Abolition of Regional Spatial Strategies

Memorandum from Pegasus Planning Group Ltd (ARSS 38)

Summary

· The abolition of regional house building targets will result in significantly lower and inadequate levels of development being planned for in future through a locally determined single tier development plan system.

· The delivery of new development, particularly in the short term, will be impeded, resulting in a reduction in the availability of both general market and social housing, which will, in turn, increase and compound problems of homelessness, increase the number of concealed households, restrict labour mobility thus stifling economic growth at a time of economic recovery and inhibit the general ability to move home thus reducing tax revenues received by the Government from the housing market, such as Stamp Duty & VAT, and leading to some households remaining in unsuitable accommodation.

· Strategic, non-local issues will not be adequately covered by a locally determined single tier Development Plan system, based upon the current structure of Local Government in England.

· The Coalition Government needs to be clear on the nature and timing of the proposed radical reforms to the Planning system and any transitional arrangements in light of the abolition of the regional strategies.

Introduction

Pegasus Planning represents a number of developers and landowners, including the majority of national volume house builders. Pegasus has participated in the preparation of most of the regional strategies on behalf of our clients.

Implications of the Abolition of the Regional Spatial Strategies

The Coalition Government’s revocation and proposed abolition of the regional spatial strategies, through the Decentralisation and Localism Bill, will have significant implications for house building in England, particularly at a time when there is a paramount need for a continued and sustained economic recovery, if the economy is to avoid falling into a ‘Double Dip’ recession, and an urgent requirement to address the current housing crisis. [1] [2] House building in England is at a historically low level [3] , particularly since the start of the ‘Credit Crunch’ in 2008. [4] Affordability for first time buyers in terms of their ability to pay is, if anything, getting worse. Accessibility to both the market and social sectors has dramatically contracted while house prices generally remain high or continue to rise. [5] [6]

Pegasus have analysed housing land supply in the South West region [7] . This research highlights that, even under the Regional Strategies, many local authorities were calculating their housing land supplies against the lower figures in the Draft RSS. Even then a number of authorities had less than a five year supply of housing, despite the advice in PPS3 para 6. [8]

The house building and development sector has a key role to play in securing future economic growth and providing sufficient dwellings to help ensure that the various housing needs and demands arising from social and demographic change in England, expected to occur over the coming years, are adequately met in a timely manner. The declining household size and the ageing population add further pressures on the national housing stock. [9] [10] The latest ONS Population and Households Projections highlight the scale of the problem facing the Coalition Government, Local Planning Authorities, the development industry and others to ensure that ‘everyone has the opportunity of living in a decent home, which they can afford, in a community where they want to live’. [11] [12]

The importance of the private sector in resolving the current housing crisis will increase given the reduced public sector housing programme expected following the Comprehensive Spending Review October 2010. Therefore, a predominantly private sector oriented solution will be required to deliver a sufficient scale of development required to meet projected housing needs and demands, as evidenced locally in the Strategic Housing Market Assessments and nationally in the ONS projections and estimates.

Pegasus note the views expressed by the NHPAU [13] , regarding recovery from a dramatic drop in housing output and long term assumptions about the scope for output growth. The NHPAU predict a massive under delivery of housing which will further amplify the structural long term under supply of housing in terms of pent up demand and market volatility.

The work of the former NHPAU should be continued by CLG to assist local authorities and others by providing an authoritative source of information and research, especially on affordability to save time and money and avoid ‘re-inventing the wheel’.

It remains a principal aim of the Government to secure the necessary "Step-Change" in housing delivery, through a new, more responsive approach to land supply at the local level, as reaffirmed by the Coalition Government in June 2010. [14] [15] The Minister for Housing, Grant Shapps MP is on record setting out the Coalition Government’s ambition to ‘build more houses than the previous Government.’ [16] It is difficult to see how this will be achieved when the major development proposals, which formed the "back bone" of the Regional Strategies housing delivery trajectories, are now delayed and their futures uncertain in the short term, particularly in the absence of any robust transitional arrangements.

The revocation of the Regional Strategies and their eventual abolition, will seriously undermine the delivery of housing, particularly in Southern England, and undermine developer confidence by removing the "certainty", fundamental to smooth and effective operation of the ‘Plan led’ system. Maintaining certainty is critical for developers if they are expected by the Coalition Government to continue to commit to the often considerable expenditure necessary to effectively engage in the planning process and deliver large scale development proposals.

Good planning ensures that we get the right development, in the right place and at the right time [17] . This is to be achieved through the ‘Plan led’ system. The "certainty and predictability" provided by the ‘Plan led’ system is central to planning and plays the key role in integrating sustainable development objectives. [18] A spatial planning approach should be at the heart of planning for sustainable development. It provides the policy link for Government to various international obligations relating to climate change, Strategic Environmental Assessment, the Habitat Regulations Directive and other requirements.

The revocation and the "stripping out" of the regional tier of Local Government establishes a de facto single tier planning system in England imposing a role on the Local Development Framework Core Strategies not previously envisaged when the LDFs were originally established by the Planning and Compulsory Purchase Act 2004. [19] Paragraph 34 of PPS3 states the former Government’s expectation that the overall level of housing should be set out in Regional Strategies. It is clear that this role was not envisaged to be undertaken by the Local Development Frameworks. It is a debatable point whether such documents, in their current form, are the most appropriate policy tool to perform this task and whether the LDFs are still "Fit for Purpose." There remains a strong and cogent case for the retention of some form of strategic or sub-regional planning as part of a revised planning system. The long term continuing desirability of ‘binding’ Inspector’s Reports and the current PPS 12 Tests of Soundness should be reconsidered in light of the RSS revocation and the forthcoming radical reforms of the planning system.

The planning system needs to be comprehensively changed if a permanent single tier system is envisaged. This should be thoroughly consulted upon before it is introduced, rather than such a system coming about on an ‘ad hoc’ basis, without adequate consultation, guidance or transitional arrangements, as to how such a new system would function and how proposals being progressed under the previous system would be handled. There appears to be a ‘reality gap’ in the Coalition Government’s thinking on the nature and operation of the revised ‘Plan-led’ system, which embraces localism.

The revised ‘plan led’ system should be formulated to effectively deliver a robust housing land supply, based on transparent, evidence based analysis of development requirements. Informal, interim requirements, devised without wide engagement and consultation, are unhelpful in advance of the DPD reviews. Clearly, to ensure ‘certainty’ and a smooth transition to the new system the RSS figures should stand until they are reviewed through the LDF process.

The former Government established its Development Plan system; comprising Regional Spatial Strategies and Local Development Frameworks. A two tier system intended to simplify the previous system, which comprised Regional Planning Guidance, which did not form part of the Statutory Development Plan, Structure Plans and Local Plans.

The Structure Plans were to be abolished upon final publication of the relevant Regional Spatial Strategy. Most Structure Plans, other than those in the South West region, are now abolished.

The former Structure Plans, amongst other things, set out the scale and distribution of housing and employment development envisaged and performed many other important strategic functions, including co-ordination of infrastructure provision and other cross boundary matters, which do not neatly fall within individual local planning authority boundaries.

These roles were fulfilled by the Regional Spatial Strategies, prior to their revocation. It should be noted that, unlike the previous Structure Plans, the Regional Strategies went further in their level of policy prescription, not only determining the overall scale of development appropriate for the region concerned, they also set out the proposed distribution by Local Authority Area, having regard to the differing Local Government Structures, sometimes defining the level of development appropriate for particular key settlements and included policy guidance of the broad location(s) and scale of strategic development proposals, where the evidence base supported such identification.

The implications of if there is to be no strategic planning undertaken have not been adequately considered. There will be a failure to properly plan for the future housing needs and demands. The recent survey by consultants Roger Tym reveals that only a minority of Councils are expected to continue with the housing levels, previously set out in the regional strategies. [20]

The Regional Strategies were prepared by the Regional Planning Bodies, on behalf of the Government, but the final publication of the Regional Strategies was undertaken by the Secretary of State. At that point the Regional Strategy document not only became Government policy, but also part of the Statutory Development Plan and was afforded the full weight of Section 38(6) of the Planning and Compulsory Purchase Act 2004. Thus, the ‘certainty and predictability’ of the ‘Plan led’ system was established to enable Local Development Frameworks, in particular the Core Strategies, to be formulated in general conformity to the relevant finalised Regional Strategy.

Developers, local authorities and others have fully engaged in the Regional Strategy process, committing considerable resources, time and effort to participation in the various stages of plan preparation, responding to consultation opportunities and contributing to the RSS evidence base.

The revocation, with immediate effect, [21] [22] has created tremendous uncertainty in the planning arena and significantly undermined investor confidence, precisely at a time when the housebuilding sector needs support during the economic recovery and dwelling completions need to be accelerated to address the demonstrable acute housing needs and demand.

The act of revocation, coupled with the policy shift towards ‘Localism’ by the Coalition Government, will create problems for housing delivery in the medium term, as well as the short term, as the substantial amount of time taken by the majority of Local Planning Authorities to resolve the current uncertainties is eventually reflected in the timing of actual delivery of development.

The Coalition Government’s Localism agenda will take many months, if not years, to "bed down". The current confusion, given absence of any robust transitional arrangements, has resulted in many local authorities either withdrawing their Local Development Framework Core Strategies or slowing down their preparation until there is a greater clarity at the national level. [23] [24] [25] [26] This will inevitably impede the supply of new housing and employment development.

Development proposals formulated in accordance with the Regional Strategies, in particular the large scale urban extension proposals at the Strategically Significant Cities and Towns (SSCTs), no longer have the weight of the ‘Plan led’ system behind them. Their implementation will inevitably be delayed and their future is now in doubt, in some cases, where the ‘Localism’ agenda may result in lower development targets being set locally by the Local Planning Authorities removing the need for urban extensions, which are deemed "unpopular" locally, often despite robust evidence for their allocation. The ability of the Coalition Government to reverse now deep seated ‘nimbyism’ and overcome local self interests through incentives and other measures appears limited.

The ‘Localism’ agenda is likely to result in the allocation of lower levels of development than set out in the regional strategies, as anti-development lobbies apply political pressure and the Councillors become mindful of the Local Government Elections.

Given that the ‘Step Change’ in housing delivery sought by PPS3 was to be achieved, in large part at the Broad Locations for Development identified in the Regional Strategies, the act of revocation will now fundamentally undermine the expected delivery of increased housing numbers at these sustainable, broad locations, where they are needed most.

The consequences of planning for lower levels of development are not experienced equitably across communities as a whole. The supply of new affordable housing units will reduce at a time when there are acute levels of housing need. [27]

Further delays in plan preparation will result from the revocation. The delivery of development, on larger urban extensions and regeneration areas, often is intrinsically tied to the progress of the Development Plan. Local Planning authorities have responded in many different ways to the emerging Localism agenda and revocation of regional strategies. Some councils have been quick to consider the issue and set a new lower level of housing or withdraw their Core Strategies [28] , whilst others have sought to take more time over determining level of growth to be planned for. [29]

The new locally set levels of development still need to be tested at Examination in Public by an Independent Inspector. Core Strategies are supposed to only include strategic sites considered central to achievement of the Strategy [30] . Therefore, the majority of allocated sites required to deliver the new locally determined housing figures will have to be progressed through Site Allocations Development Plan Documents. These, in the main, are prepared after the Core Strategies are adopted or the Core Strategy EIP has been completed. Therefore, the delivery of development from the expected on allocated sites included in the Site Allocation DPDs will be delayed by several years.

Furthermore, as progress on the former Local Plans was slow and now somewhat dated, the Core Strategies prepared to date have not brought forward sufficient land quickly enough to effectively supplement the housing land supply given the reliance of Site Allocations DPD. Thus in many parts of the country there is a dearth of genuinely available and deliverable development sites, despite there being a demonstrable need for additional housing to achieve the ‘Step Change’. In a revised single tier ‘Plan led’ system, it will take several years to address and rectify this problem, provided the local determined housing figures actually recognise this point and seek an increase in overall housing provision.

Policy Deficits

Another consequence of the revocation may not be immediately apparent to the Coalition Government policy makers. Given the desire of the former Government to simplify the content of Development Plans and remove duplication of policy and/or repetition as some policy matters were covered by the Regional Strategies there was no longer a requirement to include such duplicated policies in the Local Development Frameworks and so such policies were omitted from the LDFs. For those Core Strategies and other LDF documents where this was the case, the revocation of the Regional Strategies has created a ‘policy deficit’ where the regional policies no longer apply but the Core Strategies have been adopted or the Examination in Publics have been completed without the LDFs including adequate policies on some issues. Clearly, there will be cost implications to the Local Authorities who need to review their Core Strategies and/or other LDF documents to address any ‘policy deficits’ as a consequence of the revocation.

Incentives/New Homes Bonus

There is a fundamental tension inherent in the Coalition Government’s ‘Localism’ agenda in respect of planning for new development. The effectiveness of the Government’s plan to incentivise local communities to accept new housing development is likely to be modest and patchy. Short term financial incentives run contrary to the long standing principle that planning permissions should not be ‘brought or sold’. Furthermore, some more wealthy local authorities will consider the expected incentives insufficient to justify the inevitable political backlash from local voters, mindful of the Local Government Elections. The current lack of clarity regarding the precise incentives that could be expected is also a cause for concern, prompting some councils not agreeing to further development too hastily. Given the tight Government Budgets as the deficit is addressed, there is a real concern that the nature and level of incentives that are made available will be insufficient to ensure an adequate long term housing supply is achieved. The Grant Shapps letter [31] did not make reference to the previous commitment to match Council Tax revenues on every new home built for six years in grant payments. The Minister is understood to be locked into debate with the Treasury over affordability.

Furthermore, there is evidence that some local authorities are reneging upon their Multi-Area Agreements in terms of their agreed strategies for urban expansion.

Adequacy of Co-operation Proposals – Proposed Duty to Co-operate

Guidance and the reasons for joint working are set out in PPS12 paras 4.16 – 4.18. [32]

In the absence of the regional strategies it is essential that the local authorities are encouraged to work together on strategic and cross border issues and to establish realistic and responsible targets for waste, mineral extraction and renewable energy generation which have regard to needs and demands arising from a larger geographical area than their own administrative borders.

Whilst it may be desirable for local planning authorities to co-operate in the preparation of planning documents, previous experience indicates that Local Planning Authorities cannot be forced into unacceptable joint arrangements. This is particularly evident in the Greater Bristol area. It is unclear how conflicts in the respective ‘localism’ camps would be resolved. There will inevitably be differing opinions on the future scale and direction of new development from opposing neighbourhoods, communities or local authorities.

The implications of under provision in one local authority are often felt by neighbouring authorities. This is compounded if all authorities under provide, such as in the Bristol/West of England Housing Market Area, then the impacts are felt across a wider sub-region.

Role of Local Enterprise Partnerships

It is noted that the proposed Local Enterprise Partnership may fulfil a planning function. Whilst this would enable housing and planning issues to be examined over a broader area, the plan making responsibility remains with the Local Planning Authorities in the ‘Plan led’ system. There does not appear an adequate mechanism to ensure that the views of the LEPs would actually be reflected in the Local Development Frameworks under the current arrangements.

September 2010