Abolition of Regional Spatial Strategies
A summary of our main views are as follows:
o
The abolition of the RSS and Regional Plans should be welcomed in regard to the loss of top – down targets for housing development,
o
With the loss of the RSS an unintended consequence could be the loss of a positive regional/sub-regional strategic planning role. LEPs are not appropriate bodies to fulfil this work and we have concerns that there will be pressure to return to a centralised system – undermining the spirit of localism.
o
The method by which the Government has gone about implementing a new planning system has caused confusion and has arguably given the wrong impression of the future of housing and planning,
o
There is no evidence to suggest that housing delivery in the East Midlands is currently restrained by a shortage of land with planning permission.
o
The proposed incentives (New Homes Bonus & Community Right to Build) need to be clarified in relation to the plan led system, accountability and the role of local councils,
o
Proposed incentives also appear to reinforce perceptions about home ownership wherein more is needed to support a rental sector,
o
We believe changes in the ‘Open Source Planning’ may not ensure the delivery of suitable infrastructure to support developments,
o
Local Enterprise Partnerships prospects for supporting housing will be limited and could actually prove counter productive in terms of infrastructure delivery.
Impact & Implications of the abolition of regional house building targets for levels of housing development
1.
Broadly speaking the loss of the Regional Housing targets should be welcomed as it has begun the move to re-establishing the role of local councils in a democratic, accountable, plan led approach to housing.
2.
It is however hard to ascertain what the longer term impact and implications of this change will be. Figures in the East Midlands RSS Annual Monitoring report for 2008/09 states that there were 97,000 outstanding planning permissions for new dwellings on 31st March last year. This clearly shows that contrary to claims by the building industry there is no shortage of land available for housing in this area and the problem is the economic situation and in particular, up front infrastructure costs. It is worrying that some areas have seen a drop in housing provision, but this needs to be balanced with the large number of recently submitted and anticipated applications in parts of Leicestershire on greenfield land. The abolition of the RSS targets has had little affect on the pressure for building in this area but it has raised expectations in affected local communities and we are concerned that it has created the erroneous impression that the loss of the Regional Plan housing targets would mean the end of housing in certain areas. A major factor driving this pressure is the requirement in PPS3 for each LPA to have a 5 year land supply. This is working against the government's stated intention to get rid of centrally imposed controls and allow councils to develop appropriate planning policies in consultation with their local communities. Planning decisions are being overturned on appeal simply because the LPA has a small shortfall of land (e.g. 4.5 years) on a particular date. This is undermining the primary purpose of LDFs to identify the most appropriate sites and bring them forward in a way that gives certainty to local people. If the targets are going to be set locally it follows that the selection and release of sites must also be determined locally.
3.
Whilst it is clear that the intention is to create local plans that match the need for housing to local circumstances, there is still some uncertainty about how the old plans will influence the conversion of Local Development Frameworks (LDFs) into Local Plans and how far local areas can decide to carry on with the old system and focus on urban concentration with Sustainable Urban Extensions.
Likely effectiveness of Government Policy.
4.
It is very awkward to predict the affect of government policy on long term supply. Recent events in the South East and South West are very troubling but, as mentioned, are more synonymous with the gap between the abolition of policy without the establishment of a new system.
5.
Taking ‘Open Source Planning’ as a benchmark of future policy there are considerable issues that could affect long term supply. However this has to be seen in terms of specific issues relating to the local plans, New Homes Bonus, Community Right to Build and infrastructure. In addition the operation of strategic planning will need to be considered in order to ensure the ‘balancing’ of development across a region or sub-regional area.
6.
Another concern is that ‘open source’ planning relies upon the strength of a local councils ‘local plan’, and this appears to be essentially a transformed and updated LDF. The problem here is twofold, on the one hand no clear mechanism has emerged to change an LDF into a local plan and secondly how these plans will operate in the wider strategic framework.
7.
It is hoped that the development of local plans will ensure that planning and development is based on the bedrock of the plan led system which was sadly lacking previously. However, as mentioned, there is no understanding of how the issue of housing numbers will be treated. It is assumed that to some extent that emerging legislation will afford councils the power to change their local housing targets, but again there is no mechanism to ensure that an area has reasonable targets to match against sustainability.
8.
This will be a particular issue in areas where the local planning authority does not have an established and up to date LDF that could be easily converted into a local plan. The challenge here is that in developing one, the local planning authority will have to build into its plan an expectation of how demand for housing in the immediate area will increase over time. With the current uncertainty about what will remain in terms of strategic planning (especially regarding upper tier, placed based budgeting and Local Enterprise Partnerships) it could result in major disparity’s across a sub-regional area in terms of areas that are prepared / able to accommodate more development and those that have constraints or are not.
9.
In terms of New Homes Bonus programme, we have concerns about the practical elements of the programme. Whilst incentivised construction through bonus payments is fundamentally sound on a small scale, there is some concern that the affect will be nullified by other areas of government policy for example the wider changes to government fiscal policy.
10.
The medium term impact of the CSR could see a net reduction in Formula Grant which will affect council services and resources, in addition Formula Grant is supposed to be the avenue for distributing the Chancellors reward for 0% Council Tax. Our current working suggests that these pressures alone will add considerable costs to the Formula Grant, and it could be problematic to add further burdens to the Grant. Additionally the complexities of these additional resources in Formula Grant have not been worked out in the context of a negative grant settlement. By this we mean, that even if a council pursues 0% council tax, approves large amounts of construction and actually supports the delivery of the houses, it could still receive a negative settlement in formula grant which will have a knock on financial cost in terms of capital investment or worse could see further service reductions as part of a wider fiscal change. We feel that government should ensure that appropriate legislation accounts for this.
11.
A further complication is how the bonus is divided, whether the local planning authority will keep 100% of the funds or if it is to be shared with upper tier authorities, or even divided along Council Tax precept ratios. These will need to be clarified as the impact on housing supply will vary according to these variations.
12.
In addition it should not be assumed that the extra resources for affordable housing will necessarily improve affordable housing supply. Overall the provision of affordable housing is a mixture of intermediate and social housing and the need/ratio for this will vary between areas. Whilst the bonus may well bring forward more mixed developments this will not necessarily increase overall supply of affordable units, and it will require local authorities to have the ongoing responsibility and power to request affordable housing (with clear ratios between intermediate and social) as part of their local plans. It will also be essential to have some sort of bonus in relation to the improvement and conversion of (especially empty) properties. Unless the bonus is paid to each new ‘unit’ that is made available to house local people, it will simply become a construction bonus, the LGA position on this point is something that we support and echo.
13.
Moving on to the proposed ‘Community Right to Build’, we broadly welcome the suggestion that communities have the power to allow limited development in their immediate area, but this has to be part of the plan led system and still be pursued through Developmental Control. We feel this will support rural regeneration and if the proposals are clear enough could see a marked improvement in Affordable unit delivery, but within the established planning process.
14.
We echo the response of the ‘Planning Officers Society’ in raising further practical concerns of how the policy could work, particularly in relation to how support can be given to communities to avoid landowner and developer collaboration/intimidation. In addition we are looking for some sort of legislative guarantee that affordable over market housing is always preferred.
15.
However, we feel that again the government has made a suggestion without reference to practical planning issues. Whilst we support ‘Community Right to Build’, we are worried that developments on this programme could circumnavigate infrastructure monies (such as S106), placing a further burden on rural infrastructure and services. We are also concerned about the requirement for councils to co-operate but are not (apparently) allowed the role to positively engage and where necessary block development. The overall assumption that a community has the skills and capacity to undertake this sort of decision is problematic, and taking the issue outside of the plan led system is complex in terms of possible legal challenges and could have impacts for those applications made via the plan led system.
16.
Concern exists over how an individual proposal will fit within the overall spatial development of the district/borough and how it could ride rough shod over green wedge/belt and other landscape designations. Whilst ‘Community Right to Build’ could deliver units in areas that need them, it could also undermine the local plan that the local planning authority is required to establish. On the positive side this policy could see the development of parish council’s capacity to engage with the planning process which could support wider planning and housing issues in the immediate area.
17.
In particular we would be keen to see some work to ensure that applications to build 20 units would always come with a condition preventing further development. This is to prevent developers from ‘creeping’ developments made up of 20 home sections over a period of time. We would also hope to see how ‘Community Right to Build’ will fit alongside that proposal under ‘New Homes Bonus’ in terms of payments, section 106 money and local plans.
18.
Overall, we maintain that it is very difficult to assume the impact of emerging government policy in terms of housing delivery and long term supply. The current proposals for an open source planning system do appear to return a strong vein of localism to the plan led system, but there is some complexity in how this newer local system will seek to balance delivery with practical local considerations. Fundamentally, we feel that infrastructure delivery is something that is not dealt with in any detail, and aside from some minor changes to money raised from development, we feel that government has missed the opportunity to offer local alternatives such as ‘Tax Increment Financing’.
19.
In terms of delivering affordable units, the government must also consider the value of investment in rental markets. Whilst home ownership is a noble aim, current housing economics in terms of land prices and household reliance upon ever increasing returns on property as a means of saving/pension/credit, means that this will remain a distant dream for many. A suitably expanded rental market that can support long term tenancies needs to be considered. The Charted Institute of Housing paper entitled ‘Widening the rental housing market’ (August 2010) makes this case very well, and we would be keen to explore the role of local councils and the Voluntary Community Sector in developing a solution locally on this. It is our view that an appropriate delivery of affordable rental units could also relieve the pressure on local housing markets by allowing some competition on rents and targeted rental types to local need.
Local Enterprise Partnerships and strategic planning
20.
The current development of LEP’s seems to be resulting in a sub-regional RDA. This is counterproductive and actively undermines the potential localism in the governments other proposals for housing and planning.
21.
With the development of LEP’s there is the potential that on a small scale (such as a single Housing Market Area) they could replace the role previously undertaken by upper tier Councils (Counties). This should be opposed as LEPs will not be democratically accountable and would simply replicate the role and powers given to RDAs under the discredited Leaders Boards. In such a case, this could easily led to a return to the top-down model as a means of ‘better co-ordination’ of local plans and infrastructure strategies. In addition, the original purpose of LEP’s is around economic growth, and whilst we accept that housing, infrastructure and planning are integral to this in a wider sense this should not result in LEP’s being given a planning role outside the democratic and accountable processes of local government and the local planning authorities.
22.
Overall we feel that the development of LEPs, is also opaque enough that its own resources and direction cannot be easily matched against sustainable housing and planning. In particular we do not believe that any LEP will prefer to invest in housing related infrastructure over business related. We also question to what extent business can/should be involved in the development of housing and infrastructure and what powers they could possess in a time of limited resources.
23.
On a broader theme, there is some confusion over the role that LEPs will have bearing in mind that each economic area is to develop its own unique proposals, if these proposals simply replicate the old RDA model on a sub-regional level, this should raise questions about the LEP policy itself. Our preference would be to retain the limited role of upper tier planning councils as Section 4/4 authorities, bringing together local plans and LEPs into a wider infrastructure plan and acting as a co-ordinating advisory body for investment. This could also be useful as a complimentary factor to new capital investment models such as Tax Incentive Financing.
Conclusion
24.
We thank the Committee for the opportunity to contribute to this call for evidence. Overall we think the potential for housing and planning is broadly promising, but the government should never have taken the route it has in abolishing RSS’ without clearly setting out and establishing what is going to replace it as this has been counter-productive in the short term.
September 2010
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