HC 1526 Communities and Local Government CommitteeWritten evidence from Shelter

I. Summary

1. Shelter welcomes the committee’s decision to hold an inquiry into the National Planning Policy Framework (NPPF). As the leading housing charity, campaigning across all tenures to bring an end to homelessness and bad housing, we draw on the experience of our front-line advice and support services in the development of our policy and research expertise. At the core of many of the problems we see—ranging from a lack of truly affordable rental accommodation, to high repossession rates and social housing waiting lists—is the ongoing critical lack of suitable homes and insufficient levels of supply. This is particularly true of affordable and social rented housing. In 2010–11 a record low of 105,000 new homes were delivered—the lowest level in any peacetime year since 1924—and just 23,800 of these were social rented homes.

2. As a result, Shelter welcomes the Government’s commitment to “increase significantly the delivery of new homes” We also support the sentiment that “everyone should have the opportunity to live in high quality, well designed homes, which they can afford, in a community where they want to live”. The proposed planning changes show a welcome commitment to tackling to our chronic shortage of housing. Shelter believes we must take this opportunity for proper reform so we can build the homes needed without delay.

3. For this aspiration to be achieved, the Government needs to set out clear planning guidance to accompany the NPPF, which needs to be sufficiently detailed. We want to see planning reform deliver housing in the right places, of the right type and at the right price to alleviate housing need. In order to deliver on this ambitious commitment, the government needs to work with local planning authorities and local people to ensure that there is a significant increase in the numbers of homes built across the country. Key to this is ensuring that local people are able to shape Local Plans and hold their local authority to account for the level of housing, particularly truly affordable housing, being delivered.

4. Local authorities must comprehensively record levels of housing need in their area and produce sufficiently robust plans to act upon it. This will not only help to ensure that local people can engage in the planning process more constructively, but will also give greater clarity to developers and people in housing need. The draft NPPF states that “the National Planning Policy Framework sets out the Government’s economic, environmental and social planning policies for England. Taken together, these policies articulate the Government’s vision of sustainable development, which should be interpreted and applied locally to meet local aspirations”. We welcome the requirement that authorities should prepare a Strategic Housing Market Assessment. However, we would like to see more detailed guidance on how authorities should assess housing need and set out in their Local Plans how they intend to meet it.

5. We appreciate the Government’s aim of trying to provide a more streamlined process by slimming down guidance, but we have concerns that in removing detail there is a risk of losing some of the important safeguards that protect standards of delivery and ensure that a sufficient proportion of truly affordable homes are delivered.

6. What is more, all stakeholders, including local authorities, developers and residents require a planning system that offers clarity and consistency. However, as it stands the NPPF leaves too many issues open to interpretation, which is likely to result in an adversarial planning system that creates uncertainty, appeals and legal challenge at a local level, with consequent delays to housing delivery. This could mean that some of the households who are suffering the most from our housing crisis, such as struggling first time buyers, people facing rising rents and those on social housing waiting lists, lose out as a result of delays in delivery of urgently needed homes.

7. It is also important to recognise that planning reform alone will not be sufficient to stimulate house building, particularly the delivery of affordable housing. A key factor in delivering the desperately need increased numbers of affordable homes is government investment. The fact that money for new social housing was cut by 60% in the last comprehensive spending review is likely to have a bigger impact on affordable house building levels than any planning reforms.

II. Evidence

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?

8. Shelter is concerned that in an understandable effort to reduce the length of planning guidance, and increase clarity, the NPPF has removed some important guidance, particularly in relation to assessing housing need and the definition and delivery of affordable housing.

9. While we understand the appeal of drawing up a shorter planning guidance document, we do not feel that brevity necessarily equates to clarity and are concerned that the framework does not give adequate guidance to developers, authorities or the Planning Inspectorate. Leaving too many issues open to interpretation could result in uncertainty, appeals and legal challenge, with consequent delays to housing delivery. These delays will not only prove hugely costly, but also undermine the Government’s aim to “increase significantly the delivery of new homes”.

10. However, there are a number of areas we were glad to see included in the draft NPPF. The draft NPPF categorises the key planning considerations into three sections: social (people), economic (prosperity) and environmental (place). It is encouraging to see that the NPPF attempts to balance these important factors on the face of the consultation. However, we fear that the removal of much of the detailed guidance on affordable housing could jeopardise the building of homes in the right places, of the right type and at the right price to alleviate housing need and create socially inclusive communities.

11. We are pleased to see a clear statement that all local authority areas need to conduct assessments of housing need via strategic housing market assessments (SHMA) and that these must address the need for “all types of housing, including affordable housing and the needs of different groups in the community (such as families with children, older people, disabled people, service families and people wishing to build their own homes)”. However, the definition of what constitutes affordability is important and we feel this has been significantly undermined (see more detail below).

12. It is encouraging that the draft NPPF states that local authorities must “plan for a mix of housing based on current and future demographic trends, market trends and the needs of different groups in the community (such as families with children, the elderly and people with disabilities)”. The ideal of more mixed communities is an important one and it is good that the Government has sought to recognise this in the NPPF. It is also important that Local Plans consider the likely impact of future trends. For example, some areas may see a change in housing need as a consequence of households displaced as a result of housing benefit cuts.

Provision for affordable housing

13. We are pleased that the draft NPPF makes clear that “where they [local authorities] have identified affordable housing is required, [local authorities should] set policies for meeting this need on site”. However, much of the value of this will be determined in the detail of what local authorities deem to be “affordable” as well as the methodology they use for assessing the level of housing need in a given area. For example, Affordable Rent homes (let at 80% of market rents) could still remain out of reach of the majority of working households and completely unaffordable for the most vulnerable families in the area. Research for East Thames Group has found that, in Newham, 65% of households would be unable to afford a three bedroom home at 80% market rents.

Local accountability

14. In order for any Local Plan to be worthy of the name it must be possible for local people to play a role in its formation and also allow them to hold their local authority to account for its delivery. In order to achieve this, it is vital that residents have access to data on their local housing market (including levels of housing need) that is robust, detailed and comparable. As a result we are pleased that the draft NPPF makes clear that there will be a requirement on authorities to “prepare a Strategic Housing Market Assessment (SHMA) to assess their full housing requirements, working with neighbouring authorities where housing market areas cross administrative boundaries” as well as a “Strategic Housing Land Availability Assessment to establish realistic assumptions about the availability, suitability and the likely economic viability of land to meet the identified requirement for housing”.

15. However, we have concerns that central government has not yet outlined sufficient detail on the methodology all local authorities must follow to ensure their Local Plans are sufficiently robust and judged to be “sound”. As a result Shelter is working with a number of planning and housing organisations to support local authorities on approaches to assessing housing need in a robust manner. We hope that this will play a role in ensuring that local authorities are able to undertake assessments that provide clear, comparable, accessible and transparent data, thus helping to put local people at the heart of the planning system. It is hoped that this cross-sector support will help local authorities to deliver the requirement to complete SHMAs themselves, without the need to employ costly consultants, as well as help to facilitate joint working between local authorities.

16. Furthermore, if local authorities are to effectively assess how well they are delivering against the need identified in their area and local people are able to hold them to account for this, it si vital that a proper system of monitoring is put in place. An important element of this was enshrined in PPS3 as local authorities were required to apply the principle of “plan, monitor, manage”, when considering housing policy. However, the draft NPPF would undermine a key element of this by removing the requirement for minimum key indicators for local planning and the need for annual monitoring reports to be published in a consistent format.

17. Shelter appreciates the overarching objectives of creating a more localised planning system and freeing local authorities from central government control: our attempts to assist with the guidance to accompany local housing needs assessment stands as testimony to that fact. However, greater local flexibility needs to be accompanied by robust accountability and we consider the principle of monitoring and acting upon key indicators an important means of maintaining this. It would also help to provide local people with a more accessible way of engaging with local planning decisions.

18. An example is provided in the draft NPPF impact assessment, where it is suggested that local authorities could remove the minimum threshold at which developments must provide affordable housing for all local councils on the grounds that this decreases the viability of sites in low demand areas and is therefore an obstacle to development. We are concerned that this effective exemption for developers will create a weaker negotiating position for local authorities, particularly those in low demand areas, making it increasingly difficult to deliver mixed development on sites.

19. In summary, we support the Government’s aims to introduce a more localised planning system and allow local people to be more involved in planning for their area. However, we are concerned that there is insufficient guidance being provided for local authorities to ensure that they create a local policy environment that allows people to play an active role. This is particularly true in terms of guaranteed access to robust local housing market data. Furthermore, in an effort to provide more succinct guidance the draft NPPF has left out valuable safeguards that ensured that new developments helped play a role in delivering truly affordable housing and that this housing was in the right places and of a sufficient standard.

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?

20. We welcome the recognition of the social aspects of sustainability, alongside economic and environmental aspects in the draft NPPF. As outlined above there is an important balance to be struck between the interests of people, the economy and the environment and a clearly defined idea of sustainability is an important part of this. If this balance is to be struck, then there needs to be an explicit emphasis on the social role of planning to ensure equal access to resources and services, which is in line with Planning Policy Statement 1: Delivering Sustainable Development (PPS1). Without this clarity we question whether the definition of sustainability will be workable in practice.

21. As a result we are disappointed that the definition of “sustainable development” contained within the draft NPPF excludes many of the important aspects of PPS1, which makes clear that: “Development plans should promote development that creates socially inclusive communities, including suitable mixes of housing. Plan policies should…seek to reduce social inequalities…address accessibility (both in terms of location and physical access) for all members of the community to jobs, health, housing, education, shops, leisure and community facilities”.

22. In particular, the requirement that local authorities should plan policies that “seek to reduce social inequalities” and “address accessibility (both in terms of location and physical access) for all members of the community” were particularly important in ensuring that there was a clear recognition of the important social role planning policy plays and the impact it has on the lives of people in an area, particularly those who are the most vulnerable to social exclusion.

23. We are also concerned that when development viability is established as a vital aspect of plan making there will be an imbalance in favour of short term economic development. The draft NPPF outlines that: “To ensure viability, the costs of any requirements likely to be applied to development, such as requirements for affordable housing, local standards, infrastructure contributions or other requirements should, when taking account of the normal cost of development and on-site mitigation, provide acceptable returns to a willing land owner and willing developer to enable the development to be deliverable”.

24. With the draft NPPF clear that the key objective of planning is to deliver “sustainable economic growth”, we are concerned that the other key aspects of sustainable development, namely social and environmental, will effectively lose out, on the basis of the reasons set out below:

In the short term, at the time of publication of the finalised NPPF in December 2011, existing development plans will be technically out-of-date. This means that presumption will apply to all developments and the NPPF will become the de-facto policy framework. Authorities will have to apply for a certificate of conformity for their existing plans. But such certificates granted for plans developed under previous planning policy may be open to appeal and legal challenge. There could be resulting disagreement and challenge over the relative legal weight of the presumption in the NPPF, as against the legal status of Local Plans, which may result in considerable delays. The application of the presumption where plans are “absent, silent, indeterminate or out-of-date” could also result in legal challenge to define these terms.

There have already been public clashes between environmental campaigners, developers and the Government regarding the safeguards for sustainability included in the new system. We are concerned that the lack of clarity will result in an adversarial planning system, which will require constant intervention of the courts. In order to guard against this Shelter would like to see more of the clarification regarding what constitutes sustainable development added to the NPPF, in line with the key sections of PPS1 outlined above. We feel that this could provide a clearer policy objective and be an important step in effectively streamlining the planning process by limiting legal challenges.

In the long term, a presumption in favour of sustainable development will become the core principle of local planning. As the framework focuses on short-term economic growth and fails to define in sufficient detail the wider social, economic and environmental considerations that need to be considered when deciding what constitutes sustainable development, such as housing affordability, it may be more difficult for authorities to defend long-term commitments to genuinely sustainable developments against shorter term, speculative housing sites, particularly in relation to the viability test set out on page 11 of the draft NPPF.

25. At Shelter we want to see a planning policy framework that delivers socially-sustainable development planning, with housing development in suitable locations offering a good range of community facilities and access to jobs, essential services and infrastructure in every local authority area. As a result we feel that it is important that the NPPF makes very clear that when balancing the planning needs for: prosperity, people and places, each component is given equal weight and short term economic growth is not pursued at the cost of long-term social sustainability.

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

26. The existing Planning Policy Statement 3 (PPS3) goes into a great deal of detail regarding affordable housing, including its definition, how it should be delivered, as well as specifications for size of social housing. In our submission to the CLG on the NPPF (February 2011), we said we were particularly supportive of the concise and succinct guidance on affordable housing contained in the existing guidance and believed that this must be retained. We are therefore disappointed that, in the draft NPPF, much of this important guidance has been removed. Our main concerns are outlined below:

27. Definition of affordability

The draft NPPF significantly changes the definition of affordable housing. The existing definition, contained in Planning Policy Statement 3 (PPS3), defines affordability as “a cost low enough for [households] to afford, determined with regard to local incomes and local house prices”. The draft NPPF defines affordable housing as housing where “eligibility is determined with regard to local incomes and local house prices”. This is a nuanced but very important change. It could result in a scenario where housing is considered affordable if its eligibility is determined by income, even if it is unaffordable to people of average or below average incomes. This is a possibility with “Affordable Rented” homes, as highlighted above.

28. Overall targets for affordable housing

Another important requirement set out in PPS3 is that local authorities should “set an overall (ie plan-wide) target for the amount of affordable housing to be provided”, reflecting the definition of affordability mentioned above. This was an important requirement in ensuring that all local authorities aimed to deliver upon the housing needs of residents in their area. However, the draft NPPF replaces this important requirement with one that merely states that local authorities must “illustrate the expected rates of [total] housing delivery through a housing trajectory for the plan period”. We feel that this significantly and worryingly waters down the requirements on local planning authorities. If local authorities fail to take sufficient action to ensure the supply of affordable housing to meet need we are likely to see growing numbers of people unable to meet their housing costs (particularly without reliance on housing benefit—which is vulnerable to future changes), undermining the stated aim of ensuring that “everyone should have the opportunity to live in high quality, well designed homes, which they can afford, in a community where they want to live”.

29. Clear delivery targets for affordable housing

Under the new framework Local Plans will be the primary mechanism for ensuring that development meets the needs of local people. It is vital that local plans set out clearly what different types of housing are needed, in terms of size, quality and tenure. It is therefore essential that Local Plans are based on proper assessments of local housing markets and local needs, including the need for different types of affordable housing.

30. Different types of affordable housing cater for households with different needs and different incomes. Not all types are appropriate or affordable for all households—especially following the introduction of the new Affordable Rent tenure.

31. Local Plans must therefore spell out what types of affordable housing are needed locally. In our submission to CLG on the NPPF, we said we were very supportive of the existing requirement to set separate targets for social rented and intermediate affordable housing. It will be important that authorities clearly state how many socially rented homes they aim to build for people who cannot afford Intermediate and Affordable Rent homes without becoming benefit-dependent. We are therefore disappointed that the requirement for separate targets has been removed from the draft NPPF.

32. Clear delivery targets are also needed for local people to be able hold their authorities to account for meeting the housing need identified in Strategic Housing Market Assessments.

Does the NPPF, together with the “duty to cooperate”, provide a sufficient basis for larger-than-local strategic planning?

33. It is critically important that local authorities that border one another, or have shared planning concerns (such as commuter areas around a conurbation) are required to co-operate with one another on planning decisions. As a result we are pleased to see that the draft NPPF is consistent with the Localism Bill in making clear that “local councils, county councils and other public bodies [are required] to engage constructively, actively and on an ongoing basis in the planning process”.

34. The issue regarding larger-than-local strategic planning again underlines the importance of local authorities using thorough and robust methodological assessments. Cross-boundary cooperation will be difficult without consistent methodology on assessing need and demand. In the case of housing, a great deal of integrated work between local authorities is necessary in order to address issues such as infrastructure, transport and population shifts. As a result it is important that local authorities have data on housing need that is broadly comparable to enable them to compare projections and work together effectively. As outlined above this requires local authorities to follow some form of robust methodological guidance on assessing housing need.

September 2011