some of which are appended) and the pertinent comment in LGC which said that, "in recent weeks it had become increasingly clear that in some regions councils were involved in increasingly fractious disputes about who they ought to partner with as they put LEP proposals together ahead of the 6 September deadline". It was concerned that, the more they became bogged down in arguments about geography, the less time they were spending on thinking through what a LEP should be for.

Generally, LEPs should not be single authorities as that will result in too many to be effective: they should have a key role in advising on cross-boundary problems, particularly infrastructure and large scale development, and that the LEP should be a statutory consultee on development plans and major planning applications, which have cross-boundary impacts.

September 2010

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