Planning for the right homes in the right
places: consultation proposals
2
© Crown copyright, 2017
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September 2017
ISBN: 978-1-4098-5086-1
1
Contents
Scope of the consultation 2
Foreword 4
Introduction 6
Proposed approach to calculating the local housing need 8
Statement of common ground 21
Planning for a mix of housing needs 29
Neighbourhood Planning 31
Proposed approach to viability assessment 33
Planning fees 38
Other issues 40
About this consultation 42
Consultation response proforma 43
2
Scope of the consultation
Topic of this
consultation:
This consultation seeks views on a number of changes to
planning policy and legislation. Some of these changes were
foreshadowed in the housing White Paper available at:
https://www.gov.uk/government/publications/fixing-our-broken-
housing-market
Scope of this
consultation:
The Department for Communities and Local Government is
consulting on new planning proposals which will involve
amendments to the National Planning Policy Framework and
regulations.
Geographical
scope:
These proposals relate to England only.
Impact
Assessment:
N/A
Basic Information
To:
This consultation is open to everyone. We are keen to hear
from a wide range of interested parties from across the public
and private sectors, as well as from the general public.
Body/bodies
responsible for
the consultation:
Department for Communities and Local Government
Duration:
This consultation will begin on Thursday 14 September and will
run for 8 weeks until Thursday 9 November 2017. All responses
should be received by no later than 23.45 on 9 November.
Enquiries:
For any enquiries about the consultation please contact:
planningpolicyconsultation@communities.gsi.gov.uk
How to respond:
Consultation responses should be submitted by online survey:
https://www.surveymonkey.co.uk/r/planningforhomes
Consultations on planning policy receive a high level of interest
across many sectors. Use of the online survey greatly assists
us in our analysis of the responses, enabling more efficient and
effective consideration of the issues raised for each question.
We have listened to concerns raised about the use of an online
survey in the past and have made a number of adjustments to
the survey ahead of this consultation. The online survey will
allow respondents to: select the sections they wish to answer,
without having to go through the whole survey; save and return
to the survey later; and submit additional information or
evidence to support your response to this consultation.
3
Further advice on how to use these new features is available on
the home page of the online survey.
We strongly encourage all respondents to respond via the
online survey, particularly organisations with access to online
facilities such as local authorities, representative bodies and
businesses. However, should you be unable to respond online
we ask that you complete the pro forma found at the end of this
document . Additional information or evidence can be provided
in addition to your completed pro forma.
In these instances you can email your pro forma to:
planningpolicyconsultation@communities.gsi.gov.uk
Or send to:
Planning Policy Consultation Team
Department for Communities and Local Government
3
rd
floor, South East
Fry Building
2 Marsham Street
LONDON
SW1P 4DF
4
Foreword
As anyone who has tried to buy or rent a home recently would probably tell you, the
housing market in this country is dysfunctional. The root cause is very simple: for too long,
we haven’t built enough homes. The damaging financial crisis ten years ago compounded
this problem.
Thanks in part to action we’ve taken over the past seven years, the situation is improving.
Last year saw more planning permissions granted than ever before, while the number of
new building starts is at its highest level in nearly a decade. But there’s much more to do.
Our housing White Paper, published earlier this year, set out how we’re going to get
England building. We are delivering our 2015 commitment of a million new homes by
2020, and want to supply a further half a million by 2022.
The measures in this consultation will help ensure that local authorities plan for the right
homes in the right places. This means creating a system that is clear and transparent so
that every community and local area understands the scale of the housing challenge they
face. We do not want local authorities wasting time and money on complex, inconsistent
and expensive processes. This only creates lengthy bureaucratic arguments, often behind
closed doors, and isolates local communities.
The new approach proposed will give local communities greater control so they can make
informed decisions about exactly where much-needed new homes should be built. In doing
so it will help to tackle the lack of affordability of housing in this country, and support those
families who want the security of owning their own home.
The proposals in this consultation provide a more robust starting point for making these
important decisions. Without the right starting point we can’t make the wider reforms to the
housing market that will ensure homes are built faster, by a more diverse housing market,
to meet the needs of ordinary households and communities now and in the future.
5
Nor is this consultation just about the numbers. It’s also about how areas can work
together where communities’ needs cannot be met locally. And it’s about putting the right
resources into local planning authorities so their plans can be delivered and communities
can see the benefit of high quality, well-planned homes.
We recognise that this is not easy. That is why we launched our £2.3 billion Housing
Infrastructure Fund earlier this year to ensure essential physical infrastructure, such as
schools and roads, is built alongside the new homes we so badly need. We will explore
bespoke housing deals with authorities in high demand areas with genuine ambition to
build. We will also provide further support to local authority planning departments with a
£25 million capacity fund.
This consultation also sets out our ambition to publish a revised National Planning Policy
Framework in Spring 2018. This will ensure that we not only plan for the right homes in the
right places, but that we turn existing and future planning permissions quickly into homes
through reforms such as the Housing Delivery Test.
Nobody likes indiscriminate, unplanned and unwelcome development. But most of us are
willing to welcome new homes if they’re well-designed, built in the right places, and are
planned with the co-operation of the local community. To win the support of local
residents, we have to build homes people want to live alongside as well as in.
This consultation is the first step in making sure all that happens and making sure our
children and grandchildren can access the safe, secure, affordable housing they need and
deserve
Rt Hon Sajid Javid MP
Secretary of State for Communities and Local Government
6
Introduction
1. The White Paper, Fixing our Broken Housing Market
1
(“the housing White Paper”), set
out proposals to tackle the housing challenge that our country faces, as a key part of
building a stronger, fairer Britain where people who work hard are able to get on in life.
It argued that we need to build more houses of the type people want to live in, in the
places they want to live. This requires a comprehensive approach that tackles failure at
every point in the system.
2. The housing White Paper set out four main areas where action is needed:
a) planning for the right homes in the right places - to make sure that enough land is
released, that the best possible use is made of that land, and that local communities
have more control over where development goes and what it looks like;
b) building homes faster where communities have planned for new homes, ensuring
those plans are delivered to the timescales expected;
c) diversifying the market to address the lack of innovation and competition in the
home-building market; and
d) helping people now tackling the impacts of the housing shortage on ordinary
households and communities.
3. The housing White Paper contained a number of proposals to reform planning to
achieve these objectives. It reinforced the central role of local and neighbourhood
plans in the planning system, so that local planning authorities and local communities
retain control of where development should and should not go. It also reiterated strong
protections for the Green Belt and other environmental designations, and set out
proposals to make sure that we build high quality homes in which people want to live.
4. The housing White Paper also stated that further consultation on specific issues would
follow
2
, and this paper carries forward that commitment. It seeks views on changes to
national policy to help local planning authorities and communities plan for and deliver
the homes they need, including:
a) our proposed approach to a standard method for calculating local housing need,
including transitional arrangements (paragraphs 1.13, 1.14, A.21 and A.23 of the
White Paper);
1
DCLG, February 2017, https://www.gov.uk/government/publications/fixing-our-broken-housing-market
2
Other proposals in the housing White Paper that have implications for the National Planning Policy
Framework will be reflected in the forthcoming revision of the Framework referred to in paragraph 6.
7
b) improving how authorities work together in planning to meet housing and other
requirements across boundaries, through the preparation of a statement of common
ground (paragraphs 1.9 and A.13);
c) how the new approach to calculating housing need can help authorities plan for the
needs of particular groups and support neighbourhood planning (paragraphs A.24
and A.65);
d) proposals for improving the use of section 106 agreements, by making the use of
viability assessments simpler, quicker and more transparent (paragraph 2.30); and
e) seeking further views on how we can build out homes more quickly.
5. This consultation also seeks views on the proposal in the housing White Paper that
local planning authorities delivering the homes their communities need might be
eligible for a further 20 per cent increase in fees for planning applications, over and
above the 20 per cent increase already confirmed
3
. If taken forward, this would be
delivered through changes to regulations.
6. Subject to the outcome of this consultation, and the responses received to the housing
White Paper, the Government intends to publish a draft revised National Planning
Policy Framework early in 2018. We intend to allow a short period of time for further
consultation on the text of the Framework to make sure the wording is clear, consistent
and well-understood. Our ambition is to publish a revised, updated Framework in
Spring 2018.
7. In taking forward the proposed changes to the Framework, some amendments will also
be required to planning guidance. We will use the responses to both consultations to
help shape changes to the guidance, which we intend to update alongside the revised
Framework.
3
Paragraph 2.15, DCLG, February 2017
8
Proposed approach to calculating the local
housing need
Introduction
8. Statutory plans allow local planning authorities, elected Mayors
4
and communities to
plan where new homes will be built, plan for the infrastructure needed, and to have
more control over the look and feel of new development. They also identify ways of
improving the local environment and achieving net gains for the environment.
9. The National Planning Policy Framework is clear that, to enable effective planning of
new homes, local planning authorities should start the plan-making process with a clear
understanding of the number of new homes that they need in their area. While this is
an essential first step, it is not the only stage in the process. Local planning authorities
then need to determine whether there are any environmental designations or other
physical or policy constraints which prevent them from meeting this housing need.
These include, but are not limited to, Ancient Woodland, the Green Belt, Areas of
Outstanding Natural Beauty and Sites of Special Scientific Interest. They also need to
engage with other authorities through the duty to co-operate to determine how any
need that cannot be accommodated will be redistributed over a wider area. This means
that the level of housing set out in a plan may be lower or higher than the local housing
need.
10. The housing White Paper argued that both these processes could be improved,
through the introduction of a standard method for assessing housing need and a
statement of common ground to improve joint working.
Background
11. The housing White Paper, drawing on the work of the Local Plans Expert Group
5
,
argued that the existing approach to assessing housing need is too complex. At
present, the National Planning Policy Framework and planning guidance ask each
local planning authority to define a Housing Market Area, and to identify the
‘objectively assessed need’ for market and affordable housing within this. Planning
guidance sets out a recommended method for doing so, using the latest National
4
References to elected Mayors refer to Mayors of combined authorities (and the Mayor of London) who have
plan-making powers.
5
Local Plans Expert Group (2016) Local Plans: report to the Communities Secretary and to the Minister of
Housing and Planning https://www.gov.uk/government/publications/local-plans-expert-group-report-to-the-
secretary-of-state
9
Statistics for projected household formation as a starting point. This is then adjusted to
take account of a range of issues, including employment growth and market signals.
The current process leaves substantial room for interpretation.
12. The lack of a simple, standard approach to assessing local housing need has led to a
costly and time-consuming process which lacks transparency:
many local planning authorities spend significant sums of taxpayers’ money
employing consultants to come up with a housing need figure, often using different
and inconsistent methods. It can cost local planning authorities around £50,000 to
prepare a strategic housing market assessment, which could equate to an overall
cost to the sector of over £3 million per year;
local planning authorities, developers and local communities often engage in
disputes on the method used, which delays the process (by around six months) and
adds cost; and
few methods take significant account of the affordability of housing in their area.
13. The Government argued in the housing White Paper that a standard approach to
assessing local housing need would be simpler, quicker, and more transparent. This
would speed up the time taken to prepare Local Plans and give local communities
greater control of development in their area. We consider that a standard method
should be based on three key principles:
a) Simple there should be an easy and transparent process for local people and
other interests to understand;
b) Based on publicly available data which might include national data such as that
from the Office for National Statistics, or robust local data;
c) Realistic to reflect the actual need for homes in each area, taking into account the
affordability of homes locally. High house prices indicate a relative imbalance
between the supply and demand for new homes, and makes housing less
affordable. The affordability of new homes is the best evidence that supply is not
keeping up with demand.
14. In addition, we consider that any approach must allow an understanding of the
minimum number of homes that are needed across England as a whole, while also
reflecting the effect of our Industrial Strategy
6
as we seek to promote prosperity in
every part of the country.
6
https://www.gov.uk/government/policies/industrial-strategy,
10
The Government’s proposed approach
15. Our proposed approach to a standard method consists of three components. The
starting point should continue to be a demographic baseline, which is then modified
to account for market signals (the price of homes). However, we recognise that it is
important to ensure that the proposed housing need is as deliverable as possible, so
are proposing a cap to limit any increase an authority may face when they review
their plan. Further details are set out in paragraphs 16-25 below.
Step 1 Setting the baseline
16. We consider that the starting point should continue to be projections of future
household growth in each area, but calculated initially for the area of the local authority.
This will ensure that the process begins with a clear assessment of housing growth for
every area. The Office for National Statistics’ projections for numbers of households in
each local authority
7
are the most robust estimates of future growth.
17. We therefore propose that projections of household growth should be the
demographic baseline for every local authority area
8
. The most recent official
projections should be used, with the household growth calculated for the period over
which the plan is being made. We propose that the demographic baseline should
be the annual average household growth over a 10 year period. Given the
Government’s expectation that plans are reviewed every five years, using average
household growth over this period will ensure effective planning over the preparation
and duration of the plan. Household projections should therefore be regarded as the
minimum local housing need figure.
Step 2 An adjustment to take account of market signals
18. We consider that household growth on its own is insufficient as an indicator of demand
since:
household formation is constrained to the supply of available properties new
households cannot form if there is nowhere for them to live; and
people may want to live in an area in which they do not reside currently, for example
to be near to work, but be unable to find appropriate accommodation that they can
afford.
7
DCLG, https://www.gov.uk/government/statistical-data-sets/live-tables-on-household-projections.
8
In some areas the projected household growth will be negative. In these places, the demographic baseline
should be taken to be zero.
11
19. There is a longstanding principle in planning policy that assessing an appropriate level
of housing must address the affordability of new homes, which means in practice that
projected household growth should be adjusted to take account of market signals. One
approach would be to increase household projections where house prices are high.
But that would not take account of the fact that incomes may be higher in that area,
and so homes may be no less affordable.
20. Therefore, we consider that median affordability ratios, published by the Office for
National Statistics at a local authority level, provide the best basis for adjusting
household projections. The affordability ratios compare the median house prices
(based on all houses sold on the open market in a given year in a local authority) to
median earnings (based on full-time earnings for those working in that local authority
area). We propose that as the next step in the standard method, plan makers
should use the workplace-based median house price to median earnings ratio
from the most recent year for which data is available.
9
21. As the housing White Paper noted
10
, external commentators suggest that England
needs net additions in the region of 225,000 to 275,000 per year. To get a total housing
need close to this figure, our modelling proposes that each 1 per cent increase in the
ratio of house prices to earnings above four results in a quarter of a per cent
increase in need above projected household growth. This achieves the overall level
of delivery that most external commentators believe we need, while ensuring it is
delivered in the places where affordability is worst. The precise formula is as follows:
Adjustment factor =
Local affordability ratio 4
X 0.25
4
22. The overall housing need figure is therefore as follows:
Local Housing Need = (1+adjustment factor) x projected household growth
23. So, for example, an area with a projected household growth of 100 a year would have
an annual need of:
100 if average house prices were four times local average earnings
125 if average houses prices were eight times local average earnings
150 if average house prices were twelve times local average earnings.
9
https://www.ons.gov.uk/peoplepopulationandcommunity/housing/datasets/ratioofhousepricetoworkplacebase
dearningslowerquartileandmedian
10
Page 9, DCLG, February 2017
12
24. There are a number of possible ways of making an adjustment to take account of
market signals. However, our approach is based on the following key principles:
a) the threshold level of four, above which we seek an upward adjustment in housing
need, is appropriate since the maximum amount that can typically be borrowed for a
mortgage is four times a person’s earnings
11
. Put another way, if the average worker
cannot get a mortgage for the average home in the area without additional help (e.g.
from the ‘bank of mum and dad’), then there are not enough homes in the area and
the local authority needs to plan for more; and
b) increases in housing delivery above population growth should be inversely
proportionate to the affordability of an area, with less affordable areas needing to
deliver more homes. There is considerable economic evidence that demonstrates
that growth in house prices (and therefore worsening affordability) is inversely related
to the level of house building
12
.
Step 3 Capping the level of any increase
25. Applying our proposed approach to market adjustment will lead to a significant increase
in the potential housing need in some parts of the country. To help ensure the method
is deliverable, we propose to place a cap on the increase that applies to particular
authorities. We propose to cap the level of any increase according to the current
status of the local plan in each authority as follows:
a) for those authorities that have adopted their local plan in the last five years, we
propose that their new annual local housing need figure should be capped at 40 per
cent above the annual requirement figure currently set out in their local plan; or
b) for those authorities that do not have an up-to-date local plan (i.e. adopted over five
years ago), we propose that the new annual local housing need figure should be
capped at 40 per cent above whichever is higher of the projected household growth
for their area over the plan period (using Office for National Statistics’ household
projections), or the annual housing requirement figure currently set out in their local
plan.
11
The Council Mortgage Lenders found that in 2015 the average first time buyer loan to income ratio in
England was 3.61.
12
The economic theory behind this is evidenced in the Barker Review (DCLG, 2004) and Affordability Still
Matters (NHPAU, 2008).
13
Impact on each Local Authority Area
26. This method would, if applied universally to each local planning authority immediately
using current data, lead to a total housing need across the country of just over 266,000
homes, including 72,000 in London.
27. This new method for assessing local housing need will affect individual authorities
differently. Alongside this consultation document, we are publishing the housing need
for each local planning authority using our method, on the basis of current data
(average household growth for 2016 to 2026 and house price to earnings ratios for
2016). It also sets out, indicatively, the extent to which land in each local authority area
is covered by Green Belt, National Parks, Areas of Outstanding Natural Beauty and
Sites of Special Scientific Interest. This is for illustrative purposes only - the data
informing this new method is based on the most up-to-date information available at the
time of publishing this consultation document, and will change between now and when
local authorities produce plans.
28. For some local planning authorities, a reduction in their local housing need compared
to the existing approach can be attributed to our method not making a specific
adjustment to take account of anticipated employment growth. However, as we explain
in paragraph 46 below, local planning authorities are able to plan for a higher number
than set out by our proposed method. This means that, where there is a policy in place
to substantially increase economic growth, local planning authorities may wish to plan
for a higher level of growth than our formula proposes.
29. We have also published for the first time data on how many homes every local
authority in the country is planning for, and, where available, how many homes they
believe they need. At the moment, it is not always clear to local communities or
developers how many homes their local area is planning for, let alone needs. These
figures are often buried deep in technical reports and hidden away on local authority
websites. It can take several hours to track down exactly how many homes a local
planning authority has decided it needs and even then it might not be clear. It should
not be this difficult, and by collating this information together in a single place, we will
make planning more transparent and simpler for people to understand. We would
welcome practical suggestions for ensuring this information can be made yet
more transparent.
Joint working
30. We recognise that many individual local authorities are already working together when
identifying their housing need, and encourage more authorities to do so. We would
expect that plans that are being produced jointly, or strategic plans prepared by the
Mayor of London and other elected Mayors (for combined authorities where they have
14
the function of preparing a spatial development strategy for the area), will use the
proposed approach to produce a single assessment of the housing need for the area
as a whole.
31. In such cases we propose that the housing need for the defined area should be
the sum of the local housing need for each local planning authority. It will be for
the relevant planning authorities or elected Mayor to distribute this total housing need
figure across the plan area. The Housing Infrastructure Fund is designed to allow for
joint bids and can support land constrained high demand areas to work collaboratively
with neighbouring authorities with fewer constraints that want to accommodate greater
housing numbers.
32. We considered the approach of applying the average affordability ratio for each
constituent local authority’s projected household growth, prior to applying a cap to the
figure for each authority based on its plan status as proposed above. However, we
discounted this approach since there was no consistently available data on average
affordability ratios at the level of all combined authorities.
London
33. London’s local housing market presents unique and wide-ranging affordability
challenges. The Mayor of London has overall responsibility for housing in London. This
includes preparing the Greater London Spatial Development Strategy, which sets a
London-wide housing target that is broken down to a minimum housing target for
individual Boroughs. The approach to setting local housing needs in London is
consistent with the method proposed for the rest of England.
Subsequent changes to local housing need
34. For the second and subsequent plan reviews we propose that the cap for authorities
should remain at 40 per cent above the number of homes they are planning for in the
extant local plan at the time of review.
Question 1:
a) do you agree with the proposed standard approach to assessing local housing
need? If not, what alternative approach or other factors should be considered?
b) how can information on local housing need be made more transparent?
15
Implementing the new approach
35. The National Planning Policy Framework sets out that plans should be reviewed
regularly
13
and we intend to make it clear in the Framework that they should be
reviewed every five years. We expect local planning authorities to identify their local
housing need at the outset of the plan preparation stage, which they can then use as
part of initial evidence gathering and continued work on the evidence base.
36. Local planning authorities, when calculating their local housing need, should always
use the most up-to-date data available. The housing need figures we have published
are based on the 2014 based household projections (published July 2016), and 2016
house price to earnings ratios (published March 2017). The household projections are
updated every two years in the summer, and the house price to earnings ratios are
published annually in March.
37. This means that the local housing need figure will not remain static throughout the plan
preparation process. Under the previous approach we recognise that this led to
instances when local planning authorities had to revisit their evidence and, if
necessary, carry out further consultation. This only served to delay plan progress and
increase costs. We want to streamline the plan-making process and make it easier for
plans to be adopted more quickly.
38. To ensure stability and a consistent evidence base to inform plan-making, we propose
that local planning authorities should be able to rely on the evidence used to
justify their local housing need for a period of two years from the date on which
they submit their plan. During this period this will mean that the local housing need
assessment is not rendered out of date if changes to the household projections or
affordability ratios are published while the plan is being examined. Of course, the final
housing figure in the local plan or spatial development strategy may differ from the local
housing need figure after taking account of issues raised during the examination,
constraints and the duty to co-operate.
13
National Planning Policy Framework, DCLG, March 2012 - See in particular paragraphs 17 and 157, and
the Local Plans section of the planning guidance
Question 2: do you agree with the proposal that an assessment of local
housing need should be able to be relied upon for a period of two years from
the date a plan is submitted?
16
Benefits of the new approach
39. The use of different and inconsistent methods has meant that the current
arrangements for calculating local housing need are costly and time-consuming. It can
cost local planning authorities around £50,000 to prepare a strategic housing market
assessment, so this could equate to an overall cost to the sector of over £3 million
each year. Furthermore, disputes about the methods used can lead to delays of around
six months in the preparation of local plans and add considerable additional cost to
local authorities, and prolong the level of uncertainty for local communities.
40. Adopting our proposed approach will offer significant benefits. It will reduce the time it
takes to put plans in place, give communities greater control of where much-needed
homes should be built, and also save local taxpayers money. Furthermore, it provides
a level of certainty and transparency for the public and plan makers and will aid joint
working and collaboration by removing disputes where different methods have been
used previously. Collectively, across the country it will take years off the plan-making
process and generate considerable efficiency savings.
41. To deliver the homes that we need, we propose to amend national planning policy
so that having a robust method for assessing local housing need becomes part
of the tests that plans are assessed against; and to make clear (through guidance)
that use of the proposed standard method will be sufficient to satisfy this test.
42. Local plans are already required to be ‘positively prepared’ if they are to be found
‘sound’ (paragraph 182 of the National Planning Policy Framework). We propose to
amend this, so that a sound plan should identify development needs using a clear and
justified method, as well as meeting objectively assessed development needs insofar
as it is reasonable to do so. Together with the proposed change to planning guidance,
this would mean that Planning Inspectors would be able sign off more easily, and with
considerably less scrutiny, the local housing need aspect of the plan. This will provide
more certainty about an emerging plan’s soundness, as well as helping to speed up the
plan examination.
43. As set out in paragraph 1.18 of the housing White Paper, HM Land Registry intends to
register the ownership of all publicly held land in the areas of greatest housing need by
2020, with the rest to follow by 2025. This information can be taken into account
alongside other considerations, including land constraints, to assist plan makers in
finding sites suitable for housing development. The new approach to assessing local
housing need, as set out in this consultation document, and the percentage of land
Question 3: do you agree that we should amend national planning policy so that a
sound plan should identify local housing need using a clear and justified method?
17
which is unregistered within the boundaries of a local authority will form the basis of
definition of ‘areas of greatest housing need’ for this purpose. We are publishing the list
of areas of greatest housing need alongside this consultation document.
Deviation from the new method
44. Given the significant financial and time-saving benefits, our expectation is that local
planning authorities adopt the proposed method when assessing housing need. We
consider that the same should apply to elected Mayors with plan-making powers.
However, there may be compelling circumstances not to adopt the proposed approach.
These will need to be properly justified, and will be subject to examination.
45. Where local planning authorities do not align with local authority boundaries, such as
National Parks, the Broads Authority and Urban Development Corporations, available
data does not allow local housing needs to be calculated using the standard method
set out above. In these cases we propose that authorities should continue to
identify a housing need figure locally, but in doing so have regard to the best
available information on anticipated changes in households as well as local
income levels.
46. Plan makers may put forward proposals that lead to a local housing need above that
given by our proposed approach. This could be as a result of a strategic infrastructure
project, or through increased employment (and hence housing) ambition as a result of
a Local Economic Partnership investment strategy, a bespoke housing deal with
Government or through delivering the modern Industrial Strategy. We want to make
sure that we give proper support to those ambitious authorities who want to deliver
more homes. To facilitate this we propose to amend planning guidance so that
where a plan is based on an assessment of local housing need in excess of that
which the standard method would provide, Planning Inspectors are advised to
work on the assumption that the approach adopted is sound unless there are
compelling reasons to indicate otherwise. We will also look to use the Housing
Infrastructure Fund to support local planning authorities to step up their plans for
growth, releasing more land for housing and getting homes built at pace and scale
47. There should be very limited grounds for adopting an alternative method which results
in a lower need than our proposed approach. The reasons for doing so will be tested
rigorously by the Planning Inspector through examination of the plan. We would expect:
the Inspector to take the number from our preferred method as a reference point in
considering the alternative method; and the plan-making body to make sure that the
evidence base is robust and based on realistic assumptions, and that they have clearly
set out how they have demonstrated joint working.
Question 4: do you agree with our approach in circumstances when plan makers
deviate from the proposed method, including the level of scrutiny we expect from
Planning Inspectors?
18
Implications of a standardised approach for calculating the
five year supply of housing and the Housing Delivery Test
48. The housing White Paper states that, as an incentive to get up-to-date plans in place,
in the absence of an up-to-date local or strategic plan we propose that after 31 March
2018 the new method for calculating the local housing need would apply as a baseline
for assessing five year housing land supply. This would mean that local planning
authorities without an up-to-date local plan or spatial development strategy would not
be able to factor land constraints into the baseline for establishing their five year land
supply. However, when determining individual planning applications, the decision-
maker will still need to take account of all policies in the National Planning Policy
Framework, including those which restrict development (such as Green Belt and
Ancient Woodland). Should the revised Framework be published after this date, subject
to the outcome of the consultation we propose to introduce this requirement with
immediate effect.
49. The Government also recognises that in specific circumstances, where local planning
authorities are collaborating on ambitious proposals for new homes, these plans may
take longer to bring forward. We propose that the Secretary of State would retain
some discretion to be able to give additional time before this baseline applies
where there is significant progress made on bringing forward a joint plan for housing in
the area.
50. Where authorities have adopted joint plans (or in cases where there is an existing
Mayoral plan), we are interested in views on whether national policy should be
changed to allow the authorities involved to calculate their five year housing land
supply for the area as a whole, based on the overall trajectory for home building in the
plan. This approach would need to be agreed across all the authorities and set out in
the joint or Mayoral plan. We are also interested in views on whether this approach
could be extended to the operation of the Housing Delivery Test as proposed in
the housing White Paper.
51. Where local planning authorities do not align with local authority boundaries, such as
National Parks, the Broads Authority and Urban Development Corporations, and are
not able to use the new method for calculating local housing need, we propose to use a
locally identified housing need figure. We are interested in views on whether this
should be the need set out in the most recent local plan, or spatial development
strategy or the figure set out in an emerging plan.
19
Transitional arrangements for the proposed approach
52. We are also proposing transitional arrangements to set a period of time before which
plans would be expected to use the standard method for calculating the local housing
need. This recognises that a number of plan makers have already made significant
steps in preparing their plan, and we want to encourage them to complete their plan,
avoiding further delays and so undermining the delivery of new homes.
53. The proposed transitional arrangements for each local authority will depend on the
status of their current and emerging plan as well as the extent of the impact of the
proposed approach on existing housing need calculations.
14
We propose the following
transitional arrangements as set out in Table 1 below.
14
The local plans referred to are development plan documents prepared in line with the 2004 Act which set
the strategic planning policies for a local planning authority’s area (namely a ‘Local Plan’ or ‘Core Strategy’).
Question 5:
a) do you agree that the Secretary of State should have discretion to defer the
period for using the baseline for some local planning authorities? If so, how best
could this be achieved, what minimum requirements should be in place before
the Secretary of State may exercise this discretion, and for how long should such
deferral be permitted?
b) do you consider that authorities that have an adopted joint local plan, or which
are covered by an adopted spatial development strategy, should be able to
assess their five year land supply and/or be measured for the purposes of the
Housing Delivery Test, across the area as a whole?
c) do you consider that authorities that are not able to use the new method for
calculating local housing need should be able to use an existing or an emerging
local plan figure for housing need for the purposes of calculating five year land
supply and to be measured for the purposes of the Housing Delivery Test?
20
Table 1: Proposed transitional arrangements
Plan stage
Proposed transitional arrangement
No plan, or plan adopted
more than five years ago
and has not yet reached
publication stage
The new standardised method should be used, unless
the plan will be submitted for examination on or before
31 March 2018, or before the revised Framework is
published (whichever is later).
Plan has been
published, but not yet
submitted
If the plan will be submitted for examination on or before
31 March 2018 or before the revised Framework is
published (whichever is later), continue with the current
plan preparation otherwise, use the new standardised
method.
Plan is at examination
stage
Progress with the examination using the current
approach.
Plan adopted in the last
five years
Use the new standardised method when next reviewing
or updating the plan.
54. Where plans are more than five years old, if new plans have not been submitted to the
Secretary of State on or before 31 March 2018, or before the revised Framework is
published (whichever is later), there will be no transitional arrangements. In other
words the new standardised method applies immediately. Where local plans were
adopted or approved more than five years ago, we expect the majority of local planning
authorities in this position to start the process of reviewing the document immediately if
they have not done so already. However, we do recognise the scale of the challenge in
London or combined authority areas, so we may explore a slightly longer transition
period for the Mayors before we expect them to adopt the new approach in their areas
as they prepare their spatial development strategy.
55. If a local plan is currently at examination or will be submitted for examination on or
before 31 March 2018 or before the revised Framework is published (whichever is
later), it should continue to be examined and rely on evidence prepared using the
current method. If a plan is withdrawn from examination or found unsound, the local
planning authority should prepare a new plan based on the new standardised method.
Question 6: do you agree with the proposed transitional arrangements for
introducing the standard approach for calculating local housing need?
21
Statement of common ground
Introduction
56. Local planning authorities need to plan together to ensure that infrastructure and public
services are planned to meet the needs of the wider area; to ensure that the combined
impact on the environment is sustainable; to ensure that housing requirement that
simply cannot be met in a particular area is met elsewhere; and where appropriate, to
ensure that new settlements and garden villages are planned for properly.
57. However, this is not working effectively. Evidence from recent local plan examinations
suggests that failing the duty to co-operate is one of the most regular reasons why
plans are not found sound by the Planning Inspectorate. Accordingly, paragraphs 1.9
and A.13 of the housing White Paper sets out a plan for more effective joint working
where planning issues go beyond individual authorities through a statement of common
ground, setting out how they intend to work together to meet housing needs that cut
across authority boundaries.
58. This section sets out our proposals for how local planning authorities should produce
and maintain their statement of common ground. It also sets out expectations for when
statements should be in place, and proposals for steps which may be taken by
Government where effective co-operation is not taking place.
Background
59. The duty to co-operate, introduced through the Localism Act 2011, was designed to
reflect the reality that strategic cross-boundary planning matters can only be effectively
tackled when local planning authorities work together. The duty requires local planning
authorities
15
and certain public bodies
16
to engage constructively, actively and on an
ongoing basis to maximise the effectiveness of plan preparation in the context of
strategic cross-boundary matters. Such matters include planning for housing need
across a housing market area or developing integrated infrastructure. The duty to co-
operate does not apply to Mayors with plan-making powers.
60. Compliance with the duty is tested at the examination of the development plan
documents, where the Planning Inspector assesses whether the local planning
authority has complied with its duty to co-operate with other local authorities during the
preparation of the plan. If the plan does not meet the statutory requirements tested at
examination, the Planning Inspector must recommend non adoption. This normally
15
Including county councils in England (where such councils are not local planning authorities)
16
Listed in Regulation 4 of the Town and Country Planning (Local Planning) (England) Regulations 2012
22
results in local planning authorities withdrawing their plan and returning to the early
stages of plan-making.
61. There are a number of areas across England where local planning authorities are co-
operating effectively to plan for the strategic needs of the wider area, including planning
for the homes that are needed. In other areas, however, the current framework for co-
operation is proving to be less effective.
62. We have identified three problems:
the lack of transparency or sufficient certainty in the early stages of the plan-making
process about how effectively local planning authorities are working together to
reach agreement on strategic cross-boundary matters;
co-operation is only tested towards the end of the plan-making process at
examination, at which point it is too late to remedy any failures, and plans typically
have to be withdrawn leading to significant delays in plans being put in place. This
can result in an area with no plan in place for longer, leaving it vulnerable to
speculative development and failing to provide certainty to neighbouring authorities
over the level of need that will be met by the authority; and
local planning authorities are not legally required to reach agreement on issues.
This allows them to avoid taking difficult decisions, which can leave housing need
unmet, or can push unfair and unrealistic burdens for delivering housing need on
neighbouring authorities.
Statement of common ground policy
63. To support more effective joint working where planning issues need to be addressed by
more than one local planning authority, we intend to set out in the National Planning
Policy Framework that all local planning authorities should produce a statement
of common ground. The objectives of the policy are to:
a) increase certainty and transparency, earlier on in the plan-making process, on
where effective co-operation is and is not happening;
b) encourage all local planning authorities, regardless of their stage in plan-making, to
co-operate effectively and seek agreement on strategic cross-boundary issues,
including planning for the wider area’s housing need; and
c) help local planning authorities demonstrate evidence of co-operation by setting
clearer and more consistent expectations as to how co-operation in plan-making
should be approached and documented.
64. To meet these objectives, we are proposing that every local planning authority produce
a statement of common ground over the housing market area or other agreed
geographical area where justified and appropriate. It is proposed that the statement will
23
set out the cross-boundary matters, including the housing need for the area,
distribution and proposals for meeting any shortfalls. In setting out the strategic cross-
boundary issues, the statement will record where agreement has, and has not been
reached.
65. The statement of common ground is not intended to replicate any stage of the plan-
making process, nor should it be an additional burden on local planning authorities.
Critically, we do not want this proposal to disrupt existing joint working arrangements
where these are effective.
66. The statement should be both a road-map and a record for cross-boundary co-
operation on strategic planning matters. When completed effectively, the statement will
be an important, clear and concise record of how local authorities work together to
resolve common strategic issues. Consequently, this should enable the examination to
progress more quickly, serving as evidence as to how a local planning authority has
met the duty to co-operate. It will also provide an opportunity for local planning
authorities to set out where they have not been able to agree and what is needed to
resolve this.
Determining the key issues and geographical area
67. The first step in developing the statement of common ground should be for local
planning authorities to identify their key cross-boundary strategic planning issues,
including housing and infrastructure matters. This will aid authorities in determining and
justifying the geographical area over which to produce the statement of common
ground.
68. The National Planning Policy Framework already makes clear that local planning
authorities should work with their neighbouring authorities to produce a strategic
housing market assessment where housing market areas cross administrative
boundaries. Although the proposed approach to assessing local housing need shifts
the focus away from housing market areas, in most instances such areas are the most
appropriate geographies over which to produce a statement of common ground.
69. We also appreciate that housing market areas sometimes overlap. Furthermore we are
conscious that there are areas where effective cross-boundary plan-making
arrangements are already in place or are emerging. Therefore we propose to set out
in the National Planning Policy Framework that local planning authorities should
use agreed housing market areas as the geographical area over which to
develop statements of common ground, unless they are able to jointly determine
and justify an alternative area over which to produce their statement of common
ground, or unless they wish to produce more than one statement of common
ground.
24
Determining the primary authorities and signatories
70. The local planning authorities in the agreed geographical area will be the primary
authorities responsible for developing and maintaining the document. However, it is
unlikely that all authorities within the geographical area will share an interest in all
strategic matters; and individual authorities may have interests which overlap with
neighbouring statement of common ground areas.
71. We do not want to allow authorities to be able to delay unnecessarily the progress of a
statement of common ground where they may only have an interest in one or two
issues, rather than the whole document. We therefore propose that local planning
authorities should only be signatories to those strategic issues covered in the
statement of common ground in which they have an interest and that authorities
can be signatories to more than one statement where appropriate.
72. We will also make it clear that county councils and the Marine Management
Organisation should be necessary signatories to those relevant strategic matters
in statements of common ground which relate to their areas of planning
responsibility (which include, in the case of a county council, transport infrastructure,
minerals and waste).
73. Statutory consultees will continue to play an essential part in the plan-making process
through the duty to co-operate. We expect early and meaningful engagement between
all parties which requires a proactive, ongoing and focussed approach to strategic
planning and partnership working.
74. In areas where there is an elected mayor with strategic plan-making powers, such as
London and Greater Manchester, we want to ensure that all local planning authorities
in the area are effectively collaborating in plan-making, but that efforts are not
duplicated. Spatial development strategies produced by Mayors consider a number of
strategic issues including housing need, but Mayors are not subject to the duty to co-
operate when producing their spatial development strategy. In order to ensure that the
aims of the statement of common ground can be achieved in every area, we wish to
seek views on the most effective way of introducing the statement of common
ground in areas with Mayors with strategic plan-making powers.
75. Furthermore, we would welcome views on the role of directly elected Mayors who
do not have strategic plan-making powers in the production of statements of
common ground. We would also welcome views on the role of county councils in
two- tier areas over and above their specific areas of planning responsibility.
25
Production of the statement of common ground
76. We propose that all local planning authorities should have a statement of
common ground in place within twelve months following the publication of the
revised National Planning Policy Framework. However, in order to ensure greater
certainty at an early stage of the process, we expect local planning authorities to
have an outline statement in place within six months following publication of the
revised Framework.
77. This will apply to all local planning authorities regardless of where they are in the plan-
making cycle. Authorities who have recently adopted or submitted a plan will benefit
from utilising recent, relevant evidence produced for their plan, in the process of
determining the key issues and geographical area for their statement of common
ground.
78. Table 2 below sets out our proposed expectations of what should be in place after six
and twelve months. We do not intend these documents to be a burden on authorities
and would expect the content listed below to be set out clearly and concisely. They will
not be separately examined by the Planning Inspectorate, but will form part of the
evidence for an individual Local Plan examination.
79. We want to ensure that the process is transparent for local authorities and their
communities to understand. We propose to set out that all statements of common
ground should be published in a machine readable format on each of the primary
local planning authorities websites.
Keeping the statement of common ground up-to-date
80. The statement of common ground should be regularly updated throughout the plan-
making process to reflect emerging agreements between participating authorities, and
to reflect individual planning authority’s progress on plan-making. Statements will also
need to be reviewed to ensure they remain relevant, both in terms of the issues being
addressed but also in terms of participating authorities.
Question 7:
a) do you agree with the proposed administrative arrangements for preparing the
statement of common ground?
b) how do you consider a statement of common ground should be implemented in
areas where there is a Mayor with strategic plan-making powers?
c) do you consider there to be a role for directly elected Mayors without strategic
plan-making powers, in the production of a statement of common ground?
26
81. We propose to set an expectation that as a minimum the statement should be
reviewed, and if necessary updated, when primary authorities each reach certain
key milestones in the plan-making process. We propose that these milestones
should be the key regulatory milestones in the consultation, publication, submission
and adoption of a plan
17
.
Table 2: The contents of a statement of common ground
17
Including consultation at regulation 18; publication at regulation 19; submission at regulation 22; and
adoption at regulation 26 of the Town and Country Planning (Local Planning) (England) Regulations 2012
Six months after publication of the policy in a revised National Planning
Policy Framework
- The geographical area covered by the statement, and justification for the area
- Key strategic cross-boundary matters being addressed by the statement,
including housing need for the area, and housing targets in any adopted plans
(where known), and proposals for meeting any shortfalls
- Primary authorities responsible for the statement, and list of additional
signatories (including matters to which each is signatory)
- Governance arrangements for the co-operation process, including how the
statement of common ground will be maintained and kept up to date
After twelve months, the statement of common ground should also include
(in addition to the above):
- Process for agreeing the distribution of housing need (including unmet need)
across the wider area, and agreed distributions (as agreed through the plan-
making process)
- A record of whether agreements have (or have not) been reached on key
strategic matters
- Any additional strategic cross-boundary matters to be addressed by the
statement which are not already addressed
Question 8: do you agree that the proposed content and timescales for
publication of the statement of common ground are appropriate and will support
more effective co-operation on strategic cross-boundary planning matters?
27
Ensuring that effective co-operation is happening
82. Co-operation will continue to be tested by virtue of the statutory duty to co-operate,
when a plan is submitted for examination. The statement of common ground should
provide the primary evidence of compliance with the duty to co-operate. However, one
of the key benefits of the statement of common ground is that it will increase certainty
and transparency much earlier on in the plan-making process, to highlight where
effective collaboration is or is not happening before a plan is submitted for examination.
83. Alongside the duty to co-operate, the Planning Inspector also assesses whether the
plan is ‘sound’ at examination. These ‘tests of soundness’ are set out in national policy
and state that plans should be submitted which are positively prepared, justified,
effective and consistent with national policy. In order to encourage local planning
authorities to plan for the wider housing need, including unmet need and ensure the
statement of common ground is produced, we are therefore proposing that the tests
of soundness are amended to include that:
a) plans should be prepared based on a strategy informed by agreements over
the wider area; and
b) plans should be based on effective joint working on cross-boundary strategic
priorities, which are evidenced in the statement of common ground
84. We propose that the changes to the tests of soundness set out above, should take
effect in line with our expectations for when statements of common ground should be in
place. We therefore propose to apply transitional arrangements so that the new
tests of soundness are not applied until 12 months after the revision to the
National Planning Policy Framework.
85. However, the key benefit of the statement of common ground is that it will increase
certainty and transparency much earlier on in the plan-making process, to highlight
where effective collaboration is or is not happening before a plan is submitted for
examination.
86. In instances where statements of common ground are not being produced or
maintained, we propose in the first instance to engage with relevant authorities to
understand the issues at hand. However, where it is necessary, we will consider the
use of our range of intervention powers to take action; including, for example, directing
local planning authorities to amend their plan-making timetables to align the production
of plans in the wider area
18
. This will ensure that communities and neighbouring
authorities are not disadvantaged by authorities who are not effectively co-operating.
18
Section 15(4) Planning and Compulsory Purchase Act 2004
http://www.legislation.gov.uk/ukpga/2004/5/section/15
28
Statements of common ground and strategic investment in infrastructure
87. The statement of common ground provides a vehicle to set out where strategic cross-
boundary infrastructure is required to unlock more land for housing. Where there are
strategic cross-boundary infrastructures matters, local planning authorities will be
expected to set out how they intend to resolve them and show that they have
agreement with the relevant bodies. It is proposed therefore that the statement of
common ground, once in place, should be submitted as supplementary evidence of
effective co-operation between authorities when applying for strategic infrastructure
investment.
Question 9
a) do you agree with the proposal to amend the tests of soundness to include that:
i) plans should be prepared based on a strategy informed by agreements
over the wider area; and
ii) plans should be based on effective joint working on cross-boundary
strategic priorities, which are evidenced in the statement of common
ground?
b) do you agree to the proposed transitional arrangements for amending the tests
of soundness to ensure effective co-operation?
29
Planning for a mix of housing needs
88. It is important that local planning authorities do not just plan for the right number of
homes, but also the different size, type, tenure and range of housing that is required in
their area. The identification of such need is often carried out as part of the strategic
housing market assessment
19
. However, given our proposed new approach for
assessing local housing need, we will need to update existing planning guidance on
how to plan for different types of homes and will publish this alongside a revised
National Planning Policy Framework. For example, where prices for a particular type of
housing are rising at faster rates than others this might imply a shortage of supply of
that type of housing.
89. We would also like to make it easier for local planning authorities to identify the need
for other types and tenures in their area. These include, but are not limited to:
older and disabled people;
families with children;
affordable housing;
self-build and custom-build development;
student accommodation;
travellers who have ceased to travel; and
private rented sector and build to rent housing.
90. We are proposing that plan makers should disaggregate this total need into the overall
need of each type of housing as part of the plan-making process, before taking into
account any constraints or other issues which may prevent them from meeting their
overall housing need. This means that, as the plan develops, we expect plan makers to
make evidence-based planning judgements on the different types of housing that is
required within each area to ensure that the plan is effective and positively prepared.
91. We will update our planning guidance but do not envisage that it should cover every
conceivable group as the evidence gathering stage could be very time consuming and
disproportionate to the overall objective. The Government will engage with a range of
stakeholders in updating existing planning guidance, but we would welcome
suggestions on how to streamline the process for identifying the housing need
for individual groups and what evidence could be used to help them do so.
19
Paragraph 159 of the National Planning Policy Framework, DCLG, March 2012
30
Planning for older people
92. Section 8 of the Neighbourhood Planning Act 2017 requires the Secretary of State to
provide guidance for local planning authorities as to how they should address the
housing needs that result from old age or disability. Helping local planning authorities
provide a simple yet robust evidence base for such groups will form part of the
guidance, and will allow them to maintain the benefits of a more streamlined approach
to calculating the overall housing need.
93. When developing new planning guidance for older people, it is important that we have
a shared understanding of who is included in this group. The definition of older people
in Annex 2 of the National Planning Policy Framework reflects a range of people at
different ages with different needs from retirement age to the very frail elderly. We are
also aware of different types of housing that accommodate such a group ranging
from general market and affordable housing to specialised, purpose-built market and
rental accommodation and care homes. Given the importance of planning for the need
for older people as our population ages, we are reviewing whether we need to amend
the definition of older people for planning purposes. We consider that the current
definition is still fit-for-purpose but would welcome views.
Question 10:
a) do you have suggestions on how to streamline the process for identifying the
housing need for individual groups and what evidence could be used to help plan to
meet the needs of particular groups?
b) do you agree that the current definition of older people within the National
Planning Policy Framework is still fit-for-purpose?
31
Neighbourhood planning
94. Neighbourhood planning was introduced under the Localism Act 2011 to provide a
powerful set of tools for local people to guide the future development, regeneration and
conservation of their area. To date over 400 neighbourhood plans are in force. Many,
but not all, include plans for addressing local housing need. Through Section 1 of the
Neighbourhood Planning Act 2017, we have ensured that neighbourhood plans at an
earlier stage of development can be taken into account when determining planning
applications. Local communities will continue to be able to choose what issues they
wish to use the power of neighbourhood planning to address in their local area. When
planning for their future housing need, communities should have certainty on what level
of housing they should look to plan for at the outset to allow them to progress with
confidence with their neighbourhood plan.
95. Neighbourhood planning groups wishing to plan for the housing needs for their area
face a number of problems:
where there is an up-to-date local plan, some neighbourhood planning groups
may not have been provided with a housing figure in the local plan as a starting
point for developing their neighbourhood plan;
where there is no up-to-date local plan, neighbourhood planning groups may need
to employ external consultants to estimate housing need for designated
neighbourhood plan areas. This can be costly for voluntary neighbourhood
forums, and can discourage some communities from neighbourhood planning;
and
the housing need figure for the neighbourhood planning area can change during
their plan’s preparation, for example as the local planning authority prepares and
adopts its own plan. This is out of the control of neighbourhood planning groups,
and frustrates local communities.
96. The housing White Paper proposed to amend national policy so that local planning
authorities are expected to provide neighbourhood planning groups with a housing
need figure, where this is needed to allow progress to be made with neighbourhood
planning. We propose to make clear in planning guidance that authorities may do
this by making a reasoned judgement based on the settlement strategy and
housing allocations in their plan, so long as the local plan provides a sufficiently
up-to-date basis to do so (including situations where an emerging local plan is close
to adoption). Where this happens, we would not expect the resulting housing figure to
have to be tested during the neighbourhood plan’s production, as it will be derived from
the strategy in the local plan and must be in general conformity with its strategic
priorities.
32
97. To make this process easier in future, we would welcome views on whether
national policy should expect local planning authorities
20
to set out, within their
plans, a housing figure for designated neighbourhood planning areas and
parished areas within their local area.
98. We recognise that if a local planning authority provides a figure based on an out-of-
date local plan that any such figure risks being tested at the neighbourhood plan
examination and so replicating the current debates on housing figures that can occur at
local plan inquiries
99. Therefore, where the local plan is out-of-date and cannot be relied on as a basis for
allocating housing figures, we are proposing to set out in guidance a simple
formula-based approach which apportions the overall housing need figure for
the relevant local authority area/s, based on the latest figures calculated under
the new standard approach (once, and assuming, it is introduced), to the
neighbourhood planning area
21
. The proposed formula is simply to take the
population of the neighbourhood planning area and calculate what percentage it is of
the overall population in the local planning authority area. The housing need figure in
the neighbourhood planning area would then be that percentage of the local planning
authority’s housing need.
100. This approach would provide the starting point for neighbourhood planning groups
in determining their response to meeting their housing need. It would still allow
neighbourhood planning bodies to determine whether or not there are any constraints
which prevent them from meeting this need. For neighbourhood plans this approach
does not seek to address unmet demand from elsewhere or take account of any land
or other constraints, including with the relevant local planning authority area. This is
because of the limited geographical area that is covered by individual neighbourhood
plans and any such decision is more appropriate to co-ordinate and determine at a
strategic level.
20
And, where relevant, Mayors of combined authorities (and the Mayor of London) who have plan-making
powers
21
The housing need for the local authority area would be that produced using all stages of the method set
out in previous sections of this consultation.
Question 11:
a) should a local plan set out the housing need for designated neighbourhood
planning areas and parished areas within the area?
b) do you agree with the proposal for a formula-based approach to apportion
housing need to neighbourhood plan bodies in circumstances where the local
plan cannot be relied on as a basis for calculating housing need?
33
Proposed approach to viability assessment
Introduction
101. Section 106 of the Town and Country Planning Act 1990 (section 106) enables a
local planning authority to seek agreement from applicants to enter into planning
obligations to mitigate the impact of otherwise unacceptable development, to make it
acceptable in planning terms. Planning obligations can relate to a wide range of
infrastructure such as highways, public transport, education, community and cultural
facilities, green infrastructure, environmental mitigation and affordable housing.
102. The Community Infrastructure Levy (CIL) came into force in April 2010 and allows
local planning authorities in England and Wales to raise funds from owners or
developers of land undertaking new building projects in their area, to help fund
infrastructure to address the cumulative impact of development.
103. This consultation takes forward the commitment in the housing White Paper to
consider changes to section 106 practice in the short term to address issues in the
operation of agreements. This included a commitment to consult on standardised open
book section 106 agreements, to reduce disputes and delays, and how data on
planning obligations could be monitored and reported on to increase transparency.
104. The Government continues to consider wider options for reform, in the light of the
independent review of CIL
22
and its relationship with section 106 published alongside
the housing White Paper. We are also aware of some technical issues with the
implementation of CIL. The Government is keen to ensure that CIL legislation operates
as intended and will consider how to ensure certainty for developers and local
authorities, including clarifications through legislation if necessary.
Background
105. Stakeholders have told us that the use of viability assessments in planning
permission negotiations has expanded to a degree that it causes complexity and
uncertainty and results in fewer contributions for infrastructure and affordable housing
than required by local policies.
106. Viability assessments can be complex. In simple terms a site is viable if the value
generated by its development is more than the cost of developing it. However, the
range and complexity of variables in assessing this are such that the process is seen
as being susceptible to gaming; and is often viewed with suspicion by authorities,
communities and other observers. In particular, estimating future values and costs can
22
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/589637/CIL_REPORT_2016.pdf
34
be manipulated to reflect a range of outcomes. Furthermore, appraisals are often not
published on the grounds of commercial confidentiality. This means that the process is
neither easily understood nor transparent.
107. The Communities and Local Government Committee report into Capacity In The
Home Building Industry
23
, published in April this year,
identifies that: “One reason that
the negotiations over a site’s viability can take a long time is the lack of transparency: a
local authority has no way of assessing whether a developer’s claim that a site has
become unviable is true, or a negotiating tactic”. Their recommendations include
developers sharing viability assumptions and assessments with local authorities to
ensure that the provision of infrastructure, affordable housing and build density is not
compromised.
108. Against this background, this consultation proposes changes to improve certainty
and transparency in the assessment of viability for plan-making and decision-taking,
through amendments to policy and guidance.
Proposed approach to viability in plan-making
109. National planning policy is clear that local planning authorities should plan for the
homes and jobs needed in the area, and the provision of infrastructure and facilities. It
also expects that they should address the need for all types of housing, including
affordable homes, and that the plan should be deliverable (taking into account the
cumulative impact of local standards and needs). To ensure there is a robust basis for
assessing viability at the plan-making stage and to lessen the need for this to be
revisited when planning applications come forward we propose to amend national
planning policy to set out additional expectations for plans.
110. We propose that local planning authorities
24
should set out the types and
thresholds for affordable housing contributions required; the infrastructure
needed to deliver the plan; and expectations for how these will be funded and
the contributions developers will be expected to make. This would make clear how
the key strategic priorities that need to be planned for are to be delivered.
23
https://www.parliament.uk/business/committees/committees-a-z/commons-select/communities-and-local-
government-committee/inquiries/parliament-2015/capacity-in-the-homebuilding-industry-16-17/
24
And, where relevant, Mayors of combined authorities (and the Mayor of London) who have plan-making
powers
Question 12: do you agree that local plans should identify the infrastructure and
affordable housing needed, how these will be funded and the contributions
developers will be expected to make?
35
111. While the deliverability of these plans needs to be tested, we want to ensure that
this is done in a way which is both proportionate and effective. We are interested in
views on whether changes to planning guidance could be made to improve the
way that plans are tested for viability to ensure they are deliverable.
Proposed Approach to Viability in Decision Taking
112. Planning decisions must be taken in accordance with the development plan unless
material considerations indicate otherwise. Development plan policies should already
be tested for viability, and therefore developers and landowners should ensure that
they are considering the cost of any policy requirements when proposing schemes.
However, in practice an increase in planning obligations being contested on viability
grounds is affecting the ability of authorities to ensure that policy requirements, such as
the delivery of affordable housing, are being met in full.
113. We propose to make clear in the National Planning Policy Framework that
where policy requirements have been tested for their viability, the issue should
not usually need to be tested again at the planning application stage. Applications
that meet requirements set out in the plan should be assumed to be viable. It would
remain for the decision maker to decide what weight is to be given to the material
considerations in each case, including the impact on a scheme’s viability.
114. Housing associations and infrastructure providers can helpfully assist in the
assessment of costs and values. Housing associations in particular can assist with
valuations in terms of how much they would be able to pay for different types of
affordable housing on the site. Engaging these relevant parties early on in the plan-
making and decision-taking stages can result in more robust policies and assessments
and avoid the need for renegotiation of planning obligations. We propose to update
guidance to encourage engagement with housing associations and
infrastructure providers so that they can better inform the plan-making and
viability assessment process.
Question 13: in reviewing guidance on testing plans and policies for viability, what
amendments could be made to improve current practice?
Question 15: how can Government ensure that infrastructure providers, including
housing associations, are engaged throughout the process, including in
circumstances where a viability assessment may be required?
Question 14: do you agree that where policy requirements have been tested for their
viability, the issue should not usually need to be tested again at the planning
application stage?
36
Improving transparency
115. In cases where viability assessment is still needed in the course of determining
planning applications, the process must become more open, transparent and easily
understood. Full and open publication of all viability assessments would greatly
increase transparency. However, viability assessment is complex and technical. It is
important the communities and decision makers can understand the assumptions and
findings of viability assessments. We propose to update planning guidance to help
make viability assessments simpler, quicker and more transparent. We are
interested in views on the most helpful approach. For example, guidance could range
from setting out clearly defined terms to be used, a preferred approach to calculating
costs and values (including land values), the format and accessibility of viability
assessment reports, through to detailed process and methodology.
116. We also think there is scope to improve how information contained in section 106
agreements is communicated through more consistent reporting on planning
obligations. Local planning authorities are required to publish section 106 agreements,
together with details of any modification or discharge of the planning obligation on their
planning register. The agreement sets out how local authorities are required to use the
funding they receive.
117. Whilst there is a requirement to record each section 106 agreement on the planning
register, there is no legal requirement for local planning authorities to publish summary
data from those agreements, or to monitor and report on whether these benefits have
been received and spent. Nonetheless, we have seen some good practice from across
England where local planning authorities are publishing information on section 106
(and CIL) so that their communities can understand what benefits have been secured
from development and when and how planning obligations have been spent.
118. We propose to amend national planning policy so that local planning
authorities (and elected Mayors) should set out in their plans how they will
monitor, report on and publicise funding secured through section 106
agreements, and how it is spent, following an open data approach. This would
include for in-kind provision of land, affordable housing and infrastructure, and should
be made available in machine-readable formats. We are interested in views on what
factors we should take into account when considering guidance on a standard
approach to monitoring and reporting planning obligations.
Question 16: what factors should we take into account in updating guidance to
encourage viability assessments to be simpler, quicker and more transparent, for
example through a standardised report or summary format?
37
119. We are also interested in understanding how local planning authorities and
applicants can work together to better publicise infrastructure and affordable housing
secured through new development once development has commenced (for example,
on-site signage and publicity on the local authority website); and at which stage of the
application this information would be publicised.
Question 17:
a) do you agree that local planning authorities should set out in plans how they
will monitor and report on planning agreements to help ensure that
communities can easily understand what infrastructure and affordable housing
has been secured and delivered through developer contributions?
b) what factors should we take into account in preparing guidance on a standard
approach to monitoring and reporting planning obligations?
c) how can local planning authorities and applicants work together to better
publicise infrastructure and affordable housing secured through new
development once development has commenced, or at other stages of the
process?
38
Planning fees
Introduction
120. We know it is vital to have well-resourced, effective and efficient local authority
planning departments. At their best they are the engine room for providing new homes
and economic growth in their local area. They work with communities to set the spatial
framework and support the delivery of the local vision. A lack of capacity and capability
in planning departments can act as a constraint and restrict developers’ ability to get on
site and build.
121. An increase in planning application fees is an important step to recognise and
address the significant, nation-wide problem of under-resourced local planning
authorities.
Background
122. Paragraph 2.15 of the housing White Paper set out the Government’s intention to
increase nationally set planning fees by 20 per cent for those local planning authorities
who commit to invest the additional fee income in improving the productivity of their
planning departments. We subsequently invited authorities to make this commitment.
We welcome that all local planning authorities chose to make the commitment and on
this basis we will bring forward regulations at the earliest opportunity which, subject to
Parliamentary scrutiny, enable local authorities to increase fees.
123. Our approach to planning fees recognises that users and potential beneficiaries of
the planning system should contribute to the costs incurred by local planning
authorities in delivering the service. Fees help to secure the financial sustainability of
planning departments, ensuring that the planning system has the right level of skills
and capacity to assess and make the important decisions affecting the locality,
supporting appropriate local growth and the new homes we are committed to see
delivered.
124. We know that many local planning authorities have to invest additional financial
resource into their planning services to supplement fee income to meet the challenge
of delivering new homes. We want to support these authorities, particularly those that
need additional specialist skills for, or are incurring additional costs in, undertaking their
planning functions to support the delivery of well-designed and attractive new homes
for their local area.
39
125. The housing White Paper suggested that an increase of a further 20 per cent on the
current fee level could be applied to those authorities who are delivering the homes
their communities need. We are interested in obtaining views on the most
appropriate criteria to enable this fee increase to be applied.
126. In considering how any further fee increase could be applied we are interested in
options that can support housing delivery while recognising that such increases should
not impact unfairly on applications for other types of development.
Question 18:
a) do you agree that a further 20 per cent fee increase should be applied to those local
planning authorities who are delivering the homes their communities need? What should
be the criteria to measure this?
b) do you think there are more appropriate circumstances when a local planning authority
should be able to charge the further 20 per cent? If so, do you have views on how these
circumstances could work in practice?
c) should any additional fee increase be applied nationally once all local planning
authorities meet the required criteria, or only to individual authorities who meet them?
d) are there any other issues we should consider in developing a framework for this
additional fee increase?
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Other issues
Build out
127. The Government wants to see homes built faster and expects house builders to
deliver more homes, more quickly and to a high quality standard. We recognise that
after planning permission for new homes is granted, a variety of factors can prevent
development from starting and slow down delivery. Rather than focussing on a single
issue, the housing White Paper acknowledged that all parties in the development
process need to play their part in speeding up the delivery of much-needed new
homes. That is why the housing White Paper set out a wide-ranging approach, which
involves:
boosting local authority capacity and capability to deliver;
ensuring infrastructure is provided at the right time in the right places, including
the £2.3 billion Housing Infrastructure Fund;
securing timely connection to utilities;
tackling delays caused by inappropriate use of pre-commencement conditions;
diversifying the housebuilding market supporting new entrants and
encouraging modern methods of construction;
addressing skills shortages by growing the construction workforce;
holding local planning authorities to account through a new Housing Delivery
Test; and
giving local authorities new and improved tools to hold developers to account for
delivery of new homes, backed up by more transparent data about build out.
128. We have already taken some steps, for example, through launching the Housing
Infrastructure Fund in July 2017. Insofar as we consulted on important elements of the
package outlined above, we are considering the responses to that consultation.
However, in the context of the continuing and substantial gap between the number of
homes granted planning permission and the number of homes being built, we are keen
to examine if there are other options for increasing build out rates.
Question 19: having regard to the measures we have already identified in the
housing White Paper, are there any other actions that could increase build out rates?
41
Prematurity
129. The housing White Paper set out a number of proposals to support plan production,
including the standard method for assessing housing need detailed in this
consultation. As a further way of encouraging local authorities to get plans in place, we
intend to set out the circumstances when a planning application may be refused on the
grounds of prematurity in the National Planning Policy Framework, rather than in
guidance (where they are currently). The prematurity guidance is designed to prevent
emerging plans, where they are at an advanced stage of production, from being
undermined by proposals that are allowed before the plan can be finalised. This would
help provide stability and certainty in situations where confidence in the plan-making
process might otherwise be weakened.
Opportunity to review other housing White Paper responses
130. We recognise that a number of proposals set out in this consultation paper are
closely related to, or impact upon, measures proposed in the housing White Paper.
These include proposals on 5 year housing land supply (Questions 3b and 16 of the
housing White Paper) and on the Housing Delivery Test (Questions 17b, 28, 29 and
30).
131. Therefore we would like to give those who have already commented on the housing
White Paper a further opportunity to supplement their responses to these questions
and let us know whether there are any other areas where they would like to add to, or
amend responses to the housing White Paper consultation. In doing so we would be
grateful if respondents identify those questions to which the additional comments
relate.
132. For the avoidance of doubt, please note that the consultation period for the housing
White Paper is now closed and any late responses that relate to questions that are not
affected by this consultation will not be considered.
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About this consultation
This consultation document and consultation process have been planned to adhere to the
Consultation Principles issued by the Cabinet Office.
Representative groups are asked to give a summary of the people and organisations they
represent, and where relevant who else they have consulted in reaching their conclusions
when they respond.
Information provided in response to this consultation, including personal information, may
be published or disclosed in accordance with the access to information regimes (these are
primarily the Freedom of Information Act 2000 (FOIA), the Data Protection Act 1998 (DPA)
and the Environmental Information Regulations 2004).
If you want the information that you provide to be treated as confidential, please be aware
that, under the FOIA, there is a statutory Code of Practice with which public authorities
must comply and which deals, amongst other things, with obligations of confidence. In
view of this it would be helpful if you could explain to us why you regard the information
you have provided as confidential. If we receive a request for disclosure of the information
we will take full account of your explanation, but we cannot give an assurance that
confidentiality can be maintained in all circumstances. An automatic confidentiality
disclaimer generated by your IT system will not, of itself, be regarded as binding on the
Department.
The Department for Communities and Local Government will process your personal data
in accordance with DPA and in the majority of circumstances this will mean that your
personal data will not be disclosed to third parties.
Individual responses will not be acknowledged unless specifically requested.
Your opinions are valuable to us. Thank you for taking the time to read this document and
respond.
Are you satisfied that this consultation has followed the Consultation Principles? If not or
you have any other observations about how we can improve the process please contact us
via the complaints procedure.
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Consultation response proforma
If you are responding by email or in writing, please reply using this questionnaire
pro-forma, which should be read alongside the consultation document. You are able
to expand the comments box should you need more space
Your Details (Required fields are indicated with an asterix(*))
Family Name (Surname)*
First Name*
Title
Address
City/Town*
Postal Code*
Telephone Number
Email Address*
Are the views expressed on this consultation your own personal views or an official
response from an organisation you represent?* (please tick as appropriate)
Personal View
Organisational Response
Name of Organisation (if applicable)
If you are responding on behalf of an organisation, please tick the box which best
describes your organisation
Local Authority (including National Parks, Broads Authority, the Greater London
Authority and London Boroughs)
Neighbourhood Planning Body/Parish or Town Council
Private Sector organisation (including housebuilders, housing associations,
businesses, consultants)
Trade Association / Interest Group/Voluntary or Charitable organisation
Other (Please specify)
44
Proposed approach to calculating the local housing need
Question 1 (a)
do you agree with the proposed standard approach to assessing local housing need? If
not, what alternative approach or other factors should be considered?
Yes
No
Not sure / don't know
Please enter your comments here
Question 1(b)
how can information on local housing need be made more transparent?
Please enter your comments here
45
Question 2
do you agree with the proposal that an assessment of local housing need should be able
to be relied upon for a period of two years from the date a plan is submitted?
Yes
No
Not sure / don't know
Please enter your comments here
Question 3
do you agree that we should amend national planning policy so that a sound plan should
identify local housing needs using a clear and justified method?
Yes
No
Not sure / don't know
Please enter your comments here
46
Question 4
do you agree with our approach in circumstances when plan makers deviate from the
proposed method, including the level of scrutiny we expect from the Planning Inspectors?
Yes
No
Not sure / don't know
Please enter your comments here
Question 5(a)
do you agree that the Secretary of State should have discretion to defer the period for
using the baseline for some local planning authorities? If so, how best could this be
achieved, what minimum requirements should be in place before the Secretary of State
may exercise this discretion, and for how long should such deferral be permitted?
Yes
No
Not sure / don't know
Please enter your comments here
47
Question 5(b)
do you consider that authorities that have an adopted joint local plan, or which are covered
by an adopted spatial development strategy, should be able to assess their five year land
supply and/or be measured for the purposes of the Housing Delivery Test, across the area
as a whole?
Yes
No
Not sure / don't know
Please enter your comments here
Question 5 (c)
do you consider that authorities that are not able to use the new method for calculating
local housing need should be able to use an existing or an emerging local plan figure for
housing need for the purposes of calculating five year land supply and to be measured for
the purposes of the Housing Delivery Test?
Yes
No
Not sure / don't know
Please enter your comments here
48
Question 6
do you agree with the proposed transitional arrangements for introducing the standard
approach for calculating local housing need?
Yes
No
Not sure / don't know
Please enter your comments here
Statement of Common Ground
Question 7(a)
do you agree with the proposed administrative arrangements for preparing the statement
of common ground?
Yes
No
Not sure / don't know
Please enter your comments here
49
Question 7(b)
how do you consider a statement of common ground should be implemented in areas
where there is a Mayor with strategic plan-making powers?
Please enter your comments here
Question 7(c)
do you consider there to be a role for directly elected Mayors without strategic plan-making
powers, in the production of a statement of common ground?
Yes
No
Not sure / don't know
Please enter your comments here
50
Question 8
do you agree that the proposed content and timescales for publication of the statement of
common ground are appropriate and will support more effective co-operation on strategic
cross-boundary planning matters?
Yes
No
Not sure / don't know
Please enter your comments here
Question 9(a)
do you agree with the proposal to amend the tests of soundness to include that:
i) plans should be prepared based on a strategy informed by agreements over the wider
area; and
ii) plans should be based on effective joint working on cross-boundary strategic priorities,
which are evidenced in the statement of common ground?
Yes
No
Not sure / don't know
51
Please enter your comments here
Question 9(b)
do you agree to the proposed transitional arrangements for amending the tests of
soundness to ensure effective co-operation?
Yes
No
Not sure / don't know
Please enter your comments here
52
Planning for a mix of housing needs
Question 10(a)
do you have any suggestions on how to streamline the process for identifying the housing
need for individual groups and what evidence could be used to help plan to meet the
needs of particular groups?
Please enter your comments here
Question 10(b)
do you agree that the current definition of older people within the National Planning Policy
Framework is still fit-for-purpose?
Yes
No
Not sure / don't know
Please enter your comments here
53
Neighbourhood Planning
Question 11(a)
should a local plan set out the housing need for designated neighbourhood planning areas
and parished areas within the area?
Yes
No
Not sure / don't know
Please enter your comments here
Question 11(b)
do you agree with the proposal for a formula-based approach to apportion housing need to
neighbourhood plan bodies in circumstances where the local plan cannot be relied on as a
basis for calculating housing need?
Yes
No
Not sure / don't know
Please enter your comments here
54
Question 12
do you agree that local plans should identify the infrastructure and affordable housing
needed, how these will be funded and the contributions developers will be expected to
make?
Yes
No
Not sure / don't know
Please enter your comments here
Question 13
in reviewing guidance on testing plans and policies for viability, what amendments could
be made to improve current practice?
Please enter your comments here
Proposed approach to Viability Assessment
55
Question 14
do you agree that where policy requirements have been tested for their viability, the issue
should not usually need to be tested again at the planning application stage?
Yes
No
Not sure / don't know
Please enter your comments here
Question 15
how can Government ensure that infrastructure providers, including housing associations,
are engaged throughout the process, including in circumstances where a viability
assessment may be required?
Please enter your comments here
56
Question 16
what factors should we take into account in updating guidance to encourage viability
assessments to be simpler, quicker and more transparent, for example through a
standardised report or summary format?
Please enter your comments here
Question 17(a)
do you agree that local planning authorities should set out in plans how they will monitor
and report on planning agreements to help ensure that communities can easily understand
what infrastructure and affordable housing has been secured and delivered through
developer contributions?
Yes
No
Not sure / don't know
Please enter your comments here
57
Question 17(b)
what factors should we take into account in preparing guidance on a standard approach to
monitoring and reporting planning obligations?
Please enter your comments here
Question 17(c)
how can local planning authorities and applicants work together to better publicise
infrastructure and affordable housing secured through new development once
development has commenced, or at other stages of the process?
Please enter your comments here
58
Planning fees
Question 18(a)
do you agree that a further 20 per cent fee increase should be applied to those local
planning authorities who are delivering the homes their communities need? What should
be the criteria to measure this?
Yes
No
Not sure / don't know
Please enter your comments here
Question 18(b)
do you think there are more appropriate circumstances when a local planning authority
should be able to charge the further 20 per cent? If so, do you have views on how these
circumstances could work in practice?
Yes
No
Not sure / don't know
Please enter your comments here
59
Question 18(c)
should any additional fee increase be applied nationally once all local planning authorities
meet the required criteria, or only to individual authorities who meet them?
Apply nationally
Apply to Individual authorities only
Not sure / don't know
Please enter your comments here
Question 18(d)
are there any other issues we should consider in developing a framework for this additional
fee increase?
Please enter your comments here
60
Other issues
Question 19
having regard to the measures we have already identified in the housing White Paper, are
there any other actions that could increase build out rates?
Yes
No
Not sure / don't know
Please enter your comments here
Your opinion is valuable to us. Thank you for taking the time to read the consultation and
respond.
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