Seventh Report - Reforms to national planning policy

National planning policy has been characterised by stop-start reform over several years. This has regrettably resulted in uncertainty among local authorities and across the planning sector. Contrary to the Government’s objective of facilitating plan- making, the short-term effect of its announcement of proposed planning reforms (6 December 2022) has been to halt the progress of local plans in a number of local authority areas.

The Government must see the merit in pausing plans for further reform, in order to allow for a period of stability in which reforms already introduced can be properly implemented, and any lessons from that implementation learned.

The Government has not been clear on the timetable for its many planning consultations and when its reforms will be implemented. Nor has the Government sufficiently evaluated the impact of its past NPPF changes to inform its current reform proposals. There is a strong case that the Department should conduct impact assessments of past NPPF changes, which would inform future reform proposals. Given that the Department is currently considering 26,000 responses to the December 2022 consultation, and is conducting at least nine further consultations on planning reform, we do not believe resource constraints should prevent the Department from conducting these impact assessments.

The Government should urgently conduct and publish impact assessments on all future NPPF changes. It should take a more strategic approach to future consultations, including publishing timelines for the implementation of its proposed reforms. (Paragraph 22) The national housing target

We support the principle of a plan-led system and are sympathetic to the Government’s wish to ensure more local authorities have up-to-date local plans. However, it is difficult to see how the Government will achieve its 300,000 net national housing target by the mid-2020s if local targets are only advisory. The Government has not provided sufficient evidence to demonstrate how the policy of removing mandatory local housing targets will directly lead to more housebuilding.

We are sceptical of the Minister for Housing and Planning’s confidence that greater local plan coverage will result in more housebuilding. If there is no longer a requirement for up-to-date local plans to continually demonstrate a five-year housing land supply, and if housing targets in local plans are to be made advisory, then it does not necessarily follow that more local plan coverage will result in the same increases in housebuilding as under the current NPPF.

In line with its previous commitment to us, the Government must publish its own comprehensive analysis, as part of its response to the December 2022 consultation, to demonstrate how the proposed changes to the NPPF will facilitate delivering 300,000 Reforms to national planning policy 37 net new homes per year, including the evidence base for each of those proposed changes. The response to the December 2022 consultation containing this analysis should be produced by the end of September 2023; it was originally expected in spring 2023. If there are further delays, the Minister for Housing and Planning should write to us to explain why.

In order to aid transparency and accountability for housing delivery, the Department must set and commit to annual housing targets that are in line with the Government’s commitment to deliver 300,000 net new homes per year by the mid-2020s and how this will be achieved.

If the NPPF reforms, once they have been implemented, do result in a reduction in housebuilding, the Minister for Housing and Planning should write to us as soon as this becomes apparent, and should explain whether the Government intends to keep the national housing target by making further NPPF revisions, or maintain its policy of advisory local targets at the expense of building 300,000 net new homes per year, or take other action in response.

We reiterate our previous recommendation from our report on the future of the planning system in England (2021) that the Government should set out the proportions of different types of tenure that will make up the 300,000 net new homes per year, in order to encourage local planning authorities to give greater importance in planning for Social Rent homes. We believe that this should include a national housing target for 90,000 Social Rent homes per year.

The development of brownfield sites should be prioritised and incentivised, and green spaces in the Green Belt should be protected. However, brownfield sites alone cannot deliver 300,000 net new homes per year in the long-term. In particular, the greater upfront cost of brownfield development means there is less capacity to deliver affordable housing on these sites.

We reaffirm our previous recommendation from our report on the future of the planning system in England (2021) that a national review of the purpose of the Green Belt should assess the circumstances where brownfield sites within the Green Belt should be considered for development. Local Green Belt boundary reviews should continue to be conducted by local authorities as part of their local plan-making process. (Paragraph 46) Calculating local housing need

The need for the urban uplift demonstrates that the standard method formula is not currently fit for purpose. The 35% urban uplift is an arbitrary figure, which is not calculated based on local housing need in the areas where it applies. We are disappointed that the Government has not yet published its evidence base for the urban uplift.

The Government should abolish the urban uplift when it reviews the standard method in 2024. Instead, a single standard method formula that accounts for local housing need and capacity should apply to all local authorities. The revised formula should be based on future local need, with a focus on regenerating local areas and delivering 38 Reforms to national planning policy more affordable housing, rather than focussing housebuilding in areas where economic activity is already high. The standard method must work towards delivering net 300,000 new homes per year in England.

The Government plans to abolish the Duty to Cooperate without clearly setting out what it will be replaced with. This is despite the Government having agreed with our recommendation in a previous report that the Duty to Cooperate should not be abolished without a clear understanding of how it will be replaced with a new mechanism. By abolishing the Duty to Cooperate, the Government is removing another incentive for local authorities to meet their local housing need. The Government should instead be encouraging neighbouring local authorities to cooperate on housing delivery, particularly when planning development on their shared borders.

The Government should ensure that the new alignment policy requires local authorities to work together on housing delivery, or introduce other mechanisms to encourage regional cooperation between local authorities on housing delivery. The detail of the new alignment policy must be defined, consulted on, and a final policy published, before the Duty to Cooperate is abolished. The Government should therefore delay abolishing the Duty to Cooperate until its future review of the NPPF, in order to ensure that there is no gap between the abolition of the Duty to Cooperate and the implementation of the new alignment policy. (Paragraph 68) Local planning authority resourcing

There continues to be a pressing need for additional resources for local planning authorities to ensure the efficient working of the planning system and to implement the Government’s proposed reforms. The Government must ensure local planning authorities have the specialist skills required to implement proposed reforms. The programme of support offered by the Department—including the measures outlined in correspondence from the Minister for Housing and Planning, and the letter from the Chief Planner to local authorities—does not constitute a comprehensive resources and skills strategy for the planning sector. This does not match the scale of the resourcing challenge which local planning authorities currently face.

The Government should publish a comprehensive resources and skills strategy for the planning sector, in line with its commitment to us. The strategy should clearly explain how the resourcing and skill needs of local planning authorities will be met; and should be published before future reforms to national planning policy are implemented. (Paragraph 80) Infrastructure Levy

We share our predecessor Committee’s view that when considering new mechanisms for land value capture it is vital that the Government learns the right lessons from the past. If the Government is determined to implement the new Infrastructure Reforms to national planning policy 39 Levy over the course of ten years, then its approach should have support from a broad consensus of political parties from across the House. This will enable it to be successfully implemented and retained for the long-term.

It is not clear that the new Infrastructure Levy (IL) as it is currently proposed will be swifter and simpler for local authorities to administer than the current CIL/Section 106 agreement regime. The potential for multidimensional charging schedules with many different rates in each local authority, as well as the continued need to negotiate Section 106 agreements in parallel, unnecessarily risk making the new IL more complicated than the current system.

Whilst piloting the new IL is a sensible approach, the Government must outline from the outset exactly how the ‘test and learn’ process will work and set out a limited timeline. The Government should make adjustments where appropriate as part of ‘test and learn’, to ensure that the new regime is simpler, delivers sufficient funding across the country, and delivers more affordable housing than the current regime.

We welcome that the Government has tabled amendments to the Levelling-up and Regeneration Bill to strengthen the duty of local authorities to deliver at least as many affordable homes under the new IL as they do under the current system (rather than simply “have regard” for this). However, the proposed amendments will not guarantee that local authorities will deliver the same levels of affordable housing as they do under the current regime. The amendments would require local authorities to “seek to ensure” they deliver the same levels of affordable housing, but not if this would render development economically unviable. Therefore, there is still a risk that the new IL may not deliver as many affordable homes as the current regime.

If the new IL falls short of delivering sufficient funding for local authorities to deliver at least as many affordable homes as the current regime, then the Government should make adjustments where appropriate as part of ‘test and learn’. Failing this, the Government should consider other ways of providing funding to local authorities to make up the shortfall. (Paragraph 102) National Development Management Policies

It is regrettable that the Government has still not provided sufficient detail on the content of National Development Management Policies (NDMPs) for stakeholders to fully understand the impact they will have on the planning system. While NDMPs may make the plan-making process more efficient for local authorities, they will also result in local plans being overridden by national policy in some cases. This is contrary to the Government’s stated commitment to a plan-led system. Under the current wording of the Levelling-up and Regeneration Bill, the Secretary of State for Levelling Up, Housing and Communities will be able to override local plans unilaterally, potentially with no parliamentary oversight.

Each draft NDMP should be subject to full and proper parliamentary scrutiny before coming into force. Any draft NDMP which would have the effect of superseding the plan-led system should be carefully considered in Parliament on a case-by-case basis. 40 Reforms to national planning policy The Government should table an amendment to the Levelling-up and Regeneration Bill to make NDMPs subject to similar parliamentary requirements as National Policy Statements, as outlined in section 9 of the Planning Act 2008. (Paragraph 116) Reforms to national planning policy 41