1st October 2020
Consultation Response Sent by Email From The Head Of Planning Policy and Economic Development.
Changes to the Current Planning System – Consultation on Changes to Planning Policy and Regulations
Thank you for your invitation to make a representation on Government’s consultation named ‘Changes to the Current Planning System – Consultation on Changes to Planning Policy and Regulations’ that has been open for consultation between 6 August 2020 and 1 October 2020.
The consultation seeks views on a range of proposed changes to the current planning system including:
- changes to the standard method for assessing local housing need;
- securing of First Homes through developer contributions;
- temporarily lifting the small sites threshold; and
- extending the current Permission in Principle to major development.
This letter refers to questions that have been posed within the consultation document and is the Council’s formal response to the proposed changes to the planning system.
Question 1: Do you agree that planning practice guidance should be amended to specify that the appropriate baseline for the standard method is whichever is the higher of the level of 0.5% of housing stock in each local authority area OR the latest household projections averaged over a 10-year period?
Question 2: In the stock element of baseline, do you agree that 0.5% of existing stock for the standard method is appropriate?
For the Wealden District the rural nature of our area means that this will simply not be a factor in setting out housing requirement.
It is noted that for 2019, 0.5% of the estimated housing stock only equated to 350 dwellings, which is far lower than any household projections for Wealden averaged over the next ten year period. For example, under the ‘standard method’ for 2020 (using the 2014 household growth projections), the ten year averaged household growth projections between 2020 and 2030 equated to 875 dwellings. Even when using the 2018 household growth projections, the ten year averaged household growth projections between 2020 and 2030 for Wealden equates to 602 dwellings.
This brings into question whether existing stock levels would ever be used as a baseline in the context of a predominately rural district in South East England and would not bring stability to the ‘standard method’ calculation as suggested in the accompanying text. Given the above, it is considered that the Council would still be heavily reliant on household projections setting the baseline moving forward.
It is noted that Question 2 asks whether using 0.5% of existing stock to set the baseline for the standard method is appropriate. As discussed above, at this level, the new stock level element proposed to be added to the ‘standard method’ is unlikely to impact the baseline calculation for Wealden District.
Question 3: Do you agree that using the workplace-based median house price to median earnings ratio from the most recent year for which data is available to adjust the standard method’s baseline is appropriate? If not, please explain why.
Yes, we would agree that the use of the most up-to-date information is appropriate.
To be clear, however, as will be clear from the rest of our response, we do not consider that proscribing housing targets based on affordability alone without reference to constraints to be appropriate in planning terms. Such an approach risks imposing growth in inappropriate locations, as opposed to making strategic planning decisions. This in turn risks ceding control of decisions at a local level, while developers choke off delivery to protect land values – creating a vicious circle that does little to support true sustainable development.
Question 4: Do you agree that incorporating an adjustment for the change of affordability over 10 years in a positive way to look at whether affordability has improved?
It is noted that a high number of local authorities in South East England have had continuing worsening trends in affordability over the past ten years (that includes all local authorities in East Sussex) with Wealden District being no exception. It is agreed that incorporating an absolute adjustment for affordability is helpful in identifying where the demand for new housing is greatest and that using the workplace-based median house price to median earnings ratio for the most recent year is a straightforward method for achieving this.
However, given that affordability has worsened for all local authorities within East Sussex (and in many other parts of South East England) over the past 10 years, it is considered that this further addition to the ‘standard method’ calculation will disproportionally impact local authorities in South East England where affordability issues are often most acute. In addition, given that trends in affordability do not radically change when crossing over local authority boundaries, it is considered that individual improvements to housing land supply in some local authority areas may not lead to improvements in affordability in the overall area, particularly if neighbouring local authorities are severely constrained or unable to provide the necessary housing to meet their full housing requirements.
Stepping back from this question, we feel that it is important to highlight that any variant of the adjustment to this formula is simply not addressing the key issue around why housing is not affordable in the South East – ever inflated land values. In Wealden, a rural district with modest market towns, we currently have over 6000 homes granted planning permission. Whether this will be enough to satisfy any new requirement figure is moot if developers are not willing to build at that rate. Under our current system, rapid build out rates only reduce developer profitability and not, regrettably see land values reduce. Simply granting ever more homes planning permission does not ensure that house prices become more affordable, or indeed that more homes get built.
Question 5: Do you agree that affordability is given an appropriate weighting within the standard method?
As discussed above, it is agreed that incorporating an adjustment for affordability is helpful in identifying where the demand for new housing is greatest and where new homes should be provided, if it is possible to do so. However, the Government’s proposal to also include a second component to the affordability adjustment that focuses on the absolute difference between the latest affordability ratio and the affordability ratio 10 years ago is not considered necessary and as discussed above, may not reflect improvements in housing land supply for individual local authorities. The increasing emphasis on affordability within the ‘standard method’ calculation will disproportionally impact South East England, where housing requirements have already increased dramatically since the current ‘standard method’ calculation was introduced in 2018.
In this vein, the Government’s ‘levelling-up agenda’, which aims to ensure that local authority areas in both the Midlands and North of England become more prosperous and to reduce regional inequalities, is considered to be at odds with this approach to the ‘standard methodology’ that will continue to deliver the majority of new homes in South East England. The approach to the ‘standard method’ would build upon existing trends in terms of affordability/household projections and provide the majority of new homes in London and the South East. This will also ensure that jobs and supporting infrastructure will similarly be delivered in the South East, rather than other regions and is not considered to assist the ‘levelling-up agenda’.
Questions 6, 7 & 12 – Transitional arrangements
We agree that transition arrangements should be put in place for authorities at an advanced stage of their plan preparation.
Question 8: The Government is proposing policy compliant planning applications will deliver a minimum of 25% of onsite affordable housing as First Homes, and a minimum of 25% of offsite contributions towards First Homes where appropriate. Which do you think is the most appropriate option for the remaining 75% of affordable housing secured through developer contributions? Please provide reasons and / or evidence for your views (if possible):
The Council’s current affordable housing policy was adopted in 2016 in its Affordable Housing Delivery Local Plan (May, 2016) and provides a proposed tenure mix for different sizes of development as described below:
- Development sites of 49 dwellings (net) or less that around 80% of the total number of affordable homes provided will be social rented accommodation with the remainder being for intermediate accommodation;
- Development sites of 50 dwellings (net) or more around 40% of the total number of affordable provided will be for social rented accommodation, 40% will be affordable rent and 20% intermediate accommodation.
In this context, the intermediate accommodation was defined as homes for sale and rent provided at a cost above social rent, but below market levels, so the Council’s existing policy could be adapted to remove this intermediate accommodation element and include First Homes for a minimum of 25%, without significantly impacting the existing affordable housing policy.
In terms of the remaining 75%, the Council has recently commissioned a housing needs assessment that will consider all affordable housing products as listed in Annex 2 of the National Planning Policy Framework (NPPF) for its new Local Plan, as well as considering its current overall affordable housing requirement. The existing policy does have flexibility to account for the financial viability of sites and to alter the tenure mix where this is needed. If a minimum of 25% of onsite First Homes (or offsite contributions) is required through national planning policy, then it is considered appropriate that individual Councils should be allowed to assess what the appropriate tenure mix for the remaining proportion of affordable homes (including the delivery of rental tenures) should be. It is considered that this would benefit both the residents of the District who would have access to affordable homes they require and also developers in terms of flexibility for the financial viability of new housing sites.
Question 9, 10 & 11 – Exemptions from the requirement for affordable home ownership products
The Council consider that the existing exemptions are suitable.
Question 13: Do you agree with the proposed approach to different levels of discount?
It is noted that the minimum discount for First Homes should be 30% lower than market price which will be set by an independent registered valuer. It then states that local authorities will have the discretion to increase the discount to 40% or 50% and that this would need to be evidenced in the Local Plan process. The Council has noted in its previous Strategic Housing Market Assessment (SHMA) in 2016 that the affordability of housing within the District is a significant issue for many and therefore the discretion to increase the discount on First Homes (subject to viability) is supported.
It would be considered helpful in this context for the Government to confirm in its planning practice guidance, the broad requirements for the evidence needed to support an increased discount for First Homes as part of the plan-making process.
Question 14: Do you agree with the approach of allowing a small proportion of market housing on First Homes exception sites, in order to ensure site viability?
It is agreed that the existing approach taken in paragraph 77 of the NPPF towards rural exception sites could apply to First Homes exception sites also. It is noted that First Homes would continue to be discounted below market prices in perpetuity so would continue to provide affordable homes for local people in the future. It is recognised in some cases that the delivery of affordable home only schemes can be challenging in terms of financial viability and that a small proportion of market housing may be needed to ensure the viability of such sites.
However, it is clear that this issue will vary on a site by site basis, so the Council considers that it may be helpful to define what maximum percentage of market homes is required for First Homes exception site schemes, to ensure that schemes submitted to local authorities are fit for purpose and do not lead to a significant proportion of market housing in rural areas that would not otherwise be acceptable.
Question 15: Do you agree with the removal of the site size threshold set out in the National Planning Policy Framework?
It is noted that the Government intends to remove the NPPF threshold on the size that currently applies to entry-level exceptions sites in footnote 33, but to retain the requirement that First Homes exception sites should be proportionate in size to the existing settlement. The removal of this threshold does allow for some interpretation in terms of what constitutes a proportionate First Homes exception site in relation to a nearby settlement and may vary substantially between authorities.
It is considered that an alternative resolution would be to continue to provide a site threshold proportionate to the settlement size but to confirm what percentage this would be in the guidance and that this can vary in exceptional circumstances.
Question 16: Do you agree that the First Homes exception sites policy should not apply in designated rural areas?
It is agreed that the First Homes exception sites policy should not apply in designated rural areas. In Wealden District, over 53% of the district is designated as being located within the High Weald Area of Outstanding Natural Beauty (AONB) and of course, in such areas, the scale and extent of development within these designated areas should be limited. Paragraph 172 of the NPPF states that planning permission should be refused for major development other than in exceptional circumstances, and where it can be demonstrated that the development is in the public interest.
It is considered that for towns/villages located in or surrounded by the High Weald AONB, the inclusion of the First Homes exception sites policy would not be appropriate given that the site size threshold may be removed (as discussed above) and could lead potentially for ‘major development’ within nationally protected areas. The Government’s intention to protect the important role that rural exception sites play in delivering affordable homes in rural areas, with rural exception sites being retained as a vehicle for delivering affordable housing in designated rural areas is supported by the Council.
Question 17: Do you agree with the proposed approach to raise the small sites threshold for a time-limited period?
It is noted that the Government proposes to raise the small sites threshold to up to either 40 or 50 new homes through changes to national planning policy and is seeking views on the most appropriate level. This is to stimulate economic recovery with a particular focus on SMEs and to reduce the burden of developer contributions. In principle, this proposal is supported in the current economic climate and given the issues around the Covid-19 pandemic and economic impact this will have on small to medium size house builders on a temporary basis. As discussed below, in practice this may not have a significant impact for Wealden District in terms of delivering affordable housing, given that the majority of the Council’s housing land supply is from larger sites.
Question 18: What is appropriate level of small sites threshold?
Question 19: Do you agree with the proposed approach to the site size threshold?
As of the 1st April 2020, Wealden District Council had 6,575 (net) dwellings (large sites above 5 (net) dwellings) that had an extant planning permissions, are under construction or have a resolution to grant planning permission. It is noted that only 459 (net) dwellings out of this total above came from housing sites between 10 (net) dwellings to 50 (net) dwellings that equates to just under 7%, which largely falls in line with the Government’s research on this matter.
However, the consultation document has not touched on the opportunities that developers will have over this temporary period to resubmit planning applications for existing sites with extant planning permissions under the threshold without affordable housing. This may lead to further reductions in affordable housing than anticipated over the period. It is considered that the difference between a 40 and 50 dwelling threshold is negligible in the context of Wealden, but that higher thresholds of above 50 dwellings will mean that national house builders will be more likely to benefit from the proposal, which would not support the Government’s aims.
Question 20: Do you agree with linking the time-limited period to economic recovery and raising the threshold for an initial period of 18 months?
Question 21: Do you agree with the proposed approach to minimising threshold effects?
In principle, the initial period of 18 months seems appropriate and of course the Covid-19 pandemic may be with us for some time to come, but this is currently unknown given the nature of the issues at hand. Nonetheless, the Council would wish for the Government to monitor this situation closely and if the economy does improve back to previous levels, the temporary raising of the affordable housing threshold should be stopped. The importance of securing affordable housing for local residents in Wealden is a key issue for the Council and this issue should be reassessed at the earliest opportunity to ensure that affordable housing is delivered on smaller sites where it is possible to do so.
Question 22: Do you agree with the Government’s proposed approach to setting thresholds in rural areas?
It is recognised that in designated rural areas (i.e. the High Weald AONB), local planning authorities can set a lower threshold of five units or fewer in their plans and the Government will seek to maintain the current threshold in those areas. This is supported by the Council, as in the context of Wealden, the High Weald AONB has higher land/property values than the remainder of the district so is more likely to withstand the financial viability issues that other parts of the district may face.
Moreover, given the nature of the High Weald AONB, the granting of planning permission for housing schemes of above 50 (net) dwellings in this area is less frequent. Therefore, within the High Weald AONB, there is an increased reliance for the delivery of affordable housing on housing schemes between 5 and 50 (net) dwellings, which would be stopped for a temporary period if the proposed threshold was raised in designated rural areas also.
Question 23: Are there any other ways in which the Government can support SME builders to deliver new homes during the economic recovery period?
Where SMEs are still required to make provision for affordable homes (for example in designated rural areas), ensure that there are suitably funded registered providers (RP) willing to deliver modest numbers of affordable dwellings. SMEs often face significant delays sourcing an RP slowing the start of works and risking overall delivery.
Questions 24 – 28: Changes to the PiP regime?
We can confirm that the Permission in Principle (PiP) application process has had limited use within Wealden District so far. The Government proposes to remove the restriction in the current PiP regulations on major development. It is envisaged that a change of this kind will particularly benefit small and medium-sized developers who tend to focus on building smaller major development.
The process as it currently stands, only provides the opportunity to undertake a very limited assessment up front and is supposed to cover issues such as location, uses and the amount of development proposed. The second ‘technical details consent’ stage covers almost everything else, including drainage, vehicular access, design and layout, affordable housing contributions and Section 106 Planning Obligation. It is noted that for major development schemes, these issues as they emerge may make some sites undeliverable at that stage. Given those uncertainties, it is questioned whether developers/landowners would use this method instead of an outline planning application process that is regularly submitted to Wealden District Council for medium to large scale housing schemes. These outline planning applications have the benefit of providing certainty to the applicant in terms access, layout, drainage etc. before going to the reserved matters stage to consider the detailed design of the scheme.
It is considered that if the PiP application process was expanded to include major development schemes, then this process would need to be longer and consider some site deliverability issues (such as access, highways, layout) for the site to provide certainty to the applicant. This would however have a knock on effect in terms of the speed of decision making and cost to the local planning authority, but these ‘site deliverability’ issues would still need to be considered at the ‘technical details consent’ stage. It is uncertain what the value of a PiP is for a major housing development scheme to a developer, if such fundamental issues are not considered at this earlier stage.
Question 29: Do you agree with our proposal for a banded fee structure based on a flat fee per hectarage, with a maximum fee cap?
Question 30: What level of flat fee do you consider appropriate, and why?
It is noted that the Government are keen to promote PiP by application as a more streamlined and cheaper alternative to outline planning permissions. The Council is aware that the process currently includes the 5-week determination period and a 14-day period for consultation with the public and statutory consultees, so would still include a number of the same administrative tasks that are required for outline planning permission, but in a shorter time period. It is considered, notwithstanding the issues raised above, that the assessment of the PiP would be shorter than for an outline planning permission, but those site deliverability issues would instead be moved to the next phase of the assessment (i.e. the ‘technical details consent’ stage).
Given the above, it is considered that a lower fee structure for the initial PiP, when compared to an outline planning permission, could be introduced as proposed by Government, but that the ‘technical details consent’ stage should then reflect, in terms of fees, the necessary assessment at that stage, given that only limited assessment is made for the initial PiP. It is considered that both the outline planning permission/reserved matters process and the PiP/technical details consent process are similar in nature, albeit with different emphasis in terms of assessment at each stage, so the overall cost for the entire process should be similar given the comparable level of assessment required overall.
It should be noted that planning services within local authorities are reliant on planning application fees to resource those departments. An overall reduction in fees could cause harm to such processes. At a time when local authorities are facing increasing expenditure, including dealing with the impact of the Covid-19 pandemic, it is not known whether the loss of any fees could be recovered. We would urge the Government to give this issue very careful consideration when assessing the level of fees needed for each process. Under resourced planning departments will not help drive this agenda forward nor other changes envisaged for the planning system.
Question 32: What guidance would help support applicants and local planning authorities to make decisions about Permission in Principle? Where possible, please set out any areas of guidance you consider are currently lacking and would assist stakeholders.
In terms of guidance for the PiP process, notwithstanding the issues highlighted in the Council’s response to question 24 of the consultation, it is considered that the ‘in principle’ issues should be made clear within the guidance. The current Planning Practice Guidance (PPG) confirms the following:
‘The scope of permission in principle is limited to location, land use and amount of development. Issues relevant to these ‘in principle’ matters should be considered at the permission in principle stage. Other matters should be considered at the technical details consent stage.’
As discussed above, there are currently uncertainties in terms what is an ‘in principle’ matter, given that even some detailed issues such as access, drainage, impact on landscape/biodiversity or affordable housing contributions can be ‘showstoppers’ for such schemes and can be seen as ‘in principle’ issues that should be considered at early stage in the development process. In terms of guidance for PiPs, this should be expanded to cover the possible ‘in principle’ issues at this early stage to make the process clearer for both applicants and the local planning authority. This would also assist stakeholders (particularly those who are non-planning professionals) to direct them as to what can be considered at this earlier stage.
I trust that the above comments are helpful at this stage. If you have any further queries, then please do not hesitate to contact us.
Head of Policy and Economic Development