Abolition of Regional Spatial Strategies

Memorandum from East Riding of Yorkshire Council (ARSS 58)

Summary

· The abolition of RSS is not expected to have any short term implications for housing delivery in this area; the market is still in recovery mode

· The availability of incentive funding is welcome, especially in a period of low Section 106 and/or Community Infrastructure Levy revenues. However there are concerns about how effective this incentive will prove.

· A method for front-loading part of the new homes incentive would be beneficial

· Weak housing market areas, with low levels of completions, may need additional support

· Incentives are needed to reward positive action where new supply is being restricted to help weak housing market recovery

· Co-operative working arrangements are best left to local circumstances, and could be based upon previous or current models of co-operation

· A duty to co-operate is perfectly reasonable and understandable

· There may be the opportunity for a Local Enterprise Partnership to discuss strategic opportunities, but decision-making must remain as a clear local authority responsibility

· Existing regional research is best located within each local authority.

The submission has been submitted on behalf of the Council by John Craig, Forward Planning and Housing Strategy Manager. I am a chartered town planner, and manage teams responsible for preparing the Local Development Framework and delivery the Council’s strategic housing function. This involves close working with the other Humber local authorities (Hull, North Lincolnshire and North East Lincolnshire) on strategic planning and housing matters.

1. The abolition of regional house building targets

1.1 The experience of producing and adopting the Yorkshire and Humber Plan (RSS) appears to have been far less fraught than for other regions. Local authorities (and other stakeholders) have had opportunities to shape the commissioning of the regional evidence base, and input their evidence to the relevant consultants. The ‘Option 1’ RSS housing targets for the East Riding were largely derived from and close to the previous targets from the Joint Structure Plan for Hull and the East Riding. Although the Secretary of State increased the regional targets, those for the East Riding remained largely unchanged, so the Council was able to accept them relatively straightforwardly. The Humber chapter in RSS is largely derived from locally agreed priorities.

1.2 Following the announcement of the abolition of our RSS the Council has responded to concerns about the potential policy vacuum by adopting an interim planning policy approach that continues to use housing (and other) targets included in RSS on an interim basis, pending a review of local evidence (including a revised housing needs and market assessment) to inform the preparation of the emerging Core Strategy. For the most part, our neighbouring local authorities are doing likewise. A principal reason for this Council’s approach is that it has just completed a second round of consultation on its Local Development Framework’s (LDF) Core Strategy, which used RSS targets and strategic spatial distribution model. The Core Strategy’s spatial distribution of new development is based upon delivering these. At this stage, the Council is confident that revisions to the housing requirement for the area could be accommodated within the broad framework provided within the Core Strategy. Clearly this position may have to be revisited in the light of the outcome of the proposed research.

1.3 Not unexpectedly, housing completions have slumped over the previous two years, to well below RSS targets. Evidence from stalled housing development sites suggests that virtually all have recommenced building, and we predict annual building rates could return close to pre-slump levels within two to three years if current progress can be maintained. However, developers tell us they are funding schemes from sales, as bank lending remains virtually non-existent for land purchase, materials or labour costs. While they continue to have to do this building volumes will remain low.

1.4 Through its Strategic Housing Land Availability Assessment (SHLAA) and managed release policy, the Council is ensuring it maintains a 5 year housing supply to meet RSS targets across all parts of the East Riding.

1.5 Although RSS affordable housing targets have gone, the need for affordable housing has not. The requirement for Viability Assessments (following the Blythe Valley legal challenge) gives local evidence based on local developments costs and housing market circumstances, so there is no need for this to be addressed strategically.

1.6 In the short term, therefore, RSS abolition will not have any immediate effect. The Council recognises it will have to update its 2007 Strategic Housing Market Assessment to provide local evidence of need and demand. There are clearly considerable cost implications associated with this work. Evidence flowing from this research will be used to inform future stages of the LDF. As stated above, at this stage it is not envisaged that revisions to the evidence base will necessitate significant changes for the LDF.

Recommendation

1.7 While the Council does not believe there is a need for a formal or statutory level of planning between the local and national, we believe the proposed national spatial framework must address the issue of housing needs and demands based on anticipated economic, population and migration change, affordability, and its spatial distribution.

2. Incentivising local housing delivery

2.1 The principle of offering to match Council tax via a New Homes Bonus Scheme funding for every new home for a number of years is an attractive one. Developer-raised revenues (via Section 106 payments, potential Community Infrastructure Levy or other tariffs) are likely to be severely limited while profitability remains squeezed; this matched grant fund may help to meet some of the shortfall. It could be used to improve local infrastructure and services so they are better able to accommodate new development.

2.2 However, the Council has some concerns about how acceptable this will be to communities in practice. Responses to the Core Strategy consultation show the dilemma the Council faces, and how consensus might be achieved. Larger settlements feel that they have grown too large and have lost much of their character; they believe housing should be allocated to smaller communities. Smaller settlements believe development should go to those settlements with the facilities and services in place to accommodate development. Middle-sized settlements use both arguments. Even parishes, which support development via parish planning exercises, oppose development when specific sites have to be considered.

2.3 At best, communities require services and infrastructure to be improved ahead of new development; so receiving grant in arrears will not necessarily help. Even with the offer of funding, and in the face of acute affordable housing shortages, the Council is unsure how successful it will be in persuading communities of the benefit of new housing. The government should, therefore, consider whether the incentive could, in part, be offered on the basis of planning permissions granted, rather than (or as well as) on actual completions. This would allow some (say, up to 50%) of the grant to be received in advance of completions, and be used to advance fund local infrastructure. This may help lessen or alleviate community concerns about the capacity of their settlements to accommodate new development.

2.4 The Housing Minister’s statement that this delivery grant funding will not be ring fenced, although welcome in principle, means that communities may not be persuaded to accept new housing if they do not see direct benefits of such funding. Households tend to react according to proximity of development. It is unlikely incentives handed to local authorities will be able to ameliorate what households regard as impacting on their immediate quality of life. Communities may recognise that pressure to take more housing only partly reflects local needs; in part they may see it as an exercise by the local authority to raise funds for additional public services not directly related to the locality. In theory, this Council could spend grant funding raised from development in Bridlington in Goole, 44 miles away. While the local political consequences of this are recognised, it may help if the government was to issue further guidance.

2.5 The Council doubts the effectiveness of the bonus in weak housing markets where housing completion levels have been historically low. The East Riding has weak housing market areas in the inland port of Goole, the small coastal town of Withernsea, and in Bridlington. The Council is supporting partnership regeneration strategies for these towns, but it will be some time before their economic fortunes are sufficiently transformed to generate significant extra housing demand. It would be beneficial if the bonus scheme recognises this with additional incentives.

2.6 The Council is also supporting the weak housing market that exists in Hull, and is a member of its Housing Renewal Pathfinder board. It has been effectively restraining market housing to help revive Hull’s housing market recovery. In so doing, it will, effectively, be penalised for taking a strategic, supportive approach. The Housing & Planning Delivery Grant failed to acknowledge this, and the Council would expect the new government to address this concern in an equitable manner.

2.7 The Council is concerned that in some instances, a local community will seek to resist new housing development irrespective of any cash incentive offered and despite offers to address specific issues giving rise to opposition to a planning application (e.g. drainage capacity). Communities may see this as a way to resist change. The emerging localism agenda may give rise to an intensification of this problem whereby a minority view may be sufficient to prevent housing development from taking place.

2.8 There have been media estimates of the cost to the Exchequer of £1.2bn a year after five years, six times the current Housing & Planning Delivery Grant that is intended to fund part of the cost (the remainder coming from formula local authority grant aid). The incentive is not new money and, in effect transfers funding from one area to give to another. If media estimates are correct, there have to be doubts about the sustainability of such funding, how communities can be incentivised when there is no funding in place, or when it transfers funding from one area to another. It is not enough to hope that the housing market picks up so greater levels of development tariff funding become available to replace it.

Recommendations

2.9 A method for front-loading part of the new homes incentive would be beneficial, based on planning permissions granted (or as well as) on actual completions, as this may help fund infrastructure in advance of development.

2.10 It may help if the government was to issue guidance on how a new homes bonus might be allocated to ensure it directly supports communities hosting new development.

2.11 The bonus scheme should recognise the difficulties of delivery in weak housing market areas through additional or enhanced incentives.

2.12 The bonus scheme should recognise and reward positive action where restraint is being applied in certain housing market areas to support weak housing markets.

3. Co-operation on strategic matters

3.1 One of the consequences of the loss of the regional planning team is the loss of expertise amongst its staff. Regional technical support groups have existed since the days of regional planning guidance, particularly for minerals and waste. The cost of these groups was largely borne by the (grant funded) regional planning team.

3.2 One example of this kind of work is a regional minerals group helping the apportionment of nationally defined regional minerals targets down to district level. If the government is no longer to define regional targets, will it be directly responsible for prescribing district targets? This would not sit easily with its localism/delegation agenda.

3.3 The situation for waste is less difficult, as it is local authorities that generate municipal waste flow figures, with the Environment Agency (EA) providing data for construction, commercial and special waste. However, the development of RSS’ evidence base provided an opportunity for this to be collected, analysed and disseminated in one place at one time. There are, therefore, potential implications for the EA in having to deal with authorities on an individual basis, tailored to each authority’s LDF timetable.

3.4 Another consequence of reliance on this regional expertise has meant, in this sub-region at least, a lack of local expertise; specialist staff are in short supply and recruitment is difficult.

While the government may legitimately say it is up to regions or sub-regions to decide on arrangements to suit local circumstances, the shortage of expertise and the loss of funding support have to be recognised.

Recommendations

3.5 The government should set out the process for regional minerals and waste apportionments to the district level.

3.6 The lack of expertise at the local level for dealing with these matters needs to be recognised.

4. Duty to co-operate

4.1 Probably every significant piece of legislation over the last fifteen years that have implications for local authorities have incorporated a duty to co-operate (e.g. acts covering housing, children, public health, crime and disorder, civil contingencies, flood and water management, local democracy). Likewise Planning acts over the last 40 years have included a duty to consult and involve. So it is entirely reasonable and appropriate that such duties should remain. It is the Council’s view that this can reasonably be left to local circumstances in line with the government’s localism agenda.

4.2 The Council has a track record of working on joint strategies with its principal neighbour, Hull City Council, following the abolition of Humberside County Council in 1996. The Joint Structure Plan was adopted in 2005, and has acted as a strategic planning framework for the two local authorities pending completion of the respective Core Strategies, which are due to be adopted in 2012. The two authorities have also prepared joint minerals and waste local plans (which will be revised as DPDs), each authority taking a lead on one. The two local authorities continue to meet on a regular basis to ensure consistency in the respective LDF processes.

4.3 Work on strategic housing market areas, for example, demonstrates how such matters can only realistically be left to local circumstances. The Council’s research shows that there are six housing sub-markets in its area. Three relate directly to Hull’s housing market. The other three are more self-contained, but are variously influenced by towns or cities beyond its boundaries – York in the north west, and Selby and Doncaster in the south west.

Recommendation

4.4 The duty to co-operate, and arrangements for joint working, should be left to local circumstances and discretion.

5. Potential role for a Local Enterprise Partnership (LEP)

5.1 The coalition government has clearly signalled that the remit (and geography) of LEPs will be determined at the local level having regard to functional economic areas. This local discretion is welcomed. The Council recognises there may be a role for the LEP in all sub-regional strategies, not just planning. As with RSS, the strategic elements of the economy, planning, housing and transport are heavily interdependent. There is currently an arrangement with the Humber Economic Partnership (HEP), a local multi-partner voluntary body that acts as an overarching strategic body to four themed sub-boards dealing with each of these strategies. It had also been working closely with the four authorities, the regional planning team, and Yorkshire Forward (the RDA) to co-ordinate and facilitate input into the Integrated Regional Strategy and Integrated City Region Strategy, to ensure they are built from bottom up evidence and perspectives.

5.2 The role of a LEP in strategic planning would largely need to be an advisory one as, in the absence of any formal or statutory sub-regional Planning arrangement, it would be for each authority to embody and formally adopt (and test via public examination) sub-regional priorities into their LDFs.

5.3 With regard to legacy data (importantly from the RDA and the regional data observatory, as well as RSS) for use by sub-regional partners, the Council believes this should naturally be to the local authority level, where most communities and businesses would expect to locate it.

5.4 Housing and Planning Delivery Grant has been extensively used to support local evidence gathering for LDFs. Its top-sliced funding paid for the regional planning teams and regional planning evidence. Its abolition could mean far less research is carried out, whether by LPAs or LEPs.

Recommendations

5.5 While there may be the opportunity for a Local Enterprise Partnership to discuss strategic opportunities, decision-making on strategic planning matters must remain as a clear local authority responsibility, as this is where democratic accountability lies.

5.6 Existing regional research is best located within each local authority.

September 2010