3rd Floor, Fry Building
2 Marsham Street
SW1P 4DF 30 September 2020
PLANNING FOR THE FUTURE CONSULTATION
Dear Sir or Madam
- I am writing on behalf of the Bishop’s Stortford Civic Federation to comment on this White Paper.
- The Civic Federation, a registered charity, is a partnership between the former Civic Society and most of the active residents’ associations in the town. Its role is described in its constitution as follows:
‘The purpose of the Civic Federation is to promote, for the public benefit, the improvement of Bishop’s Stortford and its surroundings particularly but not exclusively by: a) Examining proposed developments in the town on behalf of members, and commenting on them. b) Informing members of various developments/issues. c) Providing a social media site to provide updates and an overview of residents’ opinions. d) Acting as an umbrella organisation for the town’s Residents’ Associations.’
- We estimate that the member residents’ associations collectively represent about 7500 households in the town. Each member association is entitled to nominate a member to the Civic Federation’s committee to represent their member association’s views. This response has the unanimous support of the Civic Federation’s committee.
- We have a number of more general observations to make about the White Paper ’Planning for the Future’ which do not fit easily within the framework of the questions on which you have asked for responses. We therefore set them out in the remainder of this introduction, before responding to the questions you have set out.
- The stated aim of the White Paper is to facilitate the construction of 300,000 new dwellings a year and 1 million over the life of the present Parliament. At present, construction rates fall well short of this although the increase in the housing stock of over 241,000 last year is the highest total achieved for some considerable time. A supplementary aim is to increase the supply of affordable homes in the places where the need is greatest.
- The White Paper asserts that the current planning system is an obstacle to achieving these aims and that is why it proposes to reform it. However, the assertion is not supported by any evidence, and such evidence as is available tends to suggest that the obstacles to delivery lay elsewhere. According to the Local Government Association, nearly 90% of all planning applications receive approval, and since 2009/10, planning permission has been granted for 2,564,600 residential units, but only 1,530,680 have been completed over the same period.
- Research undertaken by the housing charity Shelter (published in August 2019) showed that over the period 2011/12 to 2017/18 the number of planning permissions (as defined by the Home Builders Federation as the point at which detailed permission has been granted) more than doubled, rising to 382,997 in the last year surveyed. But over the same period, completions rose by only 52%, reaching 195,294 in the last year surveyed. There is of course a lag between grant of permission and completion but even if a time delay of three years were allowed, completions would comprise only 83% of permissioned units, a shortfall of nearly 150,000 dwellings.
- So we have to look elsewhere than the planning system to explain the shortfall in delivery of units against planning permissions which have been granted, a deficit that was rising even before the Covid 19 pandemic brought construction activity to a halt. In part, the answer lies in Sir Oliver Letwin’s Independent review of build out (which receives a passing mention in the White Paper). This concluded that the fundamental driver of build out rates once permission was granted was the ‘absorption rate’ – the rate at which market sale homes can be sold without undermining the local market.
- Our experience in Bishop’s Stortford bears this out. A major development site north of the town was granted planning permission for about 2,500 dwellings in 2015. At the time it was estimated that it would take 10 years to build out the whole development, an unimpressive completion rate of only 250 dwellings per year. An adjacent site, owned by the main developer consortium involved, finally received planning permission for 247 dwellings in 2017. There is no sign of work starting on that site yet.
- So long as the Government relies entirely on the private sector (and mainly volume house builders) to deliver all types of housing including ‘affordable’ housing on a commercial basis, then it seems unlikely that completions will exceed the historic high rate of last year and certainly not the aspiration to do so on a continuing basis, and the proposed reform of the planning system is more likely to disrupt than promote higher rates of completion.
- It should be remembered that completions of 300,000 or more dwellings per annum have not been achieved on a sustained basis since the 1960’s. At that time, nearly half the total was provided by local authorities and housing associations building social housing in response to perceived need, rather than responding to market signals about where house prices are highest. Providing the powers and funding for local authorities and housing associations to do so again could help to achieve the Government’s stated aims of raising the level of completions, building dwellings where they are most needed, and creating a supply of housing which is genuinely affordable.
- The Government’s current definition of affordability – 80% of market housing values – is an oxymoron. The current cost of housing is not connected to or determined by the earnings of the occupants or would be occupants. For example, in a town such as Bishop’s Stortford, house prices, even if discounted by 20%, place them beyond the means of those on far more than average earnings.
- It is not helped by the fact that the Government appears to be confusing demand with need. To take an extreme example, in a central London borough such as Westminster, key groups of employees, such as teachers, medical staff, public transport workers and refuse collectors, need homes near to their places of work. But the demand, and hence the cost of housing is driven by people of high net worth, looking for a safe haven for their wealth, and often with no intention of living in the highly priced residential units that receive planning permission.
- The cost of building a house is much the same across the country, but house prices vary considerably depending on their location. Market prices are largely determined by the prices at which the existing housing stock is sold. In the year to June 2019 there were 811,277 property sales in England. Even if this figure included all the 241,000 completions of new dwellings, new build would have accounted for only 30% of sales. England currently has a stock of 24.4 million residential units. Lifting the rate of new build completions by 100,000 a year is unlikely to have a material impact on the prices at which houses are sold.
- Other forms of tax payer funded assistance – help to buy and stamp duty relief now, mortgage interest tax relief in the past – invariably fail to help those at whom they are targeted and simply distort the market by feeding into higher house prices. At the same time, volume house builders enjoy profit margins that would be the envy of any other sector of the economy. In the crisis caused by the pandemic, Barratt Homes recently announced a fall in pre tax profits of 46%. But their operating profit margin was 14.4% and the return on capital 15.6%. They have no interest in reducing the scarcity of supply of housing.
- Another element of market failure in housing relates to the failure to capture development value when land use is altered to permit development. The variation in house prices across the country tends to be reflected in increases in the value of land, when it is zoned for development. Here of course, the planning system does have a role to play.
- The Town and Country Planning Act 1947 was introduced as a response to the unregulated sprawl of development which took place in the 1920’s and 30’s. Land is the archetypal finite resource, and England is one of the most densely populated countries in Europe. The supply of land for development therefore needs to be subject to some form of rationing system which allocates only as much as is needed for the purpose in the right locations. The owners of that land are the lucky winners in that process. Through no virtue of their own, they enjoy a huge windfall enhancement in the value of their land which is not currently captured for the public benefit through the taxation system or by any other means. This needs to change. The current system of developer contributions is calculated on the basis of the return they will make after acquiring land at the enhanced value resulting from planning permission.
- Another distortion in the market is the result of the differing tax regimes applying to new build and to refurbishing existing buildings. The former are zero rated for VAT while the latter are charged VAT at the standard rate. This bias in favour of new build inevitably leads to higher costs and a greater disincentive towards modernising or converting the existing housing stock which, as described in para 14 above, overwhelmingly predominates in housing supply.
- Finally, the supply of housing is affected by the availability of skills to complete construction. Sir Oliver Letwin’s report identified a major shortage of bricklayers (still required for the most common form of house construction) as a serious constraint. This problem can be expected to become far worse and may apply to other skills as well when freedom of movement from Europe comes to an end at the beginning of 2021.
- In summary, therefore, there are serious market distortions and failures which are inhibiting the supply of more housing, and which should be addressed, but the current planning system does not appear to be one of them.
- It should also be noted that the planning system covers much more than the supply of land for housing, though it is hard to detect this from the White Paper. The planning system regulates development and change of use of all land and any “simpler, faster and more predictable system” must be designed to meet the changing needs of all users – not only the housebuilding industry. The White Paper says nothing about how a simplified zoning system will impact on the supply of land for the other uses which are either in competition with housebuilders or which is needed to support new housing development.
Responses to Questions
- Preventing unrestricted development
- Newspaper/Post/Notification by the Local Planning Authority (LPA) of specific development proposals
- We do not think that we should be restricted to three priorities. Nevertheless, within that constraint we would highlight protection of green spaces/the environment, biodiversity and action on climate change/increasing the affordability of housing.
- No. The existing planning system and the East Herts District Plan (adopted in 2018) already categorise sites in terms of their development potential or degree of protection. The only purpose of this proposal appears to be to limit or remove the opportunity for community groups and individuals to comment on specific development proposals, which, it would appear, would receive automatic outline planning permission, regardless of their content.
- No. This proposal seems to be a triumph of hope over experience. The proposals depend entirely on the development of rules in the NPPF which are universally applicable, unambiguous, and appropriate to the entire range of local circumstances. The current NPPF (now on its third iteration) was intended to replace over a thousand pages of planning policy, but has itself been supplemented by over 50 Planning Practice Guidance Notes on subjects ranging from Advertising to Water Supply. There is no reason to believe that the next edition, if it is to be of any value in managing development, will be able to avoid the need for such detailed interpretation. Nor do we think there is any harm in including national policies in local plans, since that provides developers and others with a single source of information about what requirements are to be met.
7 (a). No. The replacement text appears to depend entirely on a definition of sustainability which would be determined at the whim of the Secretary of State.
7 (b). In the absence of a duty to co-operate to achieve a coherent approach towards strategic issues there would seem to be two options. One would be to resurrect the system of regional planning which the previous coalition Government abolished. The other would be to replace the existing patchwork of planning authorities with a smaller number of larger ones which would be able to encompass strategic issues within their own boundaries. That would, however, create a challenge about ensuring the effectiveness of local community engagement. Alternatively, the duty to co-operate could be retained.
By way of example, the most significant strategic planning issue confronting Bishop’s Stortford is the outstanding application for the expansion of Stansted Airport less than 3 miles from the town – an application which the Government decided was only of local importance and should therefore be determined by Uttlesford District Council, one of the smallest planning authorities in the country with no currently approved development plan. Moreover, the White Paper recommends that in order to ensure neighbouring Uttlesford prepares a local plan in 30 months it need no longer have a duty to co-operate with Bishop’s Stortford’s planning authority – East Herts District Council – when planning the future of the UK’s 4th largest airport. Simply abolishing the duty to co-operate without proposing any alternative is not acceptable.
8 (a) and (b). No. As set out in detail in our introduction, the main determinant of house prices is the prices fetched in sales of the existing dwelling stock, and is unrelated to the earnings of residents or would be residents in an area. A crude standard formula which defines need as the gap in an area between earnings and affordability (itself a flawed definition when described as a fixed percentage of market prices) is likely to lead to perverse outcomes and unlikely to achieve build out rates which would have any impact on market prices. Even the present approach towards calculating housing need did not safeguard the Green Belt in the current East Herts District Plan where 43% of all new housing is allocated to sites which were formerly within the Green Belt. We also feel that the focus on existing urban areas is misconceived. Although the White Paper espouses the digital age as a means of transforming the planning system it entirely ignores its impact on future settlement patterns arising from on-line shopping and home working.
9 (a). No. At the moment the main opportunity for local communities to influence the appearance and content of development is at the outline planning application stage. Reserved matters are largely or wholly dealt with by officers. This proposal would disenfranchise local people from the planning process.
9 (b). No. These proposals create an environment even more favourable to developers than that which exists at present and is likely further to undermine the protection of the Green Belt which has already been compromised in East Herts.
9 (c). Yes. The current planning system is not equipped to accommodate major new settlements and other proposals in the White Paper would diminish that capability still further. Just as Development Corporations, with their own planning powers have enabled new settlements to be created in the past, treating such proposals as NSIPS may be the way forward in the future.
- No. Digitisation, provided LPA’s are funded to implement it, may speed up the process, but at the same time may exclude those in society who do not have access to such tools. LPA’s already have adequate incentives to grant planning permissions in a timely manner and, as set out in our introduction, permissions granted have exceeded completions over many years. Delegating more powers to officers would further exclude community involvement.
- No. The claim that digitisation will improve public participation is an assertion for which no supporting evidence has been provided. It may indeed do so if it supplements traditional means of communication, but if it replaces them it may diminish rather than enhance participation.
- No. The proposals here, as well as the alternatives, seem likely in practice to reduce public engagement still further. Even under the current system, the Inspector’s reasoning following an Examination in Public, is very superficial, and this contemplates removing altogether the obligation on Inspectors to justify their conclusions. East Herts Council already has an adopted plan, valid until 2033. To cancel it and start again in 42 months time would be a needless waste of effort and, worse still, give a green light to those who were unable to make a case that their land should be developed to have another go.
13 (a) and (b). Yes. Since it is proposed that other forms of community engagement should be diminished or removed, Neighbourhood Plans should be retained. Bishop’s Stortford has two of them covering the town. However, at present they rarely include anything that would upset a developer, and are largely disregarded in the current development control process. So if they are to be retained they need to be able to include and determine the things that really matter to local communities such as housing numbers and densities and building heights and appearance.
- Yes. See our introductory comments. Since market led development build out rates are determined by local market conditions, local authorities and housing associations should be given the powers and the funding to supplement market provision.
- All major developments in our area have been from standard developer pattern books with minimal space standards and tiny gardens. They disfigure the outskirts of all our local towns.
- All new housing should minimise energy consumption through better insulation, ending reliance on fossil fuel heating, and maximising the use of renewable energy. Since ours is one of the areas of highest housing demand and lowest rainfall, all new housing should build in grey water systems, so that drinking water is used only for human consumption and other uses, such as flushing toilets, use water recycled on site. There is no evidence that sustainability is at the heart of the White Paper proposals.
- Not sure. Not enough detail has been provided about either content or how they will be produced.
- Yes. This would appear to replicate the functions of the former Commission for Architecture and the Built Environment which the previous coalition Government abolished. The proposal that every authority should have a chief officer responsible for design and place making raises the question of where people with such talents are to be recruited from. Planning departments at the moment are not renowned for their aesthetic sensitivity.
- No. Beauty lies in the eye of the beholder, and is not the automatic product of pattern books, which led to the production of many slums as well as the Georgian terraces we enjoy today. As described here, this proposal seems to be simply another way of minimising the public scrutiny of development.
- More or better infrastructure.
- (a) – (d) If the current arrangements are replaced by a new type of levy, the threshold should be determined locally to reflect the wide variation in development values across the country. Similarly, the rate of the levy should be locally determined. It should be set so as to recover a higher contribution than at present. We have no view about local authority borrowing powers.
24 (a) – (d). These questions fall outside our area of expertise.
- Our local planning authority uses S106 agreements rather than the community infrastructure levy, so we have no experience of the direct question raised. However, we have been concerned that S106 payments raised on developments in Bishop’s Stortford have been spent elsewhere within the district and feel that such discretion is inappropriate.
- The obsession with digitisation displayed in this White Paper is likely to have an adverse impact on people with protected characteristics as defined in S149 of the Equalities Act 2010 – particularly age and disability.
- We would like to conclude with the point made in our introduction. The planning system has not impeded the supply of housing, is not broken, and does not need fixing. The Government would make better use of its energies if it were to address the real areas of market failure which we have highlighted in this response.