Written evidence from the National Housing
Federation
1. INTRODUCTION
AND SUMMARY
1.1 The National Housing Federation represents
1,200 independent, not for profit affordable housing providers
in England. The Federation's members include housing associations,
co-ops, trusts and stock transfer organisations. They own and/or
manage more than 2.5 million homes provided for affordable rent,
supported housing and low cost home ownership, and offer an increasingly
diverse range of community and regeneration services. Our members
currently develop approximately 40,000 new affordable homes per
annum.
1.2 We have
marshalled our submission according to the headings set out in
the Committee Terms of Reference.
2. SUMMARY OF
EVIDENCE
2.1 The Federation welcomes the Government's
commitment to increased levels of housing delivery and sustainable
development. However, we are concerned that the abrupt revocation
of the RSS has created a vacuum which our evidence demonstrates
has led to the loss of thousands of planned homes.
2.2 The Federation's evidence shows:
- Independent research by Tetlow King Planning
demonstrates that local authorities have reduced housing targets
by 139,589 dwellings when not adhering to RSS figures. A high
proportion of this derives from authorities on the edge of major
urban areas scrapping urban extensions designed to meet demand
and needs substantially generated by the neighbouring authority.
- Immediately the revocation has created a damaging
policy vacuum. In the longer term it could result in a significant
reduction in housing provision and lead to less sustainable patterns
of development.
- Housing need is acute and growing with 4.5 million
people in England on social housing waiting lists and 258,000
new households formed every year.
- There is a continued need for strategic planning
to facilitate the delivery of housing and vital infrastructure
across local authority boundaries.
- Local authorities require guidance and data from
Government to help them effectively assess housing need and plan
to meet it, including through ensuring a five year land supply.
- The "New Homes Bonus" is unlikely to
result in significantly more homes if the incentives it offers
remain at the level originally envisaged.
3. SUMMARY OF
RECOMMENDATIONS
3.1 In light
of our evidence, the Federation believes the government should
act quickly to attenuate the loss of housing caused by the current
policy vacuum. Specifically, we are recommending that:
- Government should introduce a national definition
of sustainable development on which the presumption in favour
of granting planning permission can bite immediately.
- CLG should prepare and publish a list of submitted
Option 1 figures for each local authority to be used on an interim
basis as the measure against which five year land supply for new
homes can be tested.
- CLG should urgently establish a clear methodology
for how housing need (rather than demand), including for affordable
housing, can be robustly and consistently assessed.
- The New Homes Bonus should be introduced as soon
as possible. Its financial incentives, especially for affordable
housing, will have to be significantly more generous than initially
outlined for the policy to be effective.
- Local Enterprise Partnerships (LEPs) should be
charged with developing a planning and housing strategy for the
area they cover.
- Government should make clear that it expects
to see civic society and social enterprise representation on LEPs.
- CLG should publish online, and update periodically,
data and research on housing need previously collated Regional
Leaders' Boards to assist communities and councils in preparing
new local plans.
4. THE IMPLICATIONS
OF THE
ABOLITION OF
REGIONAL HOUSE
BUILDING TARGETS
FOR LEVELS
OF HOUSING
DEVELOPMENT
4.1 Government
commitment to house building
4.1.1 Government ministers have repeatedly stated
their commitment to building more homes, including affordable
homes. As Housing Minister Grant Shapps MP has stated, for this
Government, "Success will be more homes, failure will be
less homes". Furthermore the Government is committed to creating
"a presumption in favour of sustainable development".
4.1.2 This commitment is very welcome as the
current rate of house building, at 123,000 homes per year across
England, is at its lowest peace-time level since 1924. Chronic
undersupply of new homes is worsening already acute housing need.
More than 1.76 million households, or the equivalent of 4.5 million
people, were on social housing waiting lists in 2009, a 23% increase
in the last five years. Housing need will continue to rise steeply.
Government projections suggest nearly. 258,000 new households
will form every year in England from 2006 to 2026.
4.2 Revision of local authorities' housing
numbers
4.2.1 The revocation of RSS has already had a
very significant impact on local authorities' house building targets.
The National Housing Federation initially commissioned Tetlow
King Planning to investigate the impact of the letter sent by
Eric Pickles MP to council leaders on 27 May 2010 intimating the
imminent abolition of RSS. The research, conducted in July, concluded
that 84,000 dwellings had been lost from housing targets as a
direct and indirect consequence of the letter as well as refused
planning applications.
4.2.2 A partial update of this report was produced
on 3 September 2010 for Channel 4 News which concluded that the
figure had since increased to around 100,000 dwellings. As part
of the Federation's evidence gathering for this inquiry, a fuller
update of the research has been commissioned [submitted as an
appendix]. This concludes that the figure now stands at 139,589
dwellings and this is expected to rise still further. The scrapping
of large unpopular urban extensions such as around Stevenage accounts
for a high proportion of these reductions. The rest of this section
looks at the short, medium and long-term effects of the revocation
and eventual abolishment of the RSS.
4.2.3 In the short-term, the revocation of RSS
has created a vacuum in planning policy except in London, where
the Regional Plan has been retained. Outside London there is now
no tier of planning policy between the local and national levels.
In many cases the extant local policy is very dated. The coverage
of adopted Core Strategies in England stands at 17%, meaning that
83% of local authorities are still relying on Local Plans prepared
pre-2004. Indeed many were adopted more than ten years ago and
are approaching or even past their end dates. In such cases, the
RSS until recently provided the up-to-date policy basis.
4.2.4 For example the Teignbridge District Local
Plan was adopted in 1996 with an intended end-date of 2001. Not
only are the overall housing numbers and allocations effectively
superseded but it has no justified affordable housing target within
it. With the South West RSS now revoked, the Council can no longer
rely on the 35% minimum target as a base for their planning policy.
With the adoption of Teignbridge's Core Strategy still a distant
prospect, the Council has been forced to issue a Supplementary
Planning Document (SPD), but the SPD approach does not conform
to PPS3 requirements and is likely be challenged at appeal by
developers, frustrating affordable housing delivery.
4.2.5 Local authorities will now have individually
to produce evidence to replace what was provided regionally through
the RSS process. With severe public spending cuts imminent, many
will not have the resources to do this effectively, further slowing
the delivery of adopted Core Strategies or new-style Local Plans.
4.2.6 The medium and longer-term impact of the
abolition of RSS is much harder to assess. Housing demand and
need is certain to continue to increase in coming due to factors
including people living longer, staying single for longer and
a growing population.
4.2.7 Clearly RSS were unpopular in many parts
of England. However they did provide a framework for developing
strategic planning and housing policies, including facilitating:
- Debate and mediation on the quantum and broad
distribution of development.
- Co-location of new jobs to match new housing.
- Enabling major development and infrastructure
across district authority boundaries.
4.2.8 The most pressing issues facing the nation,
including the housing crisis, cannot be dealt with effectively
solely at a local level. Communities often need action at a "larger
than local" level to deliver many of the things they want,
such as transport links, new homes and flood protection. Strategic
planning can help facilitate such action through formulating solutions
to problems that must be addressed beyond neighbourhood or district
boundaries. Importantly this can provide certainty to investors
such as the infrastructure providers local communities are dependent
on to provide the development they want and need.
4.2.9 There are real dangers that recent policy
changes, including the rushed dismantling of strategic planning,
will exacerbate the chronic undersupply of new homes for the foreseeable
future. This might potentially lead in a few years time to ministers
issuing instructions to local authorities to increase their housing
targets, as the national imperative to deliver new homes becomes
ever more pressing.
4.2.10 As discussed, in general it is the significant
urban extensions, each with the potential to deliver large numbers
of homes, that are no longer being planned for. Such schemes normally
take five to ten years to deliver, requiring much co-ordination
and infrastructure planning. Having halted work on such schemes,
when councils realise that some urban extensions or new settlements
may be necessary after all, there will be a long lead-in time
to delivering these strategic schemes. In the interim housing
need will continue to escalate.
4.2.11 For a detailed description and assessment
of the impact of the abolition of RSS across England, please refer
to the attached Tetlow King Planning research.
4.2.12 With the likely reduction in development
caused by the abolition of RSS, the pro-development aspects of
the Government's vision for planning should be introduced as soon
as possible. In particular there is a clear need for a national
definition of sustainable development on which the presumption
in favour of granting planning permission can bite. Ministers
have stressed that the proposed presumption will be at the heart
of the planning system and will be a counterweight to those who
object to development. However if the definition is left to be
decided locally as part of the plan framework then there is a
real question about what happens in the period until new style
local plans emerge. There is also a risk that a locally controlled
definition will significantly restrict development in many areas.
4.2.13 RECOMMENDATION: It would be straightforward
for Government to publish in revised planning policy a definition
that can be used as a framework for the presumption in favour
of development until replaced by a local plan version. [This should
be based on the Brundlandt definition.] It will also provide a
context for local plan definitions, ensuring that they take proper
account of the housing needs of future residents.
4.3 Ensuring effective assessment of housing
need and adequate land supply
4.3.1 For the new localist planning system to
deliver sufficient new homes in the right places, it will be essential
for housing need to be robustly and consistently assessed by local
authorities (this will be particularly important in aiding any
housing and planning role LEPs assume). Once housing need has
been effectively measured, it will also be vital for councils
to have an adequate five year land supply to meet the identified
housing need.
4.3.2 Strategic housing market assessments (SHMAs)
and strategic housing land availability assessments (SHLAA), coupled
with guidance from the NHPAU, provided a relatively clear context
within which housing targets were set under the last Government.
Open Source Planning indicated that "best practice"
guidance would be issued on housing land supply. It is assumed
that this means that the existing guidance on both SHMAs and SHLAAs
will be reviewed and reissued.
4.3.3 Government has made it clear that it believes
that local planning authorities have a responsibility to maintain
a five year land supply, for housing. What has been less clear
is the foundation that should be used for assessing whether there
is an adequate five year land supply.
4.3.4 As Regional Spatial Strategies were revoked,
local planning authorities were offered guidance on the approach
that they should take to housing figures. It was noted that they
could retain the RSS figures, use the Option 1 figures or identify
an alternative. It noted that an alternative would have to be
robustly justified. This guidance was of limited practical assistance.
4.3.5 Prior to the election, Conservative spokespersons
indicated that the so-called Option 1 figures were the best proxy
for long term needs. They suggested that these represented the
"true view" of local planning authorities about the
levels of housing that they could properly accommodate. While
there is a reasonable relationship between Option 1 figures and
housing need, the match is clearly imperfect.
4.3.6 RECOMMENDATION: CLG should be tasked
with preparing and publishing a list of submitted Option 1 figures
for each authority. That should be used on an interim basis as
the measure against which five year land supply can be tested.
Either as part of a local plan, or as a separate examined policy
document, local authorities should be encouraged to bring forward
alternative proposals.
4.3.7 RECOMMENDATION: CLG should urgently
establish a clear methodology for how housing need (rather than
demand) can be robustly and consistently assessed. Assessment
should have clear and separate figures for overall levels of housing,
affordable housing, specialist and rural housing (where relevant).
New guidance is needed to assist local authorities in preparing
new local plans.
4. THE LIKELY
EFFECTIVENESS OF
PLANS TO
INCENTIVISE LOCAL
COMMUNITIES TO
ACCEPT NEW
HOUSING DEVELOPMENT—THE
"NEW HOMES
BONUS"
4.1 The Housing Minister,
Grant Shapps MP, wrote to local authorities on 10 August
2010 to outline the proposed New Homes Bonus. The letter
confirmed that a mechanism will also be developed to incentivise
development. Previously it was suggested that there will be a
matched payment from central Government for all council tax arising
from new homes being built for a period of six years. There has,
previously, been discussion of a further premium for new affordable
housing through the Bonus.
5.2 Government ministers believe that the proposed
New Homes Bonus will provide a powerful new incentive to local
authorities to build more affordable homes. The Federation welcomes
the policy of providing incentives for house building and believes
that if set at an appropriate level, the New Homes Bonus could
help increase housing supply.
5.3 However the level of potential reward for
local authorities originally proposed is unlikely to be sufficient
to convince many local authorities to accept more homes. We have
particular concerns that affordable housing may be disadvantaged
relative to open market housing by the New Homes Bonus. The proposed
premium for affordable housing is welcome, but the additional
25% envisaged will not be enough to encourage financially squeezed
local authorities to develop affordable rather than more expensive,
higher council tax band open-market housing, which will produce
more revenue due to the council tax "taper".
5.4 Initial modelling by the Federation indicates
that even with a 25% premium, councils would have to build two
affordable Band A homes to generate as much income from the council
tax and additional incentive than what they would generate in
council tax alone from just one Band F executive home. Band F
homes will also provide a better long-term income stream, because
when the incentive bonus runs out after six years, the Band F
executive home will generate more income than the two affordable
homes put together.
5.5. Potential revenue generated through New
Homes Bonus for new affordable homes will also constitute, at
least initially, a tiny proportion of local authorities' overall
potential income, making it unlikely that it will prompt them
to deliver many more affordable homes. Although the potential
incentives are more significant as a proportion of overall local
authority income for district than unitary authorities, they will
not be particularly attractive for either. Many councils will
prefer to forgo income or make savings elsewhere rather than lead
in the delivery of new, and potentially locally unpopular, affordable
housing.
5.6 RECOMMENDATION: As the New Homes Bonus
is intended as a primary means of increasing the delivery of new
homes, it should be introduced as soon as possible and certainly
no later than the start of the next spending review period in
April 2011. Further delay could perversely result in a decline
in new homes as councils postpone planning permissions to ensure
they get maximum benefit from the New Homes Bonus. The incentives
will also have to be made more generous than initially outlined.
In particular the premium for affordable housing should be significantly
increased to reflect the higher potential revenues councils can
earn through more expensive open market homes.
5. LOCAL ENTERPRISE
PARTNERSHIPS (LEPS)
AND THE
DUTY TO
CO -OPERATE
5.1 Government's has abolished Regional Spatial
Strategies in line with its manifesto commitment. However as discussed
there remains a need for a "larger than local" strategic
planning function if a wide range of community and local authority
aspirations are to be fulfilled.
5.2 The letter sent by BIS and CLG to local authority
leaders on 29 June set out the potential role of Local Enterprise
Partnerships (LEPs) in providing strategic leadership in their
areas and determining local economic priorities. The letter suggested
LEPs' remit would include planning and housing, local transport
and infrastructure priorities and employment and enterprise.
5.3 The
Federation is pleased that Government envisages LEPs developing
a strategic housing and planning role. This has the potential
to help deliver many of the Government's objectives relating to
economic development and related housing provision, as well as
the environment, infrastructure and sustainable development.
5.4 Although
there is little detail on how the proposed duty for local authorities
to co-operate would be framed, the Federation supports it in principle
for its potential to assist in facilitating joint strategic planning
and action.
5.5 RECOMMENDATION: LEPs should be charged
with developing a planning and housing strategy for the area they
cover. This strategy should make an assessment of housing need,
including for affordable housing, across the LEP area and set
out how the partners intend to meet it. Such strategies need not
result in any loss of local control—they would be agreed
on a consensual basis between LEP partners—but once agreed
should be binding. The LEP should have some powers to aid cooperation
over implementation once the plans are agreed.
5.6 Whilst
the Federation agrees that strong business support for LEPs is
essential, we also believe that civic society and social enterprise
should be represented on LEPs. It would be inconsistent with the
Government's stated aim of building a "big society"
if such organisations, which include housing associations, were
not included in these partnerships, not least because they have
a leading role in delivering housing and other key objectives.
5.7 RECOMMENDATION: Government should
make clear that it expects to see civic society and social enterprise
representation on LEPs.
6. RESEARCH AND
DATA COLLATED
BY LEADERS'
BOARDS
6.1 Open
Source Planning proposes that a "truly local plan, built
out of a process of collaborative democracy" should be the
"centrepiece of the local planning system". It promises
that local people will be empowered to shape these plans as Government
mandates all local authorities to use collaborative democratic
methods in drawing up these local plans.
6.2 To
ensure new local plans are based on sound evidence, Open Source
Planning advocates a requirement for "the provision of good
data by the local planning authority to the electors in the neighbourhoods,
so that they can develop their vision for their community on a
well-informed basis (this will need to include analysis by the
council of the likely need for housing and for affordable housing
for local people in each neighbourhood)". However local authorities
will not be able to adequately equip local communities to effectively
plan to meet their housing and other needs without the provision
of good data.
6.3 RECOMMENDATION: CLG should therefore
make freely and easily available data and research on housing
need collated by the now-abolished Regional Local Authority Leaders'
Boards. Publishing this information online for local authorities
and anyone else with an interest would be consistent with the
Government's commitments on transparency and accountability. CLG
should also commit to updating the data and research that could
help communities and councils develop evidence-based new local
plans.
September 2010
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