Comment
Power cuts
A northern housing tragedy
The recommended removal of 32 Green Belt housing sites from the Leeds development plan by Inspectors has unsurprisingly drawn the attention of the planning press and prompted informed comment from leading Counsel (this article by Chris Young QC).
Within this piece we provide our views on this latest example of an apparent rolling back of the planned level of housing provision in the North of England, reflecting on how it sits in the context of wider Government housing and economic objectives and the extent to which it seems to be part of a growing trend. We conclude by setting out what the Government must do if it is to stem these increasingly common examples of diminished ambition for places in the North and to set the context for more positive planning.
This is specifically addressed to the Government. It is the changes to the National Planning Policy Framework earlier in the year that have created the conditions in which a “do minimum” approach to housing is deemed to be acceptable, despite the inherent contradictions with its wider policy agenda to deliver more homes and spread prosperity to all areas of England.
Setting the scene – boosting housing supply and delivering the Northern Powerhouse
Whilst we are living through a period of profound political uncertainty the Government remains committed to tackling the national housing crisis. The need to provide a significant and sustained increase in the number of new homes built is a rare shared cross-party objective.
The difficulty many people face in accessing the home they need, at a cost that is affordable, is a major constraint on the mobility and prosperity of a whole generation. Tackling the housing crisis is critical to creating an economy that works for everyone. The Government’s plan[1] acknowledges the importance of both of these issues, with them representing two of its seven overarching objectives.
It is clear, however, that the Government are some way off achieving either their economic vision or the required boost in housing supply. In the case of the former, the UK2070 Commission published its inaugural report just over two weeks ago[2]. This concluded that ‘the United Kingdom is falling short in meeting the stated desire for equality and an inclusive economy. The United Kingdom is decoupling’. This decoupling manifests itself spatially with economic disparities between London and the wider south east and the rest of the UK having grown in recent years.
The Government has sought to make headway in achieving a re-balancing. The Northern Powerhouse represents one of its more high profile initiatives and this month celebrated its 5th birthday. Whilst criticism has been levelled at the progress made in this period, the Prime Minister has in the last few weeks reinforced the Government’s commitment to its progression. A new joint ministerial position for Jake Berry MP was confirmed between the Ministry of Housing, Communities and Local Government, and the Department for Business, Energy and Industrial Strategy. This appointment comes ahead of a refreshed Northern Powerhouse Strategy, due to be published later this year. Jake Berry has been quoted as saying:
“We are on the cusp of a new era for the north with our modern Industrial Strategy boosting economic growth, supporting advanced manufacturing and creating the right economic conditions to make the Northern Powerhouse one of the most competitive, business-friendly regions not just in the UK but in the world.”[3]
Last week’s announcement, therefore, that Leeds – one of the cities at the heart of the Northern Powerhouse – will be planning for a reduced level of growth, and as a result reducing the allocation of land it had previously identified as necessary to support its growth, comes as something of a surprise and arguably a contradiction to achieving these national objectives.
Why and how has the planning strategy changed so dramatically in Leeds?
In 2014 Leeds City Council adopted a Core Strategy with a housing requirement of 66,000 new homes (2012-2028), based on an NPPF tested objective assessment of housing need (OAN). The draft Site Allocations Plan identified and allocated sites to meet the Core Strategy housing requirement of 66,000, and was submitted in May 2017 as being a sound plan on this basis.
The Government’s consultation on ‘Planning for the right homes in the right places’ (September 2017) and indicative outcomes of its standard method for calculating housing need informed the council’s progress on its Core Strategy Selective Review (CSSR), which it had swiftly progressed following the adoption of the Core Strategy. This included the commissioning of a new Strategic Housing Market Assessment (SHMA), which was published in 2017 and referred to the draft outputs of the Government’s standard method. Both the standard method calculation and the SHMA suggested that the ‘need’ for housing in Leeds had fallen significantly for the revised plan period of the CSSR (2017 – 2033). The council took the decision to propose a housing requirement which was higher than the standard method outcome but substantially lower than that set out within its adopted plan. The CSSR is still subject to an ongoing consultation on main modifications following examination, closing on the 28 June 2019.
In the meantime, on 23 March 2018 the council, with DCLG agreement, continued with the Site Allocations examination on a Revised Submission Draft Site Allocations Plan (SAP) on the basis of a reduced housing figure of 46,352 over a revised plan period of 2017-33 (a reduction of circa 20,000 new homes); not only did this not meet the full Core Strategy requirement (2012 and 2028) it also sought to spread that lower requirement over a longer plan period to 2033. The approach by the council was to identify and ensure that only those sites necessary to make housing provision for years 1 to 11 of the Core Strategy (2012-2023) were released from the Green Belt. A further 32 sites that it had proposed for Green Belt release to meet the housing requirement for years beyond 2023 were deleted in the Revised Submission Draft SAP.
The Inspectors’ final examination report for the SAP, published this month, provides confirmation of support to the council’s approach, subject to a commitment to an early review of the SAP which is set out in a new policy ‘Housing Review 1’ (HGR1). This results in a marked reduction in the land available to support the provision of housing in the city.
It is only at the point of review that the council shall consider the need for additional housing allocations beyond 2023 and whether exceptional circumstances exist for any further release of Green Belt land to meet the up-to-date housing requirements of the city. At that point any decision is likely to be heavily influenced by the markedly lower need derived from the standard method.
Is this an isolated incident?
Unfortunately, for those of us involved in interacting with plan-making across the North, it is clear that where Leeds has gone many other northern authorities are looking to follow. This approach to reducing housing provision from previous assessments of need stems directly from the recent changes to the NPPF and the flawed standard method.
Further evidence of reductions include the Greater Manchester Combined Authority’s draft Greater Manchester Spatial Framework. This sets out the intention for Greater Manchester to provide for the minimum level of housing growth permitted by the NPPF, whilst also seeking to present itself as a global city. Criticisms of the justification of this approach have been well documented by this practice, other consultancies and commentators. Other such examples where local authorities, spurred by the standard method, are looking to reduce recently adopted housing requirements, or considerably lower the bar through the progression of new NPPF 2019 plans, are also becoming increasingly commonplace. For example:
- Warrington Borough Council has lowered its proposed housing requirement by around 15% between consultations.
- County Durham historically faced difficulty in pursuing its plan for 1,651 dwellings per annum, leading to the withdrawal the plan. It has now lowered its proposed requirement by over 20% to a level only marginally (2%) above the standard method.
- In the Liverpool City Region, the findings of a comprehensive Strategic Housing and Employment Land Market Assessment – completed only sixteen months ago – have been largely dismissed. Wirral intends to plan for the minimum figures set by the standard method. Halton is proposing a housing requirement that will not meet the need its own evidence base shows will be associated with future job growth. Sefton is using the standard method as a mechanism to rescind its commitment to an early plan review, which was deemed necessary to respond to strong job growth and higher housing need in the city region.
We live in strange times.
Such “strange” outcomes were certainly not the Government’s intention. It was clear to confirm that the calculation of need through the standard method ‘does not represent a mandatory target for local authorities to plan for, but the starting point for the planning process’[4]. The Secretary of State for Housing, Communities and Local Government also went so far as rebutting a suggestion that the methodology could have associated limitations:
“I would underline that the standard method is a minimum, not a maximum, and there is absolutely nothing to stop local authorities planning for growth…Authorities can certainly plan for growth in their numbers and their ambition, and that is something I firmly encourage”[5]
The National Audit Office, however, was quick to diagnose the challenges facing northern authorities in the application of the PPG in a report published in February 2019. This criticised the fact that for large parts of the country, primarily the North and Midlands, the method reduces the calculated need for housing below the levels previously assessed. The significant limitation of the method in this regard is then highlighted, with the NAO confirming that ‘this reduction could hamper local authorities’ plans to regenerate and stimulate economic growth’[6].
Whilst the level of housing provided for in the Leeds Plan remains above that suggested by the standard method calculation, it clearly represents a regressive step – a missed opportunity to boost the supply of housing in one of the UK’s largest cities lying at the heart of the Northern Powerhouse. It is equally apparent that there are many other examples of plans progressing under the 2019 NPPF which will contribute further to the lowering of the collective ambition to deliver the homes that will be needed to support a genuine rebalancing of the country.
We may look back on this period of plan making in years to come and reflect on the “death by a thousand cuts” of a meaningful attempt to boost housing supply. An opportunity missed on a generational and multi-regional level and permitted by a flawed standard method.
What are the implications?
The lowering of authorities’ ambitions for the provision of new housing in the North could reasonably be expected to have some real short-term impacts, including but not limited to:
- A risk that the North progresses down a path where it suffers a similar escalation of affordability issues that we see across much of the South of England as jobs are created but paucity of housing supply creates increased pressure on stock in highest demand and shortest supply.
- Businesses are deterred from investing in the North and existing companies take the decision to relocate elsewhere in instances where the housing offer fails to meet the expectations of more mobile, higher-income, elements of the housing market. The outcome being a further falling behind of the northern economies.
- A failure of authorities to deliver the affordable homes that their own evidence continues to show is urgently needed. The delivery of affordable homes, across the North, has become increasingly dependent upon cross-tenure subsidisation. A reduction in housing requirements has also led to a reluctance to allocate those greenfield sites which demonstrably are able to deliver the homes needed in greater numbers. Whilst city centre markets provide significant net increases in the numbers of homes provided, they lack a diversity of product and very rarely contribute to the supply of affordable homes.
- A contribution to a collective national failure to deliver the needed boost in the delivery of new homes. Any reduction in the level of housing provided in the North must be set in the context of the expectation that authorities across the South will be able to deliver the required notable ‘step-up’ in rates of delivery implied by the standard method. Environmental constraints, as well as concerns expressed by local communities in many parts of the South, potentially represent real barriers to such an uplift being achieved in the short-term at least.
What needs to happen?
Our northern cities and city regions must be supported to plan for a significant level of ambition if they are to fulfil the role the Government has bestowed upon them to meet national economic and housing delivery objectives.
Whilst the NPPF and PPG continue to require authorities to build ‘a strong, competitive economy’[7], the Government’s establishment of a ‘minimum’ starting point for planning for housing needs is, across many parts of the North, serving to dilute the previously recognised role that a boosting of the supply of housing must play across this part of the country, not just the South.
It is agreed that the virtues of a simplified standard method are clear; it should streamline the plan making process. However, in its current form the standard method provides no incentive for local authorities to plan ambitiously above a minimum level. The Government must urgently look to its revision, which must take account not only of market signals indicators, but also reflect the existing scale and quality of housing offer and the extent to which it must grow to respond to economic ambition. Ensuring that affordable housing needs are met in full is another important consideration in any future revision of the standard method.
In the meantime, it is the responsibility of all those involved to scrutinise the outcomes of the standard method through the process of plan-making, with a view to delivering the homes that are needed to support the North’s economic future.
A “do minimum” approach must only be taken where it will not have a detrimental impact on the prospects of local businesses, deter investment or affect the ability of households to access a home which is suitable to their needs and affordable to their circumstances.
For further information on housing provision in the north please contact Antony Pollard, Andrew Lowe or Sarah Cox.
26 June 2019
[1] https://www.gov.uk/government/collections/a-country-that-works-for-everyone-the-governments-plan
[2] UK2070 Commission: UK2070 – An Inquiry into Regional Inequalities Towards a Framework for Action. ‘Fairer and Stronger – Rebalancing the UK Economy’ (June 2019)
[4] MHCLG (2019) ‘Government response to the technical consultation on updates to national planning policy and guidance – A summary of consultation responses and the Government’s view on the way forward’, February 2019, page 6
[5] Housing, Communities and Local Government Committee oral evidence: MHCLG priorities for the Secretary of State, HC 1036 – Rt Hon James Brokenshire MP, Secretary of State for Housing, Communities and Local Government: Response to Questions 35 and 36
[6] National Audit Office (2019) Planning for new homes, paragraph 1.22
[7] Chapter 6 heading of the NPPF (2019)