What does the housing white paper mean for Local Planning Authorities?

What does the housing white paper mean for Local Planning Authorities?

Since the publication of the NPPF in March 2012, the issue of five-year housing land supply (‘5YHLS’) has been a key factor in countless planning appeals and court judgements. The oft quoted paragraph 49 of the NPPF is clear: ‘where a Local Planning Authority (LPA) is unable to demonstrate a 5YHLS, relevant policies in their Local Plan should be considered out-of-date’ (the terms ‘relevant policies for the supply of housing’ and ‘out-of-date’ being the subject of an upcoming Supreme Court hearing). The extent of a LPA’s housing supply deficit has also been an area of hot debate. Innumerable assessments prepared by applicants and appellants have typically shown a considerably greater deficit than that claimed by the LPA.

Two proposed changes in the recently published Housing white paper will have a direct effect on the ‘dark art’ of housing land supply.

Firstly, the planned introduction of regulations for development plans to be reviewed or updated every five years, where the housing target can no longer be justified against an LPA’s objectively assessed housing requirement. In practical terms, this will significantly foreshorten the shelf-life of local plans from the current 15-20-year timeframe, because housing provision is inextricably linked to other matters such as economic growth and associated infrastructure provision. You can’t simply plug in a new housing figure and leave the rest of the plan untouched.

Why does this affect the calculation of housing supply? Well, if the housing target is in a state of constant flux (being considered out-of-date when a replacement plan is at an early stage), then the uncertainties over what housing requirement should be used over the five-year period will be perpetually reinforced.

The white paper intends to bring forward a standardised approach to assessing housing requirements. The obvious implication is that applicants and appellants can more easily argue that the LPA’s current housing target is out-of-date and should reflect the latest calculation.

The second headline change is the proposed introduction of a ‘housing delivery test’ for LPAs, which considers the LPA’s delivery of housing against its requirement. This begs the question: what constitutes an LPA’s housing requirement? The white paper states that where a LPA has an ‘up-to-date’ local plan, it should be based on that. The white paper defines an ‘up to date plan’ as less than five years old thus reinforcing the assumption that plans are updated or at least partially reviewed every five years. If no up-to-date plan, then Department for Communities and Local Government (DCLG) published household projections are relied on until 2017. Thereafter the white paper suggests the figure will be based on the proposed standard methodology for establishing housing need.

The housing delivery test will be implemented on a phased basis and will be calculated on the annual average housing delivery over a rolling three-year period within a LPA area. Initially the period of assessment will be 2014-17, with the results published in November 2017. Sanctions on LPAs will be put in place if they don’t meet the housing delivery test. In 2017 the sanctions will be:

The sanction of a 20% NPPF buffer finally appears to constitute a specific definition of what ‘persistent under-delivery’ is, as set out in paragraph 47 of the NPPF. Whilst not stated, it appears logical that these sanctions are cumulative. For example, if a LPA only achieves 50% of its target, it will also need to produce both an action plan and apply a 20% NPPF buffer.

And there’s another sting in the tail for LPAs. As an extension to the delivery test, the Government intends to introduce a tougher sanction for very low delivery against the housing target, which is to be stepped up each year to 2020. Where LPAs fall below a set threshold, relevant policies to the provision of housing will be considered out-of-date, like the current NPPF paragraph 49 provision. From November 2018 an initial threshold will be introduced at 25% (below which the plan will be considered out-of-date), stepped up to 45% in November 2019 and 65% in November 2020. If applied cumulatively, a LPA will face all three sanctions of the housing delivery test. This is undoubtedly a big stick being wielded by Government to coerce LPAs into action and will have major ramifications for the calculation of a 5YHLS. The threshold of 85%, below which a 20% NPPF buffer will be imposed, is likely to catch many LPAs who are currently arguing that only a 5% buffer is appropriate. Adding a 20% buffer will inevitably make it harder for those authorities to demonstrate a 5YHLS.

Whilst the intention of the white paper is to send a clear signal to LPAs to have up-to-date plans and to deliver on those planned housing targets or face punitive sanctions, can these expectations really be achieved? Recent performance suggests not. Despite an earlier threat by the DCLG in 2015 that LPAs will face sanctions if they do not have an up to date Local Plan in place by ‘early 2017’, research in July 2016 of all LPAs showed that 60% were still yet to achieve this. It has been well publicised that cuts to planning staff has been disproportionately high compared to other Council departments. How then can a sudden increase in performance be achieved against this backdrop? The ring-fencing of a 20% increase in planning application fees to planning departments proposed in the white paper may help a bit, but is unlikely to offset costly evidence base documents and additional staff.

Ironically the outcome of the white paper – as currently written – may be to achieve the opposite of its stated intention to be a plan-led system and to avoid unplanned or speculative development. The various sanctions and changes are likely to lead to an increased likelihood of local plans being considered out-of-date, potentially even if only recently adopted. Inextricably linked to this, the ability of LPAs to demonstrate a five-year housing supply will also be tougher with more authorities likely to have a 20% buffer imposed on them, increasing their five-year requirements further. From a developer perspective, these changes will provide greater opportunities for promoting planning applications and lodging appeals on speculative windfall sites, as in most cases it will be easier to construct an argument that the LPA hasn’t delivered.

An additional but important footnote to the white paper is whether the current High Court Judicial Review by Richborough Estates et al vs SoS CLG will be successful. This is in relation to the Secretary of State’s Written Ministerial Statement (WMS) of 12 December 2016 which states that neighbourhood plans can only be considered ‘out of date’ (in the NPPF paragraph 49 context) when the LPA has less than three years’ deliverable supply. The position of the WMS does seem somewhat at odds with the aims and ambitions of the Government set out in the white paper, and if the challenge is unsuccessful, would provide a perverse incentive for LPAs to encourage the production of Neighbourhood Plans.