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The Government’s requirement for authorities to demonstrate a five year housing land supply and the resultant presumption in favour of sustainable development has been a hot topic of debate, and large contributor to the delivery of homes since the National Planning Policy Framework (NPPF) was published in 2012. Proposed changes to this requirement are therefore a key consideration for whether the draft NPPF will be successful in boosting or stifling the delivery of new homes.
The Housing White Paper (HWP) raised the Government’s focus on the actual delivery of new homes and not just on future supply. Those proposals are retained in the draft NPPF and will effectively create two triggers for the presumption in favour of sustainable development:
Whilst we agree that there must be a focus on seeing the delivery of new homes on the ground, our concern is that the bar has been set far too low and the draft NPPF runs the risk of setting a benchmark for delivery that falls well below its aspirations.
The headline figure under draft NPPF (paragraph 75 with its accompanying footnote 30) sets a requirement for authority’s to delivery at least 75% of its housing requirement over the previous three years before the presumption in favour of sustainable development will be triggered.
However, when one looks further at Annex 1 (paragraph 211), the delivery test is actually proposed to rise from an initial very low base of only 25% delivery of an authority’s housing requiring in the three years preceding November 2018; and 45% in November 2019, before settling and continuing at 75% from November 2020.
This settled level is higher than the previous figure of 65 % muted in the Housing White Paper and so is a welcome improvement, but this does not go far enough. The concern here is that the Government is proposing to set a very low bar. The need to phase in its introduction is appreciated; however, initially setting the bar at 25% will not encourage housing delivery in the short term. Even by November 2020, the threshold rising to 75% will not go far enough to boost delivery. The Government’s ambition should be much higher as there is a danger that 75% delivery will become the benchmark for local authorities to achieve. The ambition should be delivering no less than the full housing needs in a particular area.
The Housing Delivery Test also sets out additional requirements and measures. From November this year, if an authority has only delivered 95% of its required housing, it will need to publish an action plan to understand and address its delivery record. Further guidance on the publication and content of an action plan is set out in the draft Planning Practice Guidance (PPG). The Action Plan has the potential to be a useful tool if it then leads to the implementation of a series of positive measures to address the reasons for past under-delivery but, we are concerned that there is discretion on the need to consult on the action plan and so there is potential for actions to be displaced from those the development industry actually considers are necessary to unlock delivery and boost supply.
Where greater levels of under-delivery occur (the delivery of only 85% of an authority’s housing requirement from November this year), a 20% buffer on a council’s five year supply requirement will be applied. However, many authorities will already have a 20% buffer in place, so this will do little more to boost the delivery of more homes. We do however welcome the clarity the draft NPPF provides on when a 20% buffer will be applied.
The Government proposes to give local authorities the option to have their housing land supply agreed on an annual basis, and fixed for a one-year period. This essentially replicates the existing system in Wales.
Where authorities seek agreement on their supply, the Government proposes that a 10% buffer on the supply should be provided for. Additional guidance in the accompanying draft PPG appears to confirm that this would be an additional buffer for those authorities who would currently apply only a 5% buffer and, for those authorities who have a record of under delivery (based on the delivery test), a 20% buffer must continue to be applied.
Whilst agreeing supply on an annual basis will provide greater certainty, there needs to be detailed and robust scrutiny of supply. Our experience is that an authority’s supply figure is often only properly tested at S78 appeals and there is little scrutiny in other forums, including Local Plan Examinations. There is a danger that an authority’s supply figure will be subject to very light-touch testing and will then be immune from challenge for the next year. This may delay investment decisions on sites which have the potential to provide additional sustainable growth, and close off the supply of sites allow at appeal, which has been a significant contributor to supply in many local authorities. It is imperative that steps are put in place to ensure proper scrutiny is given to a Council’s claimed supply if this measure is confirmed.
The Government has largely delivered on a previous HWP promise to provide more guidance on how five year land supply should be calculated.
In terms of the starting point, the Government is moving forward with its standardised methodology.
The delivery test will now set the benchmark for when a 20% buffer must be applied with the draft NPPG removing reference to the term ‘persistent under delivery’. This will remove the considerable debate on whether 5% or 20% buffer should be applied, a debate which can be fundamental to many authorities’ ability to demonstrate a sufficient housing supply. However, whilst this measure will create certainty, there is the potential that it will stifle supply – for example, where an authority has significantly under delivered in the past but has managed to just achieve the 85% delivery test requirement in the past 3-years, only a 5% or 10% will need to be applied*. This example is hardly a good record of delivery, and such a record would normally result in a 20% buffer being applied under the current NPPF.
The draft PPG now makes clear that the buffer must be applied to any shortfall in delivery as well as to the initial housing requirements – this confirmation is welcomed and, whilst still in draft, should send a clear message to local authorities on the correct approach.
Some additional clarity has been provided on whether any shortfalls in delivery should be made up for in the five year period or whether those shortfalls can be spread over the remaining plan period (methodologies commonly known as ‘Sedgefield’ and ‘Liverpool’). The PPG confirm that authorities should make up shortfalls in the first five years (Sedgefield) but the latter (Liverpool) method is capable of being applied if established through a plan examination. If confirmed through a plan examination then our view is that it will be difficult to challenge this approach at appeal.
The draft NPPF glossary includes a new definition of ‘deliverable’ which is crucial when considering what sites can count towards an authority’s five year supply. Of interest, the updated definition confirm that site with outline planning permission, permission in principle, allocated in the development plan or identified on a brownfield register should only be considered deliverable where there is clear evidence that housing completions will be begin on site within five years.
This is not reflective of the findings in the recent St Modwen Court of Appeal judgement** that confirmed a more lenient approach of showing that such sites were merely capable of delivery in the five year period. This is welcome recognition by the Government that, just because a site has outline planning permission or is identified in a development plan, it can still take a considerable time for such sites to actually deliver new homes.
By placing the onus back on authorities to provide clear evidence that such sites will deliver housing in the five year period may impede some local authorities’ ability to demonstrate a five year supply in the short term, however, once bedded in, it will ensure a far greater prospect of sites that are being claimed to be deliverable in the five year period, actually seeing delivery of new homes on the ground in that period.
*A 10% buffer will be required if the authority choses to ‘confirm’ its supply through an annual position statement
**St Modwen vs Secretary of State [2017] EWCA Civ 1643
For further information about any issues raised in this article please contact Jeff Richards or Jonathan Dodd.
Further Turley commentary on the draft revised NPPF is available here.
18 March 2018
12 March 2018
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