Written evidence from Denton Wilde Sapte
LLP (ARSS 100)
SUMMARY
1. The RSS system responded to a need for strategic
spatial planning and was broadly fit for purpose. Its wholesale
abolition discards significant evidence-based policy and investment
by public, private and third sectors and undermines private sector
investment in house-building.
2. The transitional and replacement measures
in relation to the role of the planning system in mediating housing
supply are unclear and the proposed incentive system is unlikely
to achieve its stated objective.
3. Although the planning system is likely to
become more contentious as a result of the mismatch between demand
for housing and local desire to approve it, the policies that
will guide decisions made on appeal are in doubt. As a result,
there is a real risk that investment in new solutions to housing
stress will not occur.
4. We suggest that reforms to the development
plan system should (paragraph 2.8, below):
(a) require local policies to assess and address
housing stress;
(b) ensure there is a strategic framework for
local decision-making; and
(c) operate with the benefit of clear, detailed
national guidance on the:
(i) presumption in favour of sustainable development
where the local development plan is out of date; and
(ii) approach to be applied by decision-makers
where there is either no or inadequate evidence of adequate housing
land supply.
EVIDENCE
1. Implications of the Abolition of Regional
House-Building Targets for Levels of Housing Development
Purpose of Targets
1.1 The Regional Spatial Strategies were intended
to provide a framework for private investment and public sector
planning. RSS policies provided an evidence-driven, strategic
focus for spatial planning decisions. The need for a regional
tier of policy arose as a result of the difficulties experienced
by local planning authorities in both dealing with strategic applications
and putting in place a coherent planning framework to deliver
major urban extensions. The RSS system was welcomed, initially,
by both the development industry and third sector agencies with
interests in conservation, sustainability and social justice.
1.2 Annualised house-building targets were intended
to:
reflect evidenced housing need in defined Housing
Market Areas;
address significant historic shortfalls in housing
delivery holding back economic growth and affordability;
meet projected demand for new households in Housing
Market Areas;
effectively compel planning authorities to identify
and allocate appropriate levels of land for managed growth in
line with strategic spatial planning objectives; and
assist local planning authorities and cross-boundary
agencies in planning for growth and supporting investment in a
"joined-up" way.
1.3 The Coalition Government recognises that
growth in projected households has consistently exceeded housing
supply over previous decades and has resulted in an unmet need
for housing. The Minister for Housing suggested, in his answers
to the Committee on 13 September 2010, that the RSS system had
failed to address that problem.
Fitness for Purpose
1.4 The RSS evidence-gathering and testing process
included public examination by appointed experts and public consultation.
The "examination in public" provided an effective and
fair opportunity for public involvement in the process. Aside
from objections to the principle of development per se,
annual targets proved controversial because they were very often
increased at a late stage in the adoption process by central government.
These changes were often driven by a policy-based desire to meet
the demographic and econometric requirements identified in the
CLG evidence base.
1.5 The way in which the RSS system was operated
therefore exacerbated public perceptions that targets were either
arbitrary or set without proper regard to environmental and other
constraints. In many cases, the Secretary of State's "Proposed
Changes" to the levels of annualised housing delivery recommended
by the appointed Panels was in fact still substantially less than
needed to meet the evidenced need. Research suggests that even
if the RSS targets had been delivered, housing affordability would
have deteriorated markedly by 2026 in all regions apart from the
North East.[136]
1.6 The principal peaks in volume house-building
of the last 100 years were driven by the Wheatley Subsidy and
the large-scale public sector programmes of the 1960s. The RSS
framework, backed by the house-building target, provided an equivalent
stimulus to achieve a market-led step change in delivery during
a period where public funds will become increasingly scarce.
1.7 Substantial public and private sector investment
and third sector participation has already been committed to:
representations to the Panels appointed to consider
the evidenced need for strategic growth, and to the Secretary
of State;
engagement in the Local Development Framework process
geared to meeting RSS objectives; and
land acquisition, scheme design and negotiation to
meet RSS objectives.
1.8 The RSS system offered the potential to convert
substantial public and private sector preparation over the past
decade into:
a strategic approach to planning for, and distributing,
development to meet social needs; and
a more certain environment for both public and private
sector investment.
1.9 Although the RSS system posed questions about
the timing of, and responsibility for, accompanying infrastructure
delivery, it nonetheless provided a framework for the principle
of, and broad locations for, growth. As such, it represented stimulus
to investment that would have been broadly cost-neutral to the
public sector over the next development cycle.
1.10 In our view, the RSS system was broadly
fit for purpose and met a need for a coherent spatial strategic
planning framework capable of providing greater certainty and
efficacy of delivery for those requiring housing, those delivering
it and those affected by decisions on its location and form. The
RSS system was in fact coming into effect at the point it was
abolished, as adopted or emerging policies for growth came to
be applied to appeal decisions submitted in the 12 months before
abolition (relating to schemes designed to respond to the need
identified, and the framework set, by the RSS). Since abolishing
this tier of the development plan system, the Secretary of State
has overruled planning Inspectors advice to dismiss proposals
for around 3,500 homes.
Consequences of Abolition
1.11 The Minister for Housing described the abolition
of the RSS to the Committee on 13 September as the most significant
governmental intervention in support of house-building since the
Second World War. He suggested that house-building quantum will
be the 'gold-standard' against which the success of the new system
should be judged.
1.12 Conversely, the abolition of the RSS system
is, in our view, a surprisingly wholesale and retrograde step
which negates the value of significant professional input and
expenditure from the public, private and third sectors. It has
already had the effect of undermining the willingness and ability
of the development sector to apply its creative and financial
resources to deliver housing at a time when it is at a record
low.
1.13 We believe that the post-RSS environment
is a significantly more difficult one in which to deliver housing,
due primarily to uncertainties about:
what scale of housing need is recognised in planning
policy and what weight it should be given by decision-makers (particularly
on appeal);
how strategic infrastructure will be funded and delivered;
and
the role of, and guidance to, the Planning Inspectorate
for determining housing appeals in the context of out of date
development plans, housing stress indicators, inadequate delivery
and local opposition to development.
1.14 We consider it likely that house-building
quantum will suffer significantly as a direct result of the abolition
of the RSS, the lack of a transition regime and the inadequacy
of the proposed public sector stimulus package. Third sector organisations,
such as Friends of the Earth, have also raised wider concerns
about the risks of piecemeal development and outdated environmental
policies.
1.15 The ability of the post-RSS system to deliver
homes for future populations as well as the "local homes
for local people" referred to by the Minister for Housing
as the objective of the new arrangements will be its crucial test.
It is difficult to see how a radical increase in delivery can
be achieved without a clear framework that enables investors to
commit resources to opportunities and engaging local people in
the design process. Without the certainty provided by the RSS
system, the development process is likely to become more contentious.
The Minister of State for Decentralisation acknowledged in addressing
the Committee on 13 September that there is entrenched resistance
to development in many areas. That reflects the need for a genuine
debate about the quality of many schemes, but also, in many cases,
a resistance to the principle of development by existing residents.
There is a real risk that parochial approaches will not only be
unable to deliver the step change in provision necessary to address
current and anticipated deficiencies in supply, but that they
will actively prevent it. As such, we believe that investors are
turning away from both projects and areas that now represent unquantifiable
or highly uncertain risks, with wider implications for the delivery
of housing and its associated economic benefits.
1.16 The Localism Bill will address some of these
issues, but will inevitably raise as many questions. As such,
the level of uncertainty is likely to increase. We believe the
following are of particular relevance to the Committee's Inquiry:
the environmental, social and economic consequences
of a strategic planning "gap" over the next two to five
years;
the likely effect on investment and housing stress
in localities, districts and counties that are unwilling or unable
to create a clear alternative framework for appropriate growth;
the economic and social consequences of piecemeal
delivery or no delivery at all;
the implications for development plan documents already
adopted on the basis of RSS adopted or emerging levels of provision;
and
the economic cost to the development sector of land
acquisition based on adopted Government policy withdrawn without
sector consultation (and the knock on effect on both investor
confidence and housing delivery).
2. Likely Effectiveness of the Government's
Proposed Incentives
"New Homes Bonus"
2.1 The extent to which the Government proposals
remain in draft represents a key barrier to investment in strategic
land for housing. Currently, the only clear proposal for incentives
is that announced by the Minister for Housing on 12 August 2010.
We understand that the "tax-matching" scheme will be
limited to six years and introduced through the forthcoming Comprehensive
Spending Review. The Minister for Housing confirmed before the
Committee on 13 September that:
(a) no assessment of the number of homes likely
to be delivered as a result of the tax matching scheme has been
carried out
(b) the only "Plan B" for the tax matching
scheme, should local resistance to meeting housing need outweigh
the (in our view, limited) financial incentive to approve applications,
is to increase the level of matching.
2.2 An authority approving a development of 100
band D homes would, on the basis of current figures, be able to
recover an additional £8,400 per house over six years. In
our view, far from being a "powerful incentive", this
is unlikely to incentivise local decision-makers to approve proposals
that conflict with strongly-held local views on the principle
of development. It will almost certainly not persuade those already
living in locations that would be affected by growth to accept
it. The bonus also raises the question of whether the demonstrable
financial benefits of development should be given greater weight
than local opposition to it.
2.3 There is a real risk that new arrangements
displace the democracy of decision making by elected representatives
using the expert advice with a system that may prioritise sentiment
over sense.
Policy vacuum
2.4 The majority of development plans are out
of date. The presumption in favour of appropriate forms of development
in Planning Policy Statement 3 has assisted with the determination
of strategic housing proposals during the past few years in which
an unnecessarily complex and time-consuming local development
framework process has made it difficult to operate a plan-led
system.
2.5 Given the inevitable delay in legislating
for and implementing a new system, clarity is needed on the proposed
presumption in favour of sustainable development in the absence
of up to date development plans should be clarified at the earliest
opportunity, including the publication of clear guidance to local
authorities and the Planning Inspectorate for applying the criteria.
2.6 The Minister of State for CLG suggested,
in his answers to the Committee on 13 September, that the significance
of the five-year housing land supply set out in Planning Policy
Statement 3 will continue. He suggested that rigorously prepared
housing land supply calculations would "trump" local
opposition. Given the chilling effect that the abolition of the
RSS (and the anticipated cancellation of other planning guidance)
has already had on housing delivery, this should be confirmed
in the Localism Bill and interim guidance.
Key Issues
2.7 We believe the Committee's Inquiry should
consider the following:
the likely consequences of successful local opposition
to all forms of major house-building over the next five to 10
years, in particular the cost and timing implications of the majority
of strategic housing decisions being determined at appeal;
the experience gained from the implementation and
cancellation of the Housing And Planning Delivery Grant in attempting
to incentivise delivery;
the affordability of tax matching proposals and the
effect of switching housing revenue account funding between different
areas;
whether reliance on public funding to deliver housing
in the current climate is likely to be successful and represents
a cost-effective use of public resources compared to the system
of regional targets; and
the extent to which the lack of a transitional arrangement
within which investors can operate is likely to affect housing
stress.
2.8 If the statutory
development plan is to be a more concise and less prescriptive
document, we believe it should still have the following characteristics:
a duty to:
assess requirements for housing in consultation with
local people and providers (including identifying the appropriate
housing market area); and
publish an annual housing stress report.
a requirement to:
reflect housing stress indicators;
reflect strategic housing market and housing land
availability assessments which have been separately reviewed by
an independent examiner and following public consultation;
make provision for at least 10 years' housing supply
through (part of which is clearly deliverable in the short term
and part of which is realistically developable in the medium term);
and
where housing stress is sufficiently bad, to ensure
a five year supply of available and deliverable sites.
include clear "sustainable development"
criteria that protect the local interest in the quality of design
and masterplanning.
2.9 The Government should clarify the following
as a matter of urgency:
what housing need and supply data local authorities
should use until they put new development plans in place;
how housing needs assessments will be tested to ensure
they are "robust"' and what criteria should be applied
in developing them;
how the Planning Inspectorate should consider housing
land supply issues where the development plan is out of date;
the criteria for approving sustainable development
which will be applied in the absence of an up to date development
plan;
the role of Empty Dwellings Management Orders in
bringing empty private sector properties into effective use as
social housing to increase supply without increasing the existing
development footprint; and
how strategic infrastructure will de delivered to
match growth proposed by local administrations and when.
September 2010
136 More Homes for More People: Advice to Ministers
on housing levels to be considered in regional plans (National
Housing and Planning Advice Unit, September 2009). Back
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