Tim Ambler: How Government Housing Plans Can Succeed

Civitas, 22 June 2021

A guest post by Tim Ambler

Views may differ on how many additional houses we need, and where they should be, but almost everyone agrees that the Ministry of Housing, Communities and Local Government (MHCLG) should make its mind up and get on with it, and that planning should be streamlined and speeded up. The Queen told us last month ‘Laws to modernise the planning system, so that more homes can be built, will be brought forward.’[1] Similar initiatives in the past have failed and reasons include unclear rules for approving applications and delays caused by the consequent appeals. Clarifying the rules is primary and, once that is achieved, the brake, created by the Planning Inspectorate, can be taken off. MHCLG can monitor the performance of local planning authorities (LPAs) in much the same way as it monitors other local authority responsibilities.

On 20 December 2010, the then minister for decentralisation, Greg Clark, claimed he would consolidate all prior announcements into a single, simpler National Planning Policy Framework (NPPF), published 27 March 2012, which would be promptly implemented.[2] The nine years since have seen plenty of talk and papers but little, if any, action. Revised NPPFs appeared in 2018, 2019[3] and a whole new White Paper in August 2020.[4] Except it wasn’t; it was a consultation, i.e. green and not white. Latest word from MHCLG indicates no actual Bill before autumn, if then.

This note has to assume, the Bill will look something like the White Paper. The Commons Library has published an excellent critique.[5] Also excellent is the Select Committee Report of 10^th June.[6] A Government response is due by early August. This paper focuses on possibly the single biggest planning blockage, namely HM Planning Inspectorate in Bristol. The White Paper refers to that just five times:

‘Local authorities and the Planning Inspectorate will be required through legislation to meet a statutory timetable (of no more than 30 months in total) for key stages of the process, and there will be sanctions for those who fail to do so.’
‘by ensuring greater certainty about the principle of development in Local Plans, we expect to see fewer appeals being considered by the Planning Inspectorate. For those that do go to appeal, we want to ensure the appeals process is faster, with the Inspectorate more digitally responsive and flexible. And to promote proper consideration of applications by planning committees, where applications are refused, we propose that applicants will be entitled to an automatic rebate of their planning application fee if they are successful at appeal.’
Local Plans will now have to be drawn up according to new complex and bureaucratic rules with central Inspectors involving themselves as and when they please. (Proposal 8).
‘5.15. In addition, other key players, including the Planning Inspectorate and statutory consultees, will have to transform the way they operate in response to these reforms, given their critical role supporting the preparation of Local Plans and decision-making. They too will need to be more responsive and outward looking, and have the necessary skills and resources to undertake their new roles.’
‘5.16. We think the proposals set out in the document should remove the risk of judicial review substantially.’

The White Paper increases the role and powers of the Planning Inspectorate at the expense of local democracy and planning authorities. Indeed, it could have been written by the Planning Inspectorate. Note the bias in the second bullet above, encouraging parties to appeal to the Inspectorate. Contrary to the fifth claim, an increase in judicial review looks to be a certainty to restore some balance. The Inspectorate is not the solution; they are the problem. Why do we need them at all? The planning system would clearly be speeded up if that piece of the jigsaw was removed and not replaced by some other nonsense of the MHCLG’s devising.

The Select Committee’s report refers to the Planning Inspectorate three times:

LPAs and the Planning Inspectorate will need to take account of whatever standard methodology the Government finalises for delivering the national requirement for additional homes.
Validating LPA projections using past delivery rates, regeneration, vacancy and second home rates, and specific types of housing, i.e. evaluating LPAs assessments of housing needs.
They note the increased role of the Planning Inspectorate in evaluating Local Plans will ‘require sufficient resources to carry out this important role effectively.’ (para. 184)

The first two of these suggestions are similar but the Planning Inspectorate has no expertise in the macro-issues of how many homes should be delivered where nor in monitoring the overall performance of LPAs in meeting planning rules and delivering government targets. Their expertise lies in determining whether individual, micro-applications comply with the law. The third Select Committee observation above would, of course, be correct were the Inspectorate to take this on. But why should they? MHCLG and PLAs can obtain expert advice from wherever they like, and if that is from the Inspectorate, so be it, but it is much more likely that LPAs would look elsewhere. Furthermore, MHCLG already monitors local authority performance across the whole range of their activities; conformity with planning rules and delivering housing targets could easily be added. MHCLG uses the funding carrot to achieve compliance; the Planning Inspectorate has no such facility.

According to the Inspectorate’s latest annual report,[7] their targets set by ministers for their central function, namely planning appeals, are to determine 80% of written representations and hearings within 14 weeks. In 2018/19, they achieved those goals 58.8% and 23.6% of the time respectively. The following year they achieved 50% and 20% respectively (p.131). In 2019/20, only 55% of users were satisfied with the appeal process.

No one living in my parish will be surprised by these figures. One current appeal concerns rights of way over a farmer’s land. A very few parishioners have used footpaths that may, or may not, be legal rights of way since any of us can remember. Previous generations of the farmers were not bothered and nor were their cattle and wildlife. The new one disagrees but the parish, district and county councils all found in favour of the walkers. It should have been sorted out at a village hall meeting but the Planning Inspectorate decided to take it seriously in 2018 and have been bombarding us with paperwork ever since. We suspect the delay is due to their reluctance to travel from Bristol to North Norfolk but who can say? The Inspectorate is holding a meeting next month but few imagine that will conclude the matter. Three years have gone by so far and it is not even about building a single house.

Performance on Rights of Way, Wildlife and Countryside matters are even worse than the performance figures above. The targets are 80% in all three cases and achievements were 42.1%, 33.3% and 48.8% respectively. One wonders why any of these fall under the jurisdiction of the Planning Inspectorate in the first place. They should be decided by parish councils with the right of appeal to district/unitary councils but no further.

The Planning Inspectorate employed 650 permanent staff in 2018/19 and 738 the following year at a cost of £34.8M and £43.6M respectively (pp. 94/5). The number of appeals and decisions have declined since 2016/17 which doubtless explains why they need 12% more staff (p. 45). If the White Paper proposals were introduced, those would drastically increase. One has to make allowances perhaps: ‘We made significant progress in reducing the number of cases being considered across all workstreams from around 13,000 to around 9,500……….. We were supported in this by MHCLG providing £13m of funding for a two-year performance recovery programme (2018/19 – 2019/20)’ (pp. 18/19). No doubt the pandemic has not helped but working from home and internet facilities, such as Zoom meetings, were readily available for the Inspectorate, albeit reluctantly adopted.

To be fair, the one part of the Planning Inspectorate which does seem to work well is on Nationally Significant Infrastructure Projects. Here reports were on time (pp. 32/33). This is the only part of the Planning Inspectorate that should be retained. We can now consider how the MHCLG objectives could be better secured without the rest.

In essence, there are two battlegrounds:

Meeting the national needs for additional homes versus local residents’ wishes – often expressed as NIMBYism. Local authorities, who are actually the main decision-makers, are caught in the crossfire. Whilst they may welcome growth and increased council taxes, the councillors also seek to please their constituents. The planning officers are more concerned with following the rules. MHCLG hope to increase the provision of additional homes by tipping the rules toward the officers and away from councillors but that is limited, or the pace is limited, by the willingness and ability of developers to build. Plaining gain, i.e., the increase in the value of the land arising from change of use approval, should be taken by the local authority and used primarily for any public works required by the development, e.g., roads, with any surplus transferred to funding affordable homes.
Meeting the needs for additional affordable homes, for ownership or rental, is ultimately a battle with HM Treasury. Affordable means a discount from free market pricing and however clever MHCLG tries to be with Section 106 schemes and the like, the gap between what the private sector provides, planning gains and national requirements will have to be funded by the public purse. HM Treasury and local authorities may squabble over how that is done, but it will be a public subsidy in some form or other.[8]

Streamlining and speeding up planning decisions means, in effect that the maximum percent of applications should be finally decided at local authority level. For this to happen, the rules need to be much clearer than they are now – not, pace MHCLG, the same everywhere but clearer in each local authority. That means three simple tests: the percent going to appeal, the percent of appeals that reverse the local authority decision and whether the required number of additional new homes are delivered. Fewer going to appeal and fewer succeeding would indicate the rules are clearer. The additional new homes requirements will inevitably have to be negotiated between MHCLG and local authorities but these do not necessarily have to be new buildings; the pandemic shows that an increasing number may be secured by change of use.

Be that as it may, the Inspectorate has a vested interest in keeping things as they are, i.e., encouraging appeals, and the taxpayer has a vested interest in clarifying the rules so that appeals are minimised and fail when they happen. If MHCLG wants additional homes in a hurry, it should remove the Inspectorate from any involvement. In two-tier local governments, appeal could be held by the higher tier, i.e., the county council. Where there are unitary local governments, higher level appeal courts would be needed but with the lower needs envisaged here, costs would be minimal.

The Chesham and Amersham by-election this month makes clear that the electorate does not wish local democracy to be removed from decision-making as the White Paper proposes. The proposals above would allow for that and also for local authorities to withdraw planning consents from developers’ land-banking, i.e., seeking to profit from planning gain without building houses. On the other hand, there does need to be a bias towards building additional homes where they are most needed, i.e., the south east.

Finally, the White Paper’s solution to affordable homes is:

‘The Community Infrastructure Levy and the current system of planning obligations will be reformed as a nationally-set value-based flat rate charge (‘the Infrastructure Levy’). A single rate or varied rates could be set. We will aim for the new Levy to raise more revenue than under the current system of developer contributions, and deliver at least as much – if not more – on-site affordable housing as at present.’ (p.18)

The Commons Briefing Paper could not find anything nice to say about this vague and unquantified proposal and nor can I. Maybe there were fewer than we need but the section 106 arrangements now to be demolished did fund 49% of them. The point for this paper, though, is that the Planning Inspectorate has nothing to do with them: the word ‘affordable’ does not appear anywhere in their last annual report.

In short, if Government wants more, and more affordable, homes it must indeed speed up and streamline the planning system. To do that, the crucial first step is to clarify the rules for approving, or dismissing, planning applications so that they are effective at local level and also deliver the required housing targets. The Planning Inspectorate must continue to deal with national infrastructure projects but would then be able to step away from local planning, removing a significant brake thereby. The MHCLG would monitor LPA performance as it does for the other local authority responsibilities.

Notes

[1] https://www.gov.uk/government/speeches/queens-speech-2021

[2] https://www.gov.uk/government/publications/national-planning-policy-framework–2

[3] https://www.gov.uk/government/collections/revised-national-planning-policy-framework

[4] https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/958421/Planning_for_the_Future_web_accessible_version.pdf

[5] https://commonslibrary.parliament.uk/research-briefings/cbp-8981/

[6] https://committees.parliament.uk/work/634/the-future-of-the-planning-system-in-england/publications/

[7] https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/916690/annual_report_2019_2020_Final_published.pdf

[8] https://www.insidehousing.co.uk/comment/comment/the-end-of-section-106-could-prove-a-transformative-moment-for-affordable-housing-67414