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Planning for new homes - the National Audit Office report

08.02.2019

Today the National Audit Office (NAO) published its report to MoHoCoLoGo, entitled Planning for new homes. It is an interesting review of the present state of things in the world of residential development and includes some sharp criticisms of some of the current furniture, as well as some interesting data.

It is, at heart, an auditor's report and so the focus is on value for money – specifically how well the department "supports the planning regime to provide the right homes in the right places".

Its headline conclusion is that the planning system is not working well in this respect and is not providing value for money in that context.

It acknowledges that some of the ways in which the system has been sought to be improved – for example NPPF2 2018 and the reforms to developer contributions – will take time to show an effect and so it is too early to judge them. It also recognises that building the 'homes the country needs' is a complex task and amounts to a major increase in delivery.

The report does not, however, pull any punches when addressing the overall approach to the delivery of more houses.

One key theme – which may not be music to the development industry's ears – is the implication that where the system provides for reduced local authority control over the process – for example with the 'presumption in favour of sustainable development' – the consequent additional freedom for developers on where they can develop (as the report puts it) is a bad thing.

The importance of up-to-date plans is emphasised (and is largely uncontroversial) but there does appear to be an implied suggestion that allowing developers control over where they develop is something to be avoided, which I am not sure is sufficiently explained in the report. The most obvious countervailing benefit – that more homes get built that way – does not really get acknowledged.

The Standard Method

The new Standard Method, introduced in NPPF 2018, is described (accurately, in my view) as simple, with weaknesses. The report highlights a key such weakness – its lack of real flexibility to address local circumstances, which can and do vary greatly.

The familiar point is made that it also relies heavily on replicating past trends (and therefore has the potential to 'bake in', as the ghastly phrase has it, the very reasons we face a housing crisis today) but - unsurprisingly for an auditor's report - no suggestions of a better method are offered.

The report also contains some interesting graphs demonstrating the likely geographical impact of the new Standard Method – skewed significantly towards increasing supply in the south, and often serving to reduce it in the north.

The report also touches on the long-awaited (but not yet in force) Housing Delivery Test, indicating that the Government "intends to introduce it in 2019" (!). This is likely to be a challenging test to meet for those authorities who have seen their need increase (under the Standard Method) and again the report notes that this risks placing greater freedom in the hands of developers (the implication being that such an outcome would be a bad thing). It also notes the obvious point that local authorities cannot actually control delivery – and makes reference to the Letwin Report which developed this thinking.

The remainder of the report is an interesting review of the performance of the planning system in a structural sense – noting that while local authorities appear to be determining more applications and quicker, the Inspectorate is not and needs improvement (hence, in part, the forthcoming Rosewell Review).

The report also notes a number of structural constraints on improved performance, including the major fall in funding to local authorities (mitigated in part by an increase in contributions from the development industry) and what it describes as a skills shortage amongst local authority planning departments (and staff shortages at PIns).

The report concludes with five recommendations (at paragraph 26):

1. MoHoCoLoGo should regularly monitor the gap between the aspiration to deliver 300,000 new homes by the mid-2020s, the actual performance and the total requirement implied by the Standard Method (which will fluctuate for so long as it relies on the ONS household projections, issued every two years);

2. It should find ways to 'support' local authorities that fail the HDT;

3. Performance monitoring for local authorities and PIns needs to be improved significantly;

4. MoHoCoLoGo should work with local authorities and others to ensure provision of the necessary infrastructure to support housing delivery;

5. There should be detailed research on the skills gap within local authority planning teams, especially in respect of the shortage of experienced planners.

Joe Cannon has a busy planning practice with a particular expertise in matters of housing need and supply, combined with a successful licensing practice. He is currently acting for Gladman Developments Ltd in an appeal in respect of 200 homes on the edge of a Somerset village, and for Uttlesford DC in respect of 150 homes on the edge of an Essex village.