Housing and Planning Bill

Written evidence submitted by By Cllr Edwina Hannaford and Cllr Joyce Duffin, Portfolio Holders for Planning, Housing and the Environment, Cornwall Council (HPB 132)

Housing and Planning Bill

Cornwall Council is the largest rural unitary authority in the country,

serving a population of just over half a million Crucially, Cornwall functions as a single economic entity as the vehicle for devolution. In July 2015 Cornwall was the first County to agree a devolution deal with central Government.

Providing affordable and decent housing is a key priority for the Council given the gulf between average property values and earnings; fuelled in part by competing uses such as demand for holiday and second homes. Despite recent growth in Cornwall’s economy we are still beset by low earnings on one side and high house prices, high levels of fuel poverty, the highest water bills in the UK, and high transport costs on the other.

The Council has focused resource on supporting the delivery of affordable housing by a range of means to try and address some of these issues and has over the last years been one of the most successful authorities. In the Country and the delivery of affordable homes . The delivery of affordable housing to meet our local needs will continue to be a priority for the Council going forward and one which we will seek Governments support to as partners.

Summary

Meeting our Housing Need

The focus on home ownership and changes to the definition of affordable housing implied by the Bill are of considerable concern to Cornwall, a low wage economy. Housing affordability to average wage ratios in Cornwall remain significantly different to the national average and Cornwall contains areas where house prices are more than ten times the average male salary. These concerns are amplified by the likely impact of the loss of high value Council stock and the likely lack of replacement dwellings in those areas.

In general the cumulative impact of the budget, autumn statement and this Bill are likely to create more uncertainty, reduces local empowerment and with it delay and loss of momentum in delivering homes to meet our needs. All of this conflicts with the stated aims of the Bill.

Finally while the impact assessment consider a range of issues the cost of implementation and operation of the provisions from Planning to dealing with Rogue landlords does not seem to have been adequately assessed ,reflecting the lack of early engagement and consultation on the Bill in general.

Our concerns regarding the specific contents of the Bill are set out below; however we wish to highlight the a lack of meaningful consultation prior to drafting of the Bill in the form of white or Green papers which makes it difficult for any Council to make constructive comment or engage in a meaningful way as to how the Bill could be improved. In addition, the lack of secondary regulation makes it impossible to understand how many of the clauses are to be addressed by the Council and what the resource and wider implications from each of the new duties.

In respect of each clause the Council wishes to raise the following issues:

Starter Homes (clauses 1-7):

1. Starter Homes are being promoted by the Government as an alternative to other housing tenures, such as shared ownership, social rent, discount market rent. The Council needs the powers and flexibility to shape the supply of genuinely affordable homes to meet needs of different people in their area, in line with its local plan and the National Planning Policy Framework (NPPF).

2. We recognise that there is demand for affordable forms of home ownership but in any local objective assessment of housing need, the demand for such products is far outstripped by the demand for rented homes. In Cornwall, we have 28,000 households on modest incomes, seeking rented homes and only 1,500 households looking for affordable housing to buy. Even if the new products widen the reach of homeownership and create more mobility from social housing through "pay to stay" and right to buy proposals, we remain concerned that the demand for starter homes will not reflect the level of resources and policy priority granted to them.

3. In terms of the investment to deliver 200,000 starter homes, we understand that there is no separate allocation of funding for London. Not only is that likely to result in significantly reduced funding allocation being shared outside London and the SE, but the value for money per unit will be far lower and we would therefore question whether 200,000 homes can be delivered were this to result. We would recommend a separate allocation of funding for the capital.

4. There are issues about how the requirements will be operated at Local Authority level. For instance, we understand that it will be for LAs to establish what 20% of market value will be but there is, as yet, little guidance on how this ought to be valued and what scope there is for local discretion to change the £250,000 limit. We understand that these will be controlled by a legal agreement which will bring additional cost and bureaucracy to homes which will ultimately be released ‘at least 20% below market price’ after the first 5 years of occupation. Who will monitor and manage the housing?

5. It has been a central tene t of affordable housing policy for many years that the planning system either locks in the affordability of housing in perpetuity through mechanisms like section 106 legal agreements and rent controls or it permits staircasing and the recycling of value when disposals happen. The starter homes initiative represents a significant departure from this approach. This is the main concern the Council has with the proposed product – value is gifted to an individual household which represents a highly skewed level of subsidy which is not then available to be re-invested in delivering further homes. The 20% discount, we understand, can further be supplemented with a help to buy ISA which might result in an individual subsidy of perhaps £75,000. We would question whether this leakage of value is fair or represents the best use of public funds.

6. The Council supports a number of examples of successful low cost home ownership products where not just housing associations but private developers have covenanted to provide back the proceeds from staircasing upon sale. Such products successfully promote home ownership but preserve the benefits for future occupiers. The main b arrier to these products is lenders’ view of s106 legal agreements. We have campaigned for some time for Government assistance in securing greater access to high street lending for these products and would ask the Government to consider what more could be done to unlock mortgage lending for these schemes .

7. Similarly, in an era where there will be far less public investment in affordable housing, the recycling of the proceeds of sale could be a valuable future investment stream to supplement of replace public subsidy. H ousing associations have proved that there are significant financial benefits from using RCGF (recycled capital grant funding) which has increased the level of local investment. This model could be extended to private sector providers.

8. Rural exception sites have played a vital role in the provision of affordable housing in perpetuity in Cornwall, helping thousands of households find a home that they can afford to rent or part-purchase. The proposal to allow exception sites for starter homes could significantly reduce the willingness of landowners to make sites available for affordable housing outside of starter homes. As an Authority Exception sites have been a very successful vehicle for delivery of affordable homes to meet local needs. Over 1000 dwellings have been provided in this way over the last 5 years. The loss of this approach or undermining its acceptance with local communities and landowners could significantly reduce the delivery of local needs housing.

Right to Build (Clauses 8-11)

9. The Council is supportive of the provision of self-build and custom build Housing and has been involved in the HCA National Pilot. However concern is raised regarding the exact implications and lack of clarity around this duty to meet the demand on the register

10. Burdens added through the creation and maintenance of brownfield and self-build registers must be acknowledged and recompensed for through additional burdens payments to the Council.

Permissions in Principle (PiP) (Clause 102)

11. The inclusion of permission in principle implies that the LPA or Neighbourhood Plan Group will undertake the work to enable that development and if so, how will this additional burden be recognised. This could potentially add considerably to the expense of production and the time taken to make plans. This could further slowdown local plan production. Additional burdens created by the need for additional work on sites will need to be considered by Government.

12. The proposal to grant permission in principle for sites in Neighbourhood Plans is of concern, because examiners do not explore soundness issues in examination of neighbourhood plans in that level of detail. Does the Neighbourhood plan process need to change to reflect this proposed change?

13. Whilst it is understood the current intention is to limit permission in principle to 10 dwellings this is not set out in the Bill, Can a site that could potentially be EIA development or require surveys of any kind (nature, contamination, etc) be permitted in principle without the establishment of that detail? Sites requiring EIA or surveys for protected species cannot be permitted where the impacts are unknown as conditions cannot be applied to confer permission and require later investigation... If these are then to be progressed is it for the local Authority to undertake this work in advance of designation at the cost of the local tax payer rather than the landowner?

14. Better guidance is required to understand the technicalities of how the PiP system would operate. What is a ‘technical issue’ ? Is the height of buildings or design a technical issue or one which will no longer be subject to consideration through the planning process?

15. The ability of landowners or others to appeal PiP would significantly slow the process and add to the expense and complexity. In general this does not appear to offer to speed up the process but could increase uncertainty.

Brownfield Land Registers (Clause 103)

16. The proposals for the brownfield register are difficult to understand in advance of secondary regulation. However there is already confusion by the suggestion of a two part register. Is the inclusion on the second stage of the register, i.e. with deemed consent, subject to any formal process such as independent examination? Sites progressed through a local or Neighbourhood plan will be tested in this way but there is no clarity on the approach for Brownfield sites.

Extension of Permitted Development Rights

17. Additional changes to permitted development potentially add to the pressure for infrastructure for communities but do not require any contribution to be paid towards this.

18. As a Council we are aware of dissatisfaction of Neighbourhood Planning Groups regarding the continued changes to the planning system. They tell us that these liberalisations are removing choices from the community and the ability for them to effectively shape places and should be a decision made by local councils rather than central Government as these can have a profound impact on the planning of the area in terms of the required social and physical infrastructure.

Vacant high value local authority housing (clauses 62-72):

19. Cornwall Council has not carried out a revaluation of its housing stock since 1999. However Right to Buy information and general assumptions on property prices in Cornwall, as well as the likely number of properties which would fall void on an annual basis would indicate that potentially up to 4% of the stock could be sold each year.

20. Below are the estimated figures (based on 2014/15 figures) for the potential of high values sales based on the valuation thresholds provided at the time by Government:

Cornwall Council
Number of HRA void properties in authority in 2014/15 (include all voids including those arising as a result of transfers)	966
Estimated number of HRA voids in 1 above whose open market value exceeded the relevant caps for region and therefore would have been required to have been sold (refer to caps in table according to your regional cap)	43
2 as a percentage of 1	4.455
Estimated total gross receipts from sale of HRA void properties in 2 above that would have been required to have been sold under such a policy	6.475m

21. Cornwall Council has a housing stock of 10, 500 properties which are mainly in 3 of the 6 former district Council areas of North Cornwall, Caradon and Carrick. The properties are predominantly in the main towns of. However, there are Council properties in many of the small rural and coastal villages. These are the areas in which Council properties have a higher value as these villages often have a thriving second and holiday home market which has a significant impact on the market.

22. Cornwall is a very rural county, with very limited public transport and significant distances between the major towns and some coastal and rural areas. Some of our villages are already seeing up to 50% of properties being sold for second or holiday homes. The gradual reduction in social housing as well as private housing through sale of high value voids will mean that the mix of tenure in these villages will be eroded. This has implications not only on those people in housing need who wish to continue to live in their home villages, it also impacts on the ability of employers in these areas to secure employees for lower paid seasonal and key service jobs.

23. Whilst 1 for 1 replacement is the promise, the locations of replacement homes are unlikely to be in the same vicinity as current social housing. This will have an implication on the Council’s ability to meet its housing need responsibilities and may have a negative impact on the use of temporary accommodation if we are unable to find suitable housing for those people who have a specific need to live in particular areas. Cornwall has worked hard over recent years to continually reduce the use of B&B and temporary accommodation, against the national trend, and would not want to see this reversed.

24. Another important factor to consider is the low wage economy in Cornwall which puts a massive pressure on social rented housing as the most affordable housing option (over 28,000 on the waiting list). One for one replacement, if achievable, would be very unlikely to include any social housing with new grant funding removed, but be predominantly low cost home ownership, outside the reach of many people in Cornwall even with incentives such as Help to Buy. This may increase homelessness as Cornwall has relied heavily in recent years on delivery of affordable rent homes to meet housing need.

Reducing regulation (Clause 73):

25. This section mainly refers to the regulation of Housing associations in terms of Disposal Consent regime and Asset Management. It does however mention Allocations Policies.

26. "Allocations policies: giving housing associations greater control over who they house would allow them to better meet housing need and drive greater efficiencies. The Government would work with the local authority sector to examine how we can ensure that nominations to housing association stock are appropriate to the properties concerned."

27. Cornwall Homechoice is the Housing Register/Choice Based lettings scheme for socially rented housing properties in Cornwall. The scheme has a common assessment framework for the assessment of housing need with a broadly consistent approach to marketing and shortlisting households for vacant properties. If nominations rights were removed this would inevitably put additional pressure on the Council to fulfil its statutory requirements. Currently the Council owns stock in part of the mid, south east and north east of Cornwall. Meeting the needs and offering suitable/reasonable offers accommodation for households with a local connection and a need in the remaining areas of Cornwall will become increasingly challenging. To compound this problem as Housing associations are increasingly moving to affordable rent products those households most in need may not meet the financial assessment criteria for these products.

High income social tenants: mandatory rents (Clauses 74-83):

28. The Council has provided a response to the Governments consultation on "pay to stay – fairer social housing rents". Whilst we have responded to the consultation, the lack of clarity and detail around the proposals make it very difficult to provide an accurate and considered response.

29. It is suggested that a taper could be introduced where household earnings in excess of the minimum income thresholds would pay increasing amount of rent as their income increase. Whilst in principle a tapering system would seem a ‘fairer’ approach in the implementation of this Policy any benefit to the introduction of a taper could be offset by an increase in the costs to administer a more complex system with many more variables due to different rent levels.

30. Our view is that for those households who are on the cusp of any income threshold the policy would not support the "better off in work" objectives of the government and result in creating a disincentive to work.

31. Views are then sort on ‘whether the starting threshold should be set in relation to eligibility for Housing Benefit.’

32. Due to complexity of housing benefit (HB) eligibility, which also takes into account capital, starting thresholds should not be set in relation to this criterion. The Council’s Revenues and Benefits service has provided an initial response to the consultation. They believe that the vast majority of people on 30k are likely to be employed and even with dependants are unlikely to qualify for benefit even where the rent is charged at an affordable rent (80% of the market rent).

33. In addition, the consultation states that where several people live in the property the highest two incomes should be taken into account. Our understanding is that this will only apply to tenants and their partners and not extended to non-dependants, clarification will be required. If this is not the case and non-dependant income is considered and a combined income exceeds £30,000 the household would then be subject to an increase in rent. Therefore, if the rent increases it would follow that HB will increase as well if current HB regulations are applied. What happens if the non-dependants move out?

34. Views are also sought on the ‘estimate of the administrative costs and what are the factors that drive these costs’.

35. This is an area of significant concern as assumptions are made in the consultation document around the modification of existing systems, in reality the impact on administration is complex and potentially involves significant costs both over the short and long term.

36. In partnership with Cornwall Housing Ltd a detailed appraisal is required in order to consider fully the true administrative costs and resources required. This cannot be completed prior to consultation end date, primarily due to the need for further clarity on the Policy an issue common to a number of the areas of concern with the Bill as currently drafted.

December 2015