Abolition of Regional Spatial Strategies

Memorandum from Turley Associates (ARSS 93)

Executive Summary

· Even before the effects of the recent recession, the planning system has not been able to deliver the amount or type of housing which our communities, our economy and our society needs. By the end of this year, some commentators have predicted that the shortfall against the levels of housing we need will be one million homes. This has led to severe problems of affordability, where a growing number of households are excluded from home-ownership; and accessibility, where labour mobility and economic growth are stifled.

· The recent credit crunch and economic recession have exacerbated this problem. Reduced availability of credit and economic uncertainty have constrained the demand for new housing and reduced the housebuilding industry’s ability to supply even the amount for which there is demand.

· With more stable economic conditions and a positive and certain policy framework, the housebuilding industry has the potential to deliver the housing we need and in doing so create jobs and stimulate economic activity. As the economy emerges from recession, housing demand increases and the Coalition Government commences its "reboot" of the planning system, it is essential that steps are taken to enable the industry to increase the rate of new housebuilding and to boost the supply of housing land.

· The Government is aware of this and it is reflected in its own analysis; Open Source Planning notes that "the country needs a major upswing in development and construction as soon as possible".

· Having abolished the RSSs, the challenge facing Government is how best to deliver the "upswing" in construction and development over the short, medium and longer term. The Government inherits a ‘backlog’ of one million homes compared to current housing requirements and a supply of housing that, in many cases, does not match the type of housing for which there is demand. All recognised projections of housing need suggest requirements will rise but the planning system is not, at present, well equipped to respond quickly to this need. Urgent action is needed that will improve the supply of housing in England that takes account of the significant local variations that exist in the need and demand for housing..

· The proposed presumption in favour of sustainable development which conforms to national environmental, architectural, economic and social standards would be an important measure in the delivery of housing. ‘Open Source Planning’ also proposes a very different approach to the creation of ‘new local plans’ which are to comply with a new national planning framework and to be completed within "a reasonable timescale".

· It is the Government’s intention that a presumption in favour of sustainable development will only apply after these documents are in place. However, it will take time for these plans to be prepared and adopted. Observation, research and past experience indicate that it will take between 24 to 36 months for a new system to become embedded and working in practice. If housing delivery is not increased in the meantime, this will add to the current shortfall, compound problems of affordability and accessibility and frustrate the Government’s aim of delivering an upswing in construction and development activity.

· As such the Government should prioritise the introduction of a presumption in favour of sustainable residential development as an immediate step. If such a presumption was to be introduced now, it is considered that the early positive results would include the following:

· Maximum delivery of good quality housing in areas where it is needed at a time when the country is emerging from recession and controls on public sector investment will be strict

· A powerful incentive for local authorities to prepare new local plans in the minimum possible time scale

· Local members and engaged communities would quickly adopt a positive approach to providing the development their areas need

· Timescales for developments to come forward would be radically reduced

· The resulting increase in housebuilding activity would stimulate investment, boost local economies and create jobs

· New homes would help to address the significant national shortfall and meet needs for affordable housing.

· This submission also requests that measures are put in place to ensure that data and research collated by the now abolished Regional Local Authority Leaders’ Boards are retained and updated for use all stakeholders. Responsibility for this could rest with LEPs under a properly constituted framework taking account of the possibility of a duty to co-operate and being granted a limited planning function. The efficiency of such a strategy is demonstrated by the success of ‘Joint Data Units’ following the abolition of a number of metropolitan county councils in the mid 1980s.

1. Introduction

1.1 This submission has been prepared by Greg Mitchell BA(Hons), DipTP, MRTPI of Turley Associates, an independent planning and development service to a wide variety of organisations including financial institutions, developers, house builders, retailers and land owning estates. Greg Mitchell has over 30 years of experience in town planning principally within consultancy and the development industry. He is the national head of the company’s Housing and New Communities sector. Turley Associates has a national team across ten regional offices in the UK.

1.2 The revocation of RSSs is a significant change to the English planning system and the consequences of the change are yet to fully enfold. The advice issued to LPAs goes some way to addressing the uncertainty which followed the initial announcements by the Secretary of State and confirms a national commitment to certain key planning policy objectives such as those relating to economic development, design, climate change, flood risk and transport.

1.3 Housing development remains the most controversial topic and, outside London, the revocation of the RSSs may give rise to some LPAs using the change to simply resist new development in the housing and economic development sectors. In the absence of detailed information on the promised financial incentives for growth, the current situation is one where local objection will have significant weight in the planning process. Evidence is that LPAs are exercising extreme caution when it comes to controversial schemes. In the longer term, it remains unclear whether the incentives will be enough to provide a fair and balanced planning process for the industry.

1.4 Plans for Local Enterprise Partnerships are positive but it is unclear what the actual level of uptake will be from LPAs and what planning powers, if any, such partnerships will have.

1.5 The revocation of RSSs sweeps away regional housebuilding targets, which were the basis of the UK’s growth agenda. In the short term the replacement for these is not clear. Whilst LPAs are advised to continue with preparation of their LDFs they will be able to review development requirements. It is open to them to adopt "Option 1" housing requirements or to formulate alternative requirements provided their approach passes the tests of soundness set out in PPS12.

1.6 In view of the fragility of the housing market, the backlog in housing delivery and the potential contribution of increased housebuilding to economic recovery, we consider that it would be preferable for Government to require LPAs to deliver housing at least in accordance with Option 1 requirements pending the testing and adoption of robust alternative figures.

1.7 Whilst much effort across the development industry has been focussed on the implications for housebuilding, it is also of note that employment, retail and other necessary development also have growth agendas rooted in RSS. Uncertainty on how to fill the strategic void extends across most sectors.

1.8 The planned reintroduction of a presumption in favour of sustainable development is welcome. Its consistent application during the transition between the revocation of RSSs and the introduction of any new local development planning system, would go some way to restoring industry confidence and ensuring that development can contribute towards economic recovery.

1.9 The need and demand for additional housing continues to grow while delivery of new housing is currently at its lowest level since the 1920s [1] . The effects of the recession on the delivery of new housing have been severe with a 46% reduction in annual housing completions in the first quarter of 2010 compared to the same period in 2007 [2] .

1.10 This under-supply has led to problems of affordability, which have prevented many households from having the opportunity to own their own home, and availability, which has reduced the mobility of labour and constrained economic development and growth. The Government is aware of this and it is reflected in its own analysis; Open Source Planning notes that "the country needs a major upswing in development and construction as soon as possible" [3] .

1.11 It is essential that positive action is taken quickly by the Coalition Government to address these problems and deliver the new housing that is so needed by so many communities and that will lead the economy out of recession.

1.12 Recent market conditions, and to some extent planning policies, have constrained developers’ ability to bring forward plans for housing delivery. This submission highlights the scale of the challenge and suggests measures including early action which if taken by the Coalition Government will help to create the conditions which the housebuilding and development industries require to deliver the Government’s aspirations for communities.

2. The Challenge Ahead

The Need for New Housing

2.1 It is widely accepted that we are not building enough housing to meet the Country’s needs and that the supply of new housing must be increased. It is acknowledged that the lack of supply is a significant contributor to social and economic problems. Kate Barker’s stark analysis in her Review of Housing Supply in 2004 [4] was that "I do not believe that continuing at the current rate of housebuilding is a realistic option, unless we are prepared to accept problems of homelessness, affordability and social division, decline in standards of public service delivery and increasing the costs of doing business in the UK".

2.2 As an illustration of the challenge ahead, in 2007, it was calculated that housing completions [5] in England would need to reach 240,000 [6] per year if the objective of providing enough housing was to be met. Even before the credit crunch, annual completions fell well short of this requirement. The highest recent rate of completions was in 2007/8 and totalled 167,000. Completions fell slightly in 2008/9 and then sharply in 2009/10 when less than 134,000 new dwellings were completed. "Mind the Gap" estimated that the shortfall of housing completions against identified need could amount to one million homes by the end of 2010.

2.3 Clearly the potential supply of new housing varies across England in response to market and physical conditions – for example opportunities for major brownfield development are less obvious in the south west of England than elsewhere.

Future Housing Need

2.4 Projections of medium and longer term housing requirements confirm that need and demand for new housing are likely to continue to rise for the foreseeable future. For example, the ONS population and household projections [7] project rising requirements for new housing. While the effects of the recession and credit crunch have had some impact, for example on levels of migration, it is clear that they have not affected the major underlying drivers of recent increases in housing requirements – rates of household formation, falling household sizes and people living longer.

Summary

2.5 In summary therefore, the challenge facing the new Government is how best to deliver the "upswing" in construction and development over the short, medium and longer term. The Government inherits a ‘backlog’ of one million homes and a supply of housing that does not match the type of housing for which there is demand. Future housing projections suggest requirements will rise but the planning system is not, at present, well equipped to respond quickly to this need.

2.6 All this has happened at a time when the housebuilding industry has undergone a major restructuring and downsizing which leaves it with much reduced capacity to respond to housing needs. It is, therefore, vital that action is taken immediately to stimulate housebuilding and make the planning and delivery of new housing simpler and more responsive to current demand. In particular, action is needed to avoid the very real risk that a transition to any new system of planning for housing arising from the revocation of RSS will compound problems of under-supply. The focus needs to be on increasing the supply of new housing across all tenures.

3. The Coalition Government’s Proposals

3.1 In addressing the challenge of increasing housebuilding activity, the Government proposes the "radical reboot" of the planning system which The Conservative Party’s Green Paper: Open Source Planning called for.

Reforms of the Planning System

3.2 The analysis in Open Source Planning (and earlier studies such as the Barker and Killian Pretty Reviews) concludes that the planning system does not do enough to facilitate development where it is needed and often adds disproportionately to the timescales and costs of bringing forward development. Any reform of the system should make it more efficient and help to bring forward good quality and sustainable development more quickly.

3.3 It is clear that any new system will require not just legislative time to become active but time to regain the confidence of local communities and councils. Open Source acknowledges that "tragically, the very idea that development can benefit a community has also become a casualty" (of mistrust in the planning system). Further reforms of the planning system should provide clarity and certainty which can help to restore confidence in the system – for communities and for housing investors and home builders.

3.4 With the revocation of RSS it will be essential that local councils, communities and the development industry remain clear about what level of housing is expected to be delivered in a particular area. In deciding how to proceed, the Government should have regard to the longer term projections of population and housing need which confirm the urgency of an increase in housebuilding if the country is to avoid the significant social and economic consequences highlighted by the Barker Review.

Delivering New Housing

3.5 Meeting Option 1 figures for delivery of new housing will require a significant increase in current rates of delivery. This, at a time when need remains high and demand is increasing, but the main delivery agent – the housebuilding industry – faces a dual problem of difficult market conditions and significantly reduced capacity.

3.6 The Government’s planned financial incentives for the delivery of new housing could act as a powerful incentive for councils to plan for more housing. In the longer term, the proposed new system does have the potential to deliver housing through a combination of a simpler local plan system and direct local incentivisation of development. However, there is concern that in the transition to this new system, particularly now that the strategic housing requirements in RSSs have been revoked, opportunities for good quality housing may be delayed and the impacts of the economic downturn prolonged. Hence the reason why we advocate the use of Option 1 levels as a minimum.

Local Development Plan Timescales

3.7 In previous systems, the absence of binding timescales for adoption of development plans has added to uncertainty and delays and frustrated development activity. The Government’s proposals for local authorities to complete local plans within prescribed timescales will help, but experience in this area has not been good.

Data and Research

3.8 In many cases, a considerable body of evidence that would be relevant to a new local plan has already been gathered and widely consulted upon. In order to avoid yet further delays and costly gathering of new evidence, the existing evidence base should form an essential component of whatever revised local development plan system the Government proposes. There is no need to duplicate work that has already been completed incurring unnecessary costs for the public and private sector. In this context it is important that measures are put in place to ensure that data and research collated by the now abolished Regional Local Authority Leaders’ Boards is retained and updated for use all stakeholders. Responsibility for this could rest with LEPs under a properly constituted framework taking account of the possibility of a duty to co-operate and being granted a limited planning function. The efficiency of such a strategy is demonstrated by the success of ‘Joint Data Units’ following the abolition of a number of metropolitan county councils in the mid 1980s.

Presumption in Favour of Sustainable Development

3.9 Open Source proposes that there should be a presumption in favour of sustainable development after a Local Development Plan is adopted. The introduction of such a presumption in favour of sustainable housing would act to address both the need to maintain and increase housing delivery as the country emerges from recession and to provide an added incentive for communities and councils to prepare local plans quickly. It is through this mechanism that the issues set out above could be addressed.

3.10 Could a mechanism be put in place to enable the presumption to be introduced ahead of the adoption of a Local Plan? We believe it could. The presumption in favour could indicate that local planning authorities should consider favourably proposals which would help to meet local housing requirements and which can be demonstrated to comprise sustainable development.

3.11 Sustainability Appraisals could be used as a means of ensuring consistent assessment of the sustainability of proposals for new housing. Sustainability Appraisal is a transparent and objective tool for considering the overall sustainability of a development which can be applied to individual planning applications. The information contained in such an appraisal can be proportionate to the scale and likely impacts of the development and could comprise part of the information required to accompany a planning application. Assessment of local housing requirements could draw on a range of evidence including population and household projections, Strategic Housing Market Assessments, economic growth plans and recent levels of housebuilding in the area.

3.12 It is suggested that a Sustainability Appraisal could be submitted alongside the Design and Access statement with a planning application. It is already a requirement for most major schemes. If it was viewed as robust by the Local Authority then the presumption in favour of development would apply in respect of the consideration of that application. If the Local Authority did not consider it robust they would determine the application as if the presumption did not apply but the applicant could appeal and the Planning Inspector could come to his or her own view on the Sustainability Appraisal and then apply the presumption or not in coming to a decision. This provides a straightforward procedure which enables the sustainability of a scheme to be tested.

3.13 This mechanism mirrors the sustainability testing of the Local Development Plan but can be introduced immediately. If the presumption in favour of sustainable housing development is only introduced once councils have adopted new local plans this risks further delay. Our observation, research and past experience indicate that it will take between 24 to 36 months for a new system to become embedded and working in practice. Meanwhile, on current evidence, there is a clear prospect that councils will resist or defer much needed housing development with the consequent serious impacts on jobs, economic activity, labour mobility and the cost and availability of housing. This would frustrate the Government’s aim of delivering an upswing in construction and development activity.

4. Request for Action

4.1 In conclusion, even before the effects of the recent recession, the planning system has not been able to deliver the amount or type of housing which our communities, our economy and our society needs. By the end of this year, some commentators have predicted that the shortfall against the levels of housing we need will be one million homes. This has led to severe problems of affordability, where a growing number of households are excluded from home-ownership; and accessibility, where labour mobility and economic growth are stifled.

4.2 The recent credit crunch and economic recession have accelerated this problem. Reduced availability of credit and economic uncertainty have constrained the demand for new housing and reduced the housebuilding industry’s ability to supply even the amount for which there is demand.

4.3 With more stable economic conditions and a positive and certain policy framework, the housebuilding industry has the potential to deliver the housing we need and in doing so create jobs and stimulate economic activity. As the economy emerges from recession, housing demand increases and the Coalition Government commences its "reboot" of the planning system, it is essential that steps are taken to enable the industry to increase the rate of new housebuilding and to boost the supply of housing land. The Government’s aim of delivering an ‘upswing’ in development and construction activity depends on this. An increased supply of housing is essential if the Government is to achieve its stated aims of delivering economic growth.

4.4 A new, simpler local plan system combined with incentives for communities to deliver new housing could help to boost housing supply. The proposed presumption in favour of sustainable development which conforms to national environmental, architectural, economic and social standards is also an important measure in the delivery of housing. It would, however, be a concern that if the introduction of such a presumption in favour is left until after the introduction and adoption of new local plans and a revised development tariff system, opportunities for sustainable and much needed housing will be delayed at this critical time. Preparation of a local plan is likely to take a minimum of two years. If housing delivery is not increased in the meantime, this will add to the current shortfall and compound problems of affordability and accessibility rather than addressing them.

4.5 Such a presumption would make clear that to be considered sustainable, a development would need to:

· Comply with national policy contained in Planning Policy Statements and Planning Policy Guidance notes;

· Have been shown to sustainable through application of an objective Sustainability Appraisal process;

· Be subject to payment of any tariff in accordance with prevailing local requirements; and

· Have been subject to appropriate public engagement.

4.6 As such the Government should prioritise the introduction of a presumption in favour of sustainable residential development as an immediate step. If such a presumption was to be introduced now, it is considered that the early positive results would include the following:

· Maximum delivery of good quality housing in areas where it is needed at a time when the country is emerging from recession and controls on public sector investment will be strict;

· A powerful incentive for local authorities to prepare new local plans in the minimum possible time scale;

· Local members and engaged communities would quickly adopt a positive approach to providing the development their areas need;

· Timescales for developments to come forward would be radically reduced;

· The resulting increase in housebuilding activity would stimulate investment, boost local economies and create jobs;

· New homes would help to address the significant national shortfall and meet needs for affordable housing.

September 2010