Communities and Local Government CommitteeWritten evidence from McCarthy and Stone

A. Summary

There is much to welcome in the draft NPPF and we support the Government’s work through the document to promote economic growth and address the country’s chronic housing shortage.

While we welcome its overall direction, it is our view that the Framework requires more focus on policies that support the delivery of housing for older people. Three reports in 2011, including one by the APPG on Housing and Care for Older People in July, called on the NPPF to reference the housing needs of those in later life across all tenures. Such measures will ensure that local councils plan properly for housing the elderly and address many of the policy challenges caused by an ageing population.

While the draft NPPF does highlight the need for local authorities to plan for demographic change, these measures are not suitably clear and are unlikely to be powerfully enforced in their current form. Current planning policy requires authorities to plan for housing for older people, yet few councils do this adequately. As a result, around 65% of planning applications for this form of housing are met with refusal first time round by councils. With the national roll back of guidance, there is concern that few councils will act as intended unless the NPPF is more robust.

Our key recommendations for the Framework are:

Include the need to plan for demographic change as part of the definition of the Presumption of Sustainable Development and as one of the core planning principles of the whole document.

Include a clearer requirement that local authorities plan for housing for older people across all tenures including for private ownership as part of their SHMAs. Historically, these have focused on the social rented sector.

The Government is hoping industry will produce its own guidance to fill the gap left by the rollback of national policy. Local authorities should be advised in the NPPF to “proactively seek” such guidance to ensure it is considered.

Publish CLG’s proposed new SHMA guidance before the final NPPF is agreed and for it to be adopted as part of the Framework.

Make a greater acknowledgement of the link between health and social benefits and specialist housing.

Recommend that local authorities supply the results of their SHMAs to neighbourhood forums so local residents use the correct evidence base.

B. General Overview

1. McCarthy & Stone welcomes the draft NPPF and the attempt to create a simpler planning system, promote economic growth and address the country’s chronic housing shortage. It is a step in the right direction with some very positive measures.

2. We welcome the attempt to stimulate housing delivery, which has been stymied in part by an unresponsive planning system. We support two policies in particular. Clause 19 states that planning should proactively drive and support the development needs of the country and that every step should be taken to meet the housing and business needs of an area. Clause 39 states that council planners should not subject proposals to a scale of obligations and policy burdens that would make developments unviable. It also states that councils should assess the cumulative impacts of their plans and policies and ensure their impact does not put development at risk. This is welcome and is a step towards a recommendation made in a recent report by the University of Reading that specialist housing for older people should treated as equal to affordable housing. Both measures would be of real assistance in boosting housing and economic growth and this approach is pleasing at a time of economic uncertainty.

3. However, the challenges facing the retirement accommodation sector are severe, and as a result, the NPPF needs to go further to address the housing needs of older people. The demographic imperative to act is clear. The number of people aged over 65 will grow from 10 million to 16.7 million by 2035, but the UK has built just 105,000 specialist retirement homes for owner occupation, significantly less than other developed countries. As half of new household growth by 2026 will be by those aged over 65, it is essential that demographic change is recognised and given weight in the NPPF.

4. How the country manages the challenges created by a rapidly ageing population is one of the biggest policy issues of modern times, impacting across Government departments. Specialist housing for older people is a key determining factor in the well-being of the elderly and to unlocking a range of public benefits. As well as being relatively affordable, it: provides a higher quality of life for older people; increases energy efficiency in the home; boosts local communities; reduces the impact of the elderly on public services; allows for equity release; and supports local housing markets by releasing much-needed family homes back onto local housing markets. It is a highly sustainable form of housing development.

5. Few specialist homes have been built as the sector in part due to an unresponsive planning system. As noted in more detail below, local authorities have failed to plan properly for housing for older people across all tenures (and particularly in the private sector) within their needs assessments and housing strategies. They have also failed to appreciate the health benefits of such housing.

6. Specialist retirement housing is a risky market to succeed in. Developers must deliver a lifestyle, not just a building, so it is critical that schemes are suitably located and designed as well as fully built before any occupations can take place. Communal space within the building usually requires some 30% being “non-saleable” floor space. Management, care and support services must also be provided. It is not surprising that there are few developers in this sector.

7. It is therefore imperative that planning constraints and burdens are removed to encourage delivery. While the NPPF does much to achieve this, more needs to be done to make this sector sustainable for new operators. The current planning system is not designed to meet the challenges of housing our ageing population and is blocking the provision of new retirement housing. When public sector funding is limited for new housing, particularly for older people, restrictions on the delivery of new private retirement accommodation need to be removed. The following sections outline how the NPPF can address these problems.

C. Are the policies contained in the NPPF sufficiently evidence-based?

8. It is essential that the draft NPPF ensures that local authorities plan properly for the housing needs of older people across all tenures, particularly in their Strategic Housing Market Assessments (SHMAs). While the NPPF attempts to address this, it is our view that these measures must be considerably stronger.

9. Existing policy has failed to deliver the right mix of housing for millions of older people with differing needs. This historic shortfall is largely due to lack of clarity in national planning guidance and lack of strategic, expert guidance for local authorities on how to properly assess the housing needs of their older communities. Where councils have looked at the housing needs of older people, they have been limited in scope, failing to plan for all types of housing, and focused on public, rather than private provision when around 70% of people live in owner-occupied homes. As a result, around 65% of planning applications for new retirement housing schemes are met with refusal first time round because of a lack of understanding and appreciation of the need and merits of this form of housing.

10. Previous planning policy (via PPS 3, para 20 and the RSSs) required authorities to plan for housing for older people and to have regard to demographic trends, yet few councils did this adequately. Unless this requirement is suitably clear and powerfully enforced in the NPPF, concern remains that few councils will act as intended. Failure to do so could result in a more challenging planning system with more applications going to appeal.

11. Clauses 28 and 111 in the draft NPPF make reference to the need for local authorities to plan for new homes and prepare SHMAs. It is pleasing to see Clause 28 make specific reference to the need for councils to identify the housing needs of older people across the range of tenures. Clause 111 also states that they should identify the size, type, tenure and range of housing that is required, including for the elderly. It is essential that these clauses remain in the NPPF.

12. However, the Framework needs to go further given the lack of action to date. It is important to strengthen and clarify the requirements on local authorities to undertake robust assessments in order to ensure the delivery of more specialist housing for older people. One recommended change is in Clause 28, line 11, where “across all tenures” should be added after “community”. This should help ensure that local authorities plan for private housing provision for older people, as opposed to just social provision, which most focus on at present.

13. In light of the roll back of national guidance, the Government intends for the development sector to prepare its own best practice guidance to help inform local councils. It would be helpful if the NPPF was to encourage authorities to proactively seek such guidance and, where it exists, to have due regard to its advice.

14. While the NPPF places weight on the SHMA to ensure that local authorities have the correct evidence base to inform their housing and planning strategies, there is nothing within the NPPF regarding how the SHMA should be compiled. SHMAs vary greatly from authority to authority and in our experience they are often deficient. Many look at the housing needs of younger people, families and those in the social rented sector, but few plan for the housing provision for older people in the private sector. In 2007, CLG produced best practice guidance on how SHMAs should be produced and we understand this document will be updated in late 2011. Given the weight the NPPF places on the SHMA, CLG’s updated SHMA guidance should be published before the final NPPF is available. The SHMA guidance document should also be adopted as part of the Framework to ensure that local authorities give sufficient weight to its advice and recommendations.

15. It is also important that the NPPF makes sufficient acknowledgement of the link between health and housing. While the inclusion of a (single) paragraph on the importance of health and well being factors in planning (Clause 38), is welcomed, it is our view that this needs to be strengthened given the wealth of evidence that notes the role of specialist housing in improving the health of older people. The impact of an ageing society is being felt across Government, particularly in relation to health, social care, economic growth and welfare. Specialist housing for older people delivers substantial health benefits and the Dilnot Commission noted that better housing for older people can help remove the pressures on social care provision by delaying the need to move into care. For instance, providing suitable housing conditions that delays the move to residential care by one year saves on average £28,080 per person. By addressing this in the NPPF, councils will be required to view future applications for retirement homes positively. To achieve this, the following additional sentence is suggested to be included in Clause 38:

Local authorities should view positively those planning applications that deliver social and health benefits to local residents, particularly for families, the elderly and the disabled.

16. Also, local authorities should be required to supply the results of the SHMAs to neighbourhood forums to ensure neighbourhood plans are produced using the correct evidence base. The increased role by local people in neighbourhood planning means it is essential that they are provided with sufficient information to make the best decisions. A requirement on the local authority to circulate the results of the SHMA to participants in local and neighbourhood plan formation could help address this.

17. Finally, Clause 109 states that local authorities should not plan to meet their housing supply based on windfall sites. As most sites that come forward for retirement accommodation are normally classified as windfall developments (suitable sites can be old large detached properties, redundant garages or old breweries) they do not feature as allocated sites in local plans. Therefore it does not make sense to exclude these sites from the housing numbers when they can and should form part of an authority’s housing supply. Again this puts retirement housing at a disadvantage compared to traditional house building.

D. Is the definition of “sustainable development” contained in the document appropriate; and is the presumption in favour of sustainable development a balanced and workable approach?

18. The Presumption offers a real opportunity to set the broad parameters for encouraging good, high quality housing while delivering economic growth. It should also spur councils into ensuring that they have up-to-date plans in place, which in turn will add clarity to the development process.

19. Given the positive economic role that housing for older people plays (particularly via the construction process and in freeing up the housing chain, which eventually assists first time buyers), we welcome the statement in the Presumption that “significant weight should be placed on the need to support economic growth through the planning system”.

20. However, given the impact of our ageing population, we feel that the need to plan for demographic change should be included as a core part of the definition of what is “sustainable development”. It is difficult to contemplate a more sustainable form of development than that of well designed and located housing for older people and which helps to address many of the impacts of our ageing population. The need to plan for demographic change should therefore be included as part of the Presumption in Favour of Sustainable Development, and a fourth bullet to Clause 14 is suggested:

View positively housing applications that seek to address the changing nature of the UK’s demographic, such as specialist homes for older people across all tenures, when assessed against the policies in this Framework taken as a whole.

E. Are the “core planning principles” clearly and appropriately expressed?

21. Given the importance of the changing nature of the population, the increasing numbers of older people and the positive personal and public benefits of specialist housing for older people, the need to plan for demographic change should be included as one of the strategic planning principles of the whole NPPF, particularly as it impacts across Government. The following additional principle is recommended for Clause 19:

Planning policies should take into account the impact of demographic changes to society, particularly the needs and aspirations of older people and the need to plan for more suitable homes for the elderly across all tenures, including specialist retirement housing.

22. While it may be viewed that specific reference to the housing needs of older people is inappropriate in a document that attempts to be succinct, the NPPF already contains reference to other forms of development, such as new rail freight infrastructure and ports (both Clause 85) and bird habitats (Clause 15). It is our view that the demographic imperative of planning properly for our ageing population is important enough to be given significant weight and specifically referenced in the NPPF.

F. Does the NPPF give sufficient guidance to local planning authorities, the Planning Inspectorate and others, including investors and developers, while at the same time giving local communities sufficient power over planning decisions?

23. In our view the balance between the role of the developer, local authority and the community is about right. However, we have two particular concerns.

24. First, as the role of local residents in the planning process is crucial, it is important that their powers are clarified. Clauses 50 and 51 note the role of neighbourhood plans in the context of their relation to local plans. Clause 50 notes that neighbourhood plans must be in general conformity with local plans, suggesting that local plans take precedence if the two are in conflict on “strategic decisions”. However, Clause 51 then states “When a neighbourhood plan is made, its policies take precedence over existing policies in the local plan for that neighbourhood”. The two clauses therefore seem to be in contradiction. Further clarity is needed, particularly on what is deemed a “strategic” decision. It is our view that local plans must take precedence and the two should never conflict with other. Otherwise, there will be considerable scope for confusion.

25. Second, as stated earlier, local authorities should also be required to supply the results of the SHMAs to neighbourhood forums to ensure their neighbourhood plans are produced using the correct evidence base.

G. About McCarthy & Stone

26. McCarthy & Stone provides around 70% of all private retirement and Extra Care housing for older homeowners in the UK. To date, we have built approximately 50,000 dwellings across 1,000 different schemes. Our retirement housing customers are on average 78 years old and our Extra Care customers 83 years old. All of our developments are built for private ownership at an affordable price – usually 10% to 15% below the average house price in a particular area. Our two main development types are Retirement Living (similar to traditional “Category 2” type sheltered housing) and Extra Care (Assisted Living). More recently we have launched a new form of specialist housing - Tailored Care Living, as an alternative to traditional care homes, retaining home ownership with built-in personal and domestic care facilities.

15 August 2011

Prepared 20th December 2011