Comment

New proposals seek to decrease land supply for housing in Oxfordshire

This week the Oxfordshire Growth Board met to discuss a proposal which would see Oxfordshire Local Planning Authorities (LPAs) having to demonstrate only a three year supply of land for housing, before the presumption in favour of sustainable development is taken to apply for the purposes of determining planning applications.

This temporary arrangement, which could in practice be in place from the autumn of 2018 to circa 2021, will supplant the usual requirement to demonstrate a five year supply of deliverable sites and could be approved through a bespoke written ministerial statement to be published this September.

The Growth Board, which is comprised of representatives from each of the Oxfordshire LPAs and the county council, is to submit responses received during a recent consultation on the proposal to the Ministry of Housing, Communities and Local Government for consideration. Turley submitted representations on behalf of a consortium of clients active in the county. The three year supply requirement will constitute part of the ‘Oxfordshire Housing and Growth Deal’, which the Board is seeking to conclude with Government. This deal will see the Oxfordshire council’s commit to delivering the 100,000 dwellings by 2031. This is the figure identified in the Oxfordshire Strategic Housing Market Assessment (SHMA) as being required to meet the county’s housing need to that point. The Growth Board will also produce a Joint Statutory Spatial Plan (JSSP), which will set out a high-level vision for Oxfordshire’s longer-term growth until 2050.

In exchange, the Growth Board has been promised £215 million of additional funding for infrastructure and affordable housing in the county, as well as two key planning flexibilities. These flexibilities include a bespoke (and less judicious) application of the new housing delivery test, from November 2020. The other proposal is for the introduction of a requirement to demonstrate a three year supply of land for housing, in place of the usual requirement to demonstrate a five year supply. This arrangement is envisaged to be temporary, but it will be in effect until at least 2021 and quite possibly well beyond this point, depending on how the JSSP fares at Examination. In essence, these commitments are the Growth Board’s price for agreeing to deliver the number of dwellings identified as being required in the SHMA, rather than the greatly reduced number of new homes identified via the application of the new standardised methodology for calculating housing need.

The Growth Board contends that it is necessary to implement a temporary three year supply test in order to inhibit speculative developments. This is allegedly essential to allow the Growth Board to progress work on the JSSP and give the Oxfordshire LPAs an opportunity to concentrate on delivering strategic allocations and infrastructure, rather than defending planning appeals. However, Turley has undertaken a detailed analysis of the implications of the proposed three year housing supply test. We found that the proposals will reduce the housing supply that the Oxfordshire LPAs will need to sustain, before becoming subject to the ‘presumption in favour of sustainable development’, by approximately 10,700 dwellings, compared to what they would currently need to demonstrate a conventional five year supply.

By contriving to restrict the application of the presumption in favour of sustainable development, the Oxfordshire LPAs recognise that they will not be compelled to grant planning consent for proposed residential developments, on unallocated but otherwise sustainable sites, even in those instances where the deliverable supply of new homes demonstrably falls well below the rates anticipated in Local Plans and council Housing Supply Statements. The three year supply test represents a very low bar for the LPA’s to achieve and, whilst it is in place, the flexibility is likely to have the effect of diluting one of the most effective mechanisms which the Government uses to boost the supply of new homes. It is also concerning that the flexibility will reward those councils, notably South Oxfordshire District Council and Oxford City Council, which have failed to effectively progress toward up-to-date and sound Local Plans. Indeed, South Oxfordshire has indicated its intention to submit its Local Plan for Examination, whilst publicly acknowledging that its main strategic allocation is almost certainly undeliverable.

Turley Economics has modelled the potential impacts which are likely to arise if, as an unintended consequence of the proposals, the delivery of new homes falls significantly. This includes a reduction in construction investment by approximately £1.3 billion, the failure to generate 8,700 new jobs and the failure to ensure that 13,200 economically active people employed in Oxfordshire are able to live within the county. Such consequences would clearly run contrary to the wider objectives of the Growth Board and the Government, which aim to enhance Oxfordshire as a key location for innovation, inward investment, enhanced economic productivity and employment growth.

The development industry has voiced strong objections to the proposed three year supply flexibility and the Ministry of Housing, Communities and Local Government will decide whether it is prepared to accept this demand. If the Housing Minister finds the proposal agreeable, it is likely that a written ministerial statement will be published in the autumn of 2018, with the three year supply test being put into effect at that point.

Whilst Oxfordshire is the first area to progress a bespoke deal with the Government, it is unlikely to be the last. Indeed, this is made clear in the updated NPPF, which at paragraph 217 (the very last paragraph in the document) indicates that the “Government will continue to explore with individual areas the potential for planning freedoms and flexibilities, for example where this would facilitate an increase in the amount of housing that can be delivered”.

If you have any questions relating to these new proposals, please contact Tim Burden.

1 August 2018