Housing and Planning Bill

Written evidence submitted by Milton Keynes Council (HPB 09)

Housing and Planning Bill

1) Starter Homes

1. Milton Keynes Council (MKC) supports the Government’s aim of building more homes but the provision of new homes needs to be planned with the provision of jobs, schools, shops and necessary infrastructure and facilities in order to create sustainable communities . According to the think tank Centre for Cities o ver the past decade Milton Keynes has delivered more homes, more jobs and experienced the fastest population increase (in percentage terms) of any local authority in the country. (Source: Centre for Cities, Cities Outlook 2015) As the fastest growing local authority area in the UK , the Council considers it has a wealth of expertise to draw on in delivering growth . To illustrate this point the Council is currently delivering one of the largest school building programmes in the UK.

2. As a New Town and the largest planned settlement ever constructed in the UK, a key feature of Milton Keynes is that infrastructure and facilities are provided early on alongside those new dwellings. This point is often summarised as ‘I’ before ‘E’ . I nfrastructure before E xpansion . Providing schools doctor’s surgeries etc. as early as possible in a development has enormous benefits and is a valuable selling point for housing developers to prospective house buyers.

3. Milton Keynes Council’s Local Investment Plan (LIP) produced in March 2015 sets out the vision and aspirations for the Milton Keynes area as it continues to grow with the aim of delivering 28,000 new homes and over 40,000 new jobs during the lifetime of the Council’s Core Strategy (2010-2026). The LIP identifies a requirement to fund around £1,064m of infrastructure to deliver the planned growth of Milton Keynes to 2031, a figure which is likely to increase over time as additional needs are identified. Funding identified to date stands at around £644m leaving a significant funding gap. An important area of focus is the £72m shortfall in funding for those items which are identified as critical infrastructure items to support the delivery of growth, and a £145m shortfall in necessary infrastructure . (F igures are rounded.) .

4. The Council’ s concern is that the provision of starter homes will increase pressure on existing infrastructure and services particularly education and health facilities and worsen the funding gap referred to previously . Starter homes developed without any contributions towards necessary infrastructure such as schools cause s concern because the Council has a statutory duty to provide:

· 15 hours a week education to the 40% most deprived (2 year olds) in the B orough.

· 15 hours a week education to all 3 and 4 year olds. This is changing to 30 hours a week with effect from September 2017

· Sufficient school places to all children of school age.

5. Because starter homes are for people under 40 years of age they are likely to attract couples either already with, or planning, children, specifically young children.  Insufficient funding to address the direct impact of such homes is likely to adversely affect Milton Keynes Council’s ability to deliver the education provision required for these families.

6. Additionally without a mechanism to secure any financial or ‘in-kind’ benefits (such as the provision of land for the provision of a school or a medical centre) there will be no way of mitigating the impact of these starter homes. In the absence of an alternative funding mechanism to remedy any shortfall in provision, the Council and local ratepayers will inevitably incur additional expenditure at a time when economies in public spending are being made.

7. In the Bill the Government is placing a specific duty, which will be fleshed out in later regulations, to require a certain number or proportion of Starter Homes on site although regulations may vary this requirement for different areas . The Council would appreciate more detail being provided by the Government of how it in tends to apply and implement this requirement and answers to the following questions .

8. What proportion of starter homes does the Government expect to be provided on a housing site? This is particularly important for our regeneration programme and council house building programmes. These programmes are providing the housing that we need. If we are forced into building starter homes we are concerned that we will have a housing type that we don't need and less land to develop the housing that we do need.

9. Will starter homes be provided on all housing sites irrespective of the size of the site?

10. Will there be a threshold size of site at which starter homes will be provided? Housing on s maller and medium sized sites often has the advantage of being able to be delivered more quickly and these sites may not require the provision of large scale infrastructure . However, larger housing sites will require infrastructure and if starter homes make no contribution towards its provision , it will fall to th e local authority to provide it or will non-starter housing units be expected to make an additional contribution?

11. If the development of starter homes on housing sites does generate a ‘tipping point’ in terms of the provision of infrastructure and the development makes no contribution to wards that infrastructure; in what circumstances will a local planning authority be justified in refusing the application? What evidence should be used by the Council in making that decision?

12. Can a developer introduce starter homes retrospective to an existing consented housing site ? The point here is w hat is to stop a developer with planning permission for a housing development, which is ready to start or is currently being implemented deciding not to proceed with t heir existing planning permission . If they revise their scheme to include starter homes , th e developer may avoid making contribution s towards infrastructure and facilities which a re generated by the development . This is a very real issue in Milton Keynes under the MK Tariff (a large section 106 agreement) developers have signed up to delivering over £300 million of contributions on the western and eastern side of the city. The Council does not want to see a potential loophole being created where developers walk away from commitments they have entered into.

13. Has the Government undertake any research looking at the financial consequences, implications and impacts of this policy? In Milton Keynes, the average price of a terraced house is around £147,000. This is beyond the reach of someone on the average wage of around £26,000.

14. Even though Milton Keynes is less than 50 years old, the Council has an active regeneration programme for the redevelopment of some of the older housing estates within the city and the Council is building Council houses. The Council is concerned if it is forced into building starter homes it will have a housing type that it does not need and less land to develop the housing that it does need.

15. Starter Homes should be part of the market housing requirement, not something that is offered in place of affordable housing. It should also be noted that a 20% discount is insufficient to meet the needs of first time buyers given the premiums that new build housing commands over second hand properties (currently being traded on the market for £180k - £200k).

16. In Milton Keynes we have 284 households in temporary accommodation that need rented housing. The proposals to have Starter Homes will not help us to meet our most urgent needs. We would therefore not support any proposal to amend the definition of affordable housing to include Starter Homes.

17. For further comments about the Council’s concerns on starter homes see the appendix to this report.

2) Self –Build and Custom Housebuilding

The N ational Planning Policy Framework (N PPF ) clearly sets out that councils should plan locally for a mix of housing to reflect local demand; therefore a new legislative duty on councils for self-build and custom-build delivery is unnecessary.

3) Rogue Landlords and L etting Agents in England

1. Banning Orders : The Local Government Association (LGA) has highlighted the lack of effective deterrents for rogue landlords and letting agents as a serious weakness in the ability of councils to crack down on the worst operators. We welcome new sanctions to prevent rogue landlords and letting agents from operation and will be working with Government to make them clear and workable for both councils and landlords. We recommend that Government should urgently look at tougher penalties from magistrates supported by the introduction of sentencing guidelines.

2. Database of rogue landlords : The introduction of banning orders will be more meaningful if councils can easily access information about them and use this to inform their enforcement work. The introduction of the database must be properly resourced and allow councils to focus on frontline work rather than administrative processes.

3. Rent repayment orders : Extending the use of rent repayment orders could help councils tackle a wider range of offences. We would be happy to work with Government to streamline the process for issuing rent repayment orders and encourage their use by reducing the financial risk to councils.

4 ) Right to Buy for Housing Association T enants

1. The Council feels that the right to buy for housing associations should not be paid for by local authorities.

2. We have previously commented that we currently have 284 homeless households in temporary accommodation. As a result we can ill-afford to lose any affordable housing stock in our Borough.

3. The draft Bill says practically nothing; just that there will be regulations setting out the amounts local authorities must pay – so any difference between those amounts and the actual figures are the local authorities’ risk.

4. The regulations and the calculations that the Government will prescribe need to be built on an agreed (or at least objective) evidence base, and should be properly consulted upon. We are very concerned about the uncertainty due to this risk, and its inevitable consequence for our Regeneration : MK programme and our new council house building programme

5. We are also concerned about the i mpact on Rural Areas . Low-cost properties to buy or rent are in short supply particularly in rural areas. As housing association dwellings are bought under the right-to-buy scheme, they will inevitably be resold on the open market at prices way beyond the reach of those they were originally built for. Thus families and young workers face the prospect of being forced out. Will the Government ensure restrictions are in place and that there is a guarantee that each home sold under the scheme will be replaced? Inevitably because of the time taken to construct new dwellings the provision of replacement housing association properties will lag behind the sale of existing housing association properties.

5 ) Pay to Stay - Higher Rents for High Income Social T enants

1. Local authorities want to manage their homes to meet best the needs of communities and should be free to set differential rent levels based on local circumstances and housing markets.

2. We are concerned that the Bill seeks to establish a process for taking a sum of money from councils based on a national estimate that will unlikely reflect actual local conditions. Councils, like housing associations, should be able to retain the additional income generated from these rents to build new homes. This would have far greater benefits for local communities than the money going to the Treasury. This is important in light of the reductions in social rents contained in the Welfare Reform and Work Bill.

3. In Milton Keynes we estimate that around 1,300 of our tenants will be affected (around 11% of the social rented stock). There is also a perverse disincentive in the pay to stay idea in that hard working people will now face a hike in their rents, and be forced to move (possibly away from their jobs) when properties to rent and buy are becoming harder to find.

http://www.theguardian.com/housing-network/2015/oct/23/pay-to-stay-housing-tory-policy-penalises-hardworking-people

6 ) Assisting Local Authorities' Private Sector Enforcement W ork

1. The Council notes that Part 5 covers a range of measures including:

· C hanges to the ‘fit and proper person’ test applied to landlords who let out licensable properties; and

· A llowing arrangements to be put in place to give authorities in England access to information held by approved Tenancy Deposit Schemes with a view to assisting with their private sector enforcement work.

2. This is a welcome flexibility for councils in private housing enforcement activity .

7 ) Speeding up the P lanning S ystem

1. Local Planning : Councils have made considerable progress with plan making. Getting plans in place requires significant time and effort and we look forward to working with Government on how the process could be simplified. It is crucial that plans are developed with the full involvement of local communities, and that they are not undermined by national policy changes. A plan led system provides more land and greater certainty of delivery. It is the best way of providing more land for housing and other development and provides greater certainty for the delivery of development. Planning Minister Brandon Lewis on the 15 September 2015 launched a new group of experts to help streamline the local plan-making process. The Council welcomes this Government initiative. It is increasingly difficult to make a plan and we see the improvement of this process as a high priority if the Government wishes to see balanced communities.

2. Permission in Principle and local registers of land : It is important that that the planning system remains proportionate with local communities continuing to have a say on decisions that affect them. Planning controls exist to ensure developments are of benefit to local communities. Councils and their planning committees are central to that process, allowing local people to have an influence over the changing shape of their neighbourhoods. New burdens funding should be provided to fully cover the costs of councils preparing, publishing and updating the proposed register. Introduction of a sequential test for brownfield land would help councils to ensure developers prioritise brownfield sites . We are concerned about incremental loss of employment land and the longer term consequences for this. M ilton Keynes has been planned in a very distinctive way and this proposed policy could have the effect of allowing for back to back housing across urban areas (i.e. purely housing development without other uses ) with no allowance for the other uses which are of equal value in creating a balanced society.

3. Brownfield sites within Milton Keynes are most likely to be used or previously used for employment purposes. The Council supports the reuse of brownfield sites for residential purposes, when such sites are no longer fit for employment purposes. Indeed as part of its evidence base for its new Local Plan, it is examining which existing and vacant employment sites are still fit for employment purposes or can be used for alternative purposes such as residential use. However, the Council also needs to ensure it has sufficient land of the right type and in the right place to meet its economic development needs. MKC notes that it will be for the local authority to compile and maintain a register of brownfield land. In the Council’s view it must be left to the discretion of the Council, which brownfield sites appear in that register. This is to avoid the incremental loss of employment land and the potential adverse longer term consequences arising from this. As a planned New Town Milton Keynes was designed with a dispersed land use pattern of employment areas surrounded by residential areas and other uses. This dispersed pattern of land uses helps to avoid very high concentrations of employment land in one area and minimise traffic congestion on the city's road network, because employment areas are the main generators of traffic. Additionally, such a land use pattern helps create opportunities for people to live close to their place of work and travel to work by means other than the car.

4. Neighbourhood Planning : Councils are responding positively to neighbourhood planning and have already designated more than 90 per cent of neighbourhood area applications. Imposing a statutory time limit for the determination of neighbourhood designation applications is unnecessary, which should reflect local conditions to ensure due consideration to each application. Government guidance already makes clear that councils should set out and share a decision making timetable which provides clarity for applicants;

5. Local authority planning performance : Councils recognise the importance of timely and quality planning services, however the planning performance regime is an unnecessary narrow measure which focuses on process targets rather than good quality service provision. Government should work with councils to develop a sector-led approach to improvement. Milton Keynes Council considers that one of the best ways of improving local authority planning performance is to resource planning departments properly. According to the recent report published by the Local Government Association planning departments have seen a 46% reduction in funding over the past five years and nationally set planning fees are preventing councils from recovering the full cost of processing applications, with local tax payers covering a third of the costs estimated at £450 million since 2012. The introduction of locally-set planning fees would provide more resources to enable local authority planning departments to deal with planning applications and deliver the homes we need. This is demonstrated by the LGA article available at

http://www.local.gov.uk/web/guest/media-releases/-/journal_content/56/10180/7550608/NEWS

6. Nationally Significant Infrastructure Projects to include housing: The proposal to extend the Nationally Significant Infrastructure Projects regime and to shift decision to the Planning Inspectorate will undermine local accountability and community influence in the planning system. The Government should work with councils to empower community decision making and to enable swift decisions at the local level, for instance by allowing councils to set planning fees locally, rather than expanding the remit of an unelected quango.

8 ) Compulsory Purchase

1. We would agree with the LGA’s view with this section of the Bill.

2. We broadly welcome the ambition to make the process for compulsory purchase clearer, faster and fairer with an overall aim of bringing more land forward for development.

3. The Council would like to see the reforms go further to include:

· A default position that all decisions on confirmation of a compulsory purchase order are delegated to the acquiring authority;

· A more fundamental consolidation and streamlining of the legislative provisions for compulsory purchase;

· S tronger compulsory purchase powers where planning permissions have expired and development has not commenced;

· S tronger compulsory purchase powers to tackle empty homes; and

· P owers for councils to direct the use of publicly owned land .

APPENDIX: ADDITIONAL INFORMATION ON THE EFFECT OF STARTER HOMES IN MILTON KEYNES.

All planning obligations requested from a development are now required by statute to meet the tests of Regulation 122 of the CIL Regulations 2010 in that they must be :-

· N ecessary to make the development acceptable in planning terms

· D irectly related to the development; and

· F airly and reasonably related in scale and kind to the development.

There is no question therefore of Local Authorities using planning obligations for nice to have’s or to meet other financial pressures, if it ever did happen, it cannot happen now.

Therefore the intention of the Housing and Planning Bill to give a blanket exemption from planning obligations to certain tenures on a development can only do one of two things, transfer the burden of funding the requirements for social infrastructure arising from the development to the other tenures on that development, thereby further impacting on the affordability of the majority of the market sale housing, or transfer the burden to some part of the public sector, in the first instance the local authority who is unlikely to be able to meet the additional burden and who will ultimately have to look to Central Government for further funding support.

If this additional funding is not forthcoming then you will have a position where the new development places additional unmitigated burdens on existing infrastructure which gradually over time will erode the quality of service provided to existing settlements and populations. This is only likely to harden positions on the acceptance of new development and do the exact opposite of what the Government is claiming its new neighbourhood based planning regime is setting out to achieve.

To give an example around 40% of our planning obligation requests are directed to meeting primary/secondary education needs (this proportion is higher on smaller developments). On a typical mid-range development of say 50 units this may equate to £400,000 (say £8,000 x 50). If ‘starter homes’ are exempted and equate to 20% of the units on this development then we will either need to redistribute £80,000 (£8,000 x 10) over the other 40 units (50-10) meaning we need to seek another £2,000 from each property, which will undoubtedly be passed on to purchasers, or we need to seek another £80k in additional Basic Needs Funding from the D epartment for Education ( D fE ) . If additional DfE funding is not forthcoming then the number of new school places is restricted until cumulatively, in an area of high growth like MK, we start to have shortfalls equating to entire new schools.

A significant number of new properties in expansion areas are already purchased by first time buyers under the age of 40, quite a few of these are being assisted by the Help to Buy scheme which allows them the access they need to mortgage finance. Obviously this places a ‘commitment funding’ strain on Central Government who are essentially underwriting the guarantees on this scheme but over time, assuming the economy continues to progress, this commitment will balance out. Replacing this underwriting commitment with a funding shortfall which needs to be made up by the public sector makes no sense in a country which is supposedly working to eliminate its structural deficit, even if the intention seems to be to have Local Authorities carry the burden.

The Government may well point to the Community Infrastructure Levy ( CIL ) and the exemption which is already allowed for Affordable Housing which Starter Homes will displace but the same arg uments apply here which is why a uthorities in high growth areas like M ilton Keynes are extremely reluctant to embrace CIL, we cannot afford the huge loss in infrastructure funding that this will cost.

November 2015

Prepared 10th November 2015