Abolition of Regional Spatial Strategies

Memorandum 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 14th 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 of the Submission by Fairview New Homes

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

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