Contact: Sue Clark, ext 5890 email: [email protected]

1. Summary

1.1 The consultation paper "Planning for Housing Provision" sets out a new proposed approach for delivering a better supply of housing through the planning system. The report sets out the key changes proposed and comments on the proposed approach. An extract from the consultation paper summarising the proposed approach is included as Appendix 1 and the proposed response to the Consultation Paper forms Appendix 2. The Executive Member for Environment: North Hampshire and Spatial Strategy is asked to agreed the proposed response.

2. Introduction

2.1 The consultation paper "Planning for Housing Provision" can be viewed on the Office of the Deputy Prime Minister's web site at http://www.odpm.gov.uk/stellent/groups/odpm_planning/documents/page/odpm_plan_039132.pdf. It was published on 18 July and sets out Government's objectives for delivering a better supply of housing through the planning system. It proposes a new policy approach to making the planning system more responsive to the housing market. The aim is to ensure that plans and plan policies will deliver land in the right places to meet the need for housing, do this in a way which takes better account of the housing market and is more responsive to changing circumstances.

2.2 This consultation paper discusses how planning delivers housing at the local level and the new mechanisms involved. It does not address issues concerned with the overall level of housing growth and how it is determined. The aim of the consultation is to establish whether the proposed policy approach provides a good basis on which to plan for delivering land for housing. The responses to this consultation paper will influence the content of the draft new "Planning Policy Statement on Planning for Housing" (PPS3) which the Government intends to publish in the autumn. Responses are invited by 9 September 2005. The consultation period is very short, particularly as it is over the summer holiday period; this is not satisfactory for such an important document. A request was made for the deadline to be extended to 13 September, but the response from the ODPM states `that they can only guarantee that written responses that reach them by 9 September will be formally accepted'.

2.3 Current policy on planning for housing does not require authorities to take account of the housing market. Land supply at the local level is not responsive to changes in market conditions and the monitoring of housing policies focuses on delivering targets, rather than considering wider impacts.

3. The Barker Review

3.1 The Barker Review recommended the use of market signals to trigger the release of buffer land. This recommendation had two principal objectives:

(i) to provide sufficient land in plans to improve the delivery of planned housing numbers; and

(ii) to ensure plans take account of changes in the market and are able to respond when appropriate.

3.2 The Government has considered a range of options for improving the responsiveness of the planning system to the housing market following the Barker Review. It considers that doing nothing is not an option because, in its view, many plans have not taken sufficient account of housing market changes and in some areas have failed to deliver planned housing provision.

4. The Proposed Approach

4.1 The consultation paper includes a summary of the proposed approach, this is attached as Appendix 1. The primary objective of the proposed approach is that land is allocated in plans to ensure a level of housing supply that better meets the need for housing, responds more effectively to changes in demand and promotes consumer choice. The proposed key changes are in three main areas:

(i) planning for housing market areas;

(ii) identifying land; and

(iii) monitoring and managing land supply

Planning for Housing Market Areas

4.2 Currently, regions (eg SEERA) distribute housing provision to local authorities and must take account of household projections, the capacity of each district and other constraints. It is proposed that regions continue to distribute housing provision but use sub regional housing markets (eg South Hampshire, North Hampshire, Blackwater Valley) as a basis for allocating housing numbers as well as other factors. The sub regional housing market areas will not follow local authority boundaries and some local authorities will be part of more than one housing market area; it should be noted that the housing market areas are not the same as the sub regions in the South East Plan. Local authorities would be expected to work together on joint local housing assessments and on assessments of housing land availability. They would also be expected to work together to monitor and manage the implementation of their policies. It is proposed to tailor the approach to the circumstances of different markets. So for example in Hampshire it is likely the housing markets would be identified for managed growth or high levels of new homes and the local authorities would be expected to meet or exceed their housing requirement. In housing markets identified for low growth or a managed reduction due to low housing demand, local authorities would be expected to treat the housing target as a ceiling.

Identifying Land

4.3 Currently, local authorities plan for 10 years of housing supply, at least five years of which should be allocated on the proposals map. Allocated sites plus windfalls are expected to ensure the housing requirement is delivered. It is proposed to extend the plan horizon to 15 years and the housing requirement for the first five years should be both allocated and developable. Land will be identified through housing land availability assessments in partnership with stakeholders. It is proposed to have less reliance on windfall sites in areas where it is possible to allocate land.

Monitoring and Managing Land Supply

4.4 Currently, local authorities are encouraged to phase land for housing development, but many local authorities do not actively manage their supply. It is proposed that the five year supply should be rolled forward as land is developed, in line with plans. Local authorities would be required to bring forward land from their future allocation to ensure the supply of developable land is maintained, they should also regularly discuss with house builders when they anticipate making applications, the date of completions, etc.

5. Comments on the Proposed Approach

5.1 In recent years there has been good progress in making better use of land for housing and in particular in providing more housing on brownfield sites; this progress is likely to be undermined by the market led approach proposed in the consultation paper. If implemented, the proposals would have significant impact on the countryside around many towns and villages in Hampshire.

5.2 Many organisations are very concerned about the proposed approach. For instance the Campaign for the Protection of Rural England (CPRE) states:

"The approach set out in the Government's consultation paper suggests a return to predict and provide, except in this case market demand, rather than projected household growth, would determine when, where and how many houses are built. This would be environmentally disastrous. CPRE believes land should be allocated for housing on the basis of local need, not market demand."

5.3 Hampshire County Council should acknowledge that it is important that local planning authorities provide enough land in plans to deliver sufficient housing for the population of their area. However the proposed approach raises significant concerns:

(i) If housing provision is to be planned on a sub regional basis, then the boundaries of the sub regions should take into account other factors as well as housing market areas, as housing provision needs to be integrated with planning for regeneration, employment, transport and other infrastructure.

(ii) Market information is of relevance, but should not be used as the sole determinant of housing allocations as proposed by the Government's consultation document. Sustainable development involves taking account of the environmental and social impacts of development as well as market signals. The monitoring of house prices has limited value as price is influenced by many factors, supply has only a small impact on house prices in the South East. The rate of house price increase accelerates or slows in response to a variety of factors such as the buoyancy of the national economy, mortgage rates, etc even when land supply remains steady.

(iii) Once sites are allocated as part of the five year supply, developers will be able to bring forward the land at any time regardless of whether it is brownfield or greenfield land. This is likely to result in increased development on greenfield sites as these are likely to be more attractive to developers than brownfield sites. In Hampshire, if a five year supply of land is allocated, there will actually be a 10 year supply available to developers as 50% of all completions in Hampshire in recent years have been on small sites (which are not allocated) or on brownfield windfall sites (21% completions on small sites, 29% completions on brownfield windfall sites). The proposals would lead to an over supply of land compared to housing requirements identified in regional planning guidance, housing requirements would be exceeded by a significant amount and the proportion of house building on brownfield sites will fall significantly. The target of 60% development on brownfield sites may not be met if the proposals are implemented as urban brownfield sites in the South East are often not able to be developed immediately as it takes time for a site to be released by a Government department or for a business to relocate and therefore most of these sites could not be included in the first five years supply. If the proposed approach is implemented there should be more incentive to develop brownfield sites and all areas, not just metropolitan areas, should be able to include a realistic windfall allowance as part of the five year supply. Planning for infrastructure provision will be much more difficult if it is not known how many dwellings are likely to be built during the plan period.

(iv) The best way to help those in genuine housing need is to put more investment into affordable houses. In order to have any significant impact on the price of housing in the South East, a huge number of additional new houses would have to be built; this would have a significant adverse environmental impact.

(v) Joint working with other local authorities will only succeed if there is some incentive for them to do so or if the authorities choose to work together. (See response in Appendix 2 for example of Partnership for Urban South Hampshire (PUSH) authorities working together on a sub regional basis.) Data will not be consistent across all authorities in a region or sub region unless a single organisation is responsible for undertaking or coordinating the work.

(vi) The proposed approach will increase the burden on local planning authorities and regional planning bodies; there will be additional work and costs in order provide evidence on a housing market area basis, rather than a district basis and in maintaining a five year rolling land supply.

(vii) It is agreed that local authorities should undertake discussions with house builders but it should be noted that house builders are unlikely to be any more accurate than many local authorities about when housing supply will result in completions. Hampshire County Council has been working with the House Builders Federation and asking builders about the completions they expect to achieve for several years. Experience demonstrates that builders are frequently over optimistic about how soon they will be submitting a planning application, how soon they will be able to start on site and how quickly they can deliver housing on their own sites, whilst at the same time being collectively sceptical about whether the forecast total house building will be achieved.

(viii) One of the key impediments to bringing development forward in a timely fashion is lack of infrastructure. The Institute for Public Policy Research's Commission on Sustainable Development in the South East states, in its final report, "sustainable development requires new investment in the region's infrastructure - particularly in its transport, affordable housing and flood defences". If these proposals are to be implemented the effects would be greatest in the South East where pressures on resources and infrastructure are most acute. Changes should not be implemented in advance of issues relating to infrastructure provision being resolved.

(ix) Nearly four years ago, when publishing the Planning Green Paper, the Government stated that it would be undertaking an urgent review of the system of planning obligations in order to simplify the way contributions can be collected. However, nothing substantive has been forthcoming. The expectation that `planning gain' will meet affordable housing needs means that the provision of other services, such as transport improvements, libraries and schools, is likely to be called into question.

5.4 The consultation includes a form for making a response and this sets out the questions on which the ODPM would like a response. Hampshire County Council's proposed response to these questions is set out in Appendix 2.

6. Impact Assessments

6.1 The response to the consultation may influence Government guidance relating to planning for housing provision. The response raises concerns about the likelihood of increased development on greenfield land if the proposed approach is implemented.

Recommendation

That the Office of the Deputy Prime Minister be informed that the response set out in Appendix 2 is the County Council's response to the Consultation Paper "Planning for Housing Provision".

481Rpt/SC

APPENDIX 1

EXTRACT FROM ODPM CONSULTATION PAPER `PLANNING FOR HOUSING PROVISION'

SUMMARY OF PROPOSED POLICY APPROACH

1. Planning for housing markets

Determining regional housing provision

The Regional Spatial Strategy will establish the overall level of new housing provision needed in the region. Government will set out later in the year further details of the way in which Regional Spatial Strategies should better take account of housing need and housing market pressures in the region to improve affordability in responding to Kate Barker's proposed affordability goals.

Establishing the distribution of new homes across the region

The Regional Spatial Strategy will also set out the distribution of the new housing provision needed in each sub-regional housing market area. That distribution will be based on robust analysis of the housing market in the sub-region, housing land availability assessments, conducted in partnership with stakeholders, and a sustainability appraisal to take account of wider issues such as environmental or transport considerations. The Regional Spatial Strategy will therefore need to:

· Identify sub-regional housing markets, rather than simply looking at administrative boundaries.

· Decide whether sub-regional housing markets should be designated for high levels of new homes (for example, the Thames Gateway), for managed growth, for low levels of new homes, or for managed reductions in housing. This will need to take account of the local housing market and the level of demand, as well as wider environmental, social and economic considerations.

· Allocate housing numbers to sub-regional housing market areas and to local authorities within them.

The purpose of these proposed changes is to ensure that decisions about the level of new housing required in each area should be based on considerations of the housing market, rather than simply administrative boundaries, and that they should take proper account of affordability and market information about housing need, as well as wider social, economic and environmental considerations.

2. Identifying land for housing

Land supply at the local level

Local authorities, in their development plan documents, will allocate land to deliver housing for the first five years of their plan. They will also identify a further 10 years of land supply for future use.

Sites allocated in the first five years should offer the most sustainable option for development and be developable. Allocations need to take account of the Government's brownfield target, as well as the readiness of land to be developed. Land will be identified through housing land availability assessments, in partnership with stakeholders.

In areas designated for high levels of new homes, developers will be able to bring sites out of the five year land supply forward at any time. In managed and low growth/managed reduction areas local authorities will have the option to phase land release. Developable brownfield land in sustainable communities should be released first.

The purpose of this approach is to help ensure that new housing is delivered according to the plans. This is to address the current shortfall between plans and delivery which exists in some areas due to constraints on the supply of appropriate developable land.

3. Monitoring and managing land supply

Responding to changes in the housing market

Local authorities will monitor the development of land in their plans in the context of the housing market. If land from the five year supply is developed as expected local authorities will top up their five year supply steadily from their future allocation. Land identified in the later years of the plan will be brought forward as intended, with developable brownfield land in sustainable communities the priority.

If land is used up more quickly than expected, suggesting higher than expected levels of demand in the market, then:

· In areas designated for high levels of new homes local authorities will roll forward land from the future provision through a Supplementary Planning Document. At the same time a partial review of the RSS will be triggered, so that proper consideration can be given to the changing market circumstances. Housing numbers may need to be revised or the market area designation changed.

· In managed growth areas local authorities should continue to phase land release to manage the pace of development.

· If in a low growth/managed reduction area the rate of development is significantly higher than anticipated, a partial RSS review will be triggered, to determine whether housing numbers need to be revised or the market designation changed. If land is used up more slowly than expected, local authorities will investigate why land is not being developed.

· If it is because the land is in practice too difficult to develop, local authorities will need to take further measures to make it easier to develop, or allocate alternative land to ensure that plans are met.

· If it is because of a change in the housing markets, local authorities will need to consider whether this is as a result of long term market changes (as opposed to short term cyclical changes). If so a partial review of the RSS should be triggered as a result, so that the level of housing provision or the designation of the sub-regional market can be reconsidered.

The purpose of the proposed approach is to allow the planning system to be more responsive to the market while continuing to balance other social and environmental objectives and to recognise that plans need to be reviewed in response to significant changes in the housing market. It also allows significant and unexpected changes in circumstances to be understood and addressed, and their consequences managed.

APPENDIX 2

PROPOSED RESPONSE TO CONSULTATION

PLANNING FOR HOUSING PROVISION CONSULTATION -

QUESTIONS ON WHICH WE WOULD LIKE YOUR VIEWS

Name: Sue Clark

Organisation: Hampshire County Council

Address: The Castle, Winchester, Hampshire. SO23 8UD

E-mail address: [email protected]

Telephone number: 01962 845890

1. Consultees are invited to put forward their views on the proposed approach. Section 2 introduced some specific questions on which we are grateful for consultees views and experience.

Hampshire County Council Response

Hampshire County Council is disappointed that a relatively short period of time was allowed for this consultation, over the summer holiday period. This has made it difficult to give a response which has been agreed by elected Members in the time allowed. The consultation paper is an important document and sufficient time should have been allowed for organisations to give a properly considered response.

The key concern for Hampshire County Council is that once sites are allocated as part of the five year supply, developers will be able to bring forward the land at any time regardless of whether it is brownfield or greenfield land. This is likely to result in increased development on greenfield sites as these are likely to be more attractive to developers than brownfield sites. In Hampshire, if a five year supply of land is allocated, there will actually be a 10 year supply available to developers as 50% of all completions in Hampshire in recent years have been on small sites (which are not allocated) or on brownfield windfall sites. (21% completions on small sites, 29% completions on large brownfield windfall sites.) The proposed approach would lead to an over supply of land compared to housing requirements, housing requirements would be exceeded by a significant amount and the proportion of house building on brownfield sites will fall significantly. The target of 60% development on brownfield sites may not be met if the proposals are implemented as urban brownfield sites in the South East are often not able to be developed immediately. They are not normally vacant and awaiting development. It takes time for a site to be released by a Government department or for a business to relocate and therefore most of these sites could not be included in the first five years supply. If the proposed approach is implemented there should be more incentive to develop brownfield sites and all areas, not just metropolitan areas, should be able to include a realistic windfall allowance as part of the five year supply.

It is not necessary to make the proposed fundamental changes to the planning system. The changes which have been made in the past to increase the amount of building on brownfield land are working and the total number of housing completions has risen considerably in the last few years. In Hampshire where the regional planning requirement is 6,030 dwellings per annum net housing completions were as follows: 4,815 were built in 2001/02, 5,600 in 2002/03, 6,762 in 2003/04 and approximately 7,400 in 2004/05. The annual average RPG requirement has now been exceeded and this position is forecast to continue for the next six years. At the same time the proportion of housing on brownfield sites has also increased, from 50% in 1996/97 to 70% in recent years.

In order to have any significant impact on the price of housing in the South East, a huge number of additional new houses would have to be built, this would have a significant adverse environmental impact as well as very large infrastructure costs. The best way to help those in genuine housing need would be to ensure that there is a net gain in the amount of affordable housing available, ie more affordable housing is built than is lost under `right to buy'.

One of the key impediments to bringing development forward in a timely fashion is lack of infrastructure. Roger Tym & Partners have provided detailed evidence of the scale of the problem and the Institute for Public Policy Research's (ippr) Commission on Sustainable Development in the South East states, in its final report, "sustainable development requires new investment in the region's infrastructure - particularly in its transport, affordable housing and flood defences".

Nearly four years ago, when publishing the Planning Green Paper, the Government stated that it would be undertaking an urgent review of the system of planning obligations in order to simplify the way contributions can be collected. However, nothing substantive has been forthcoming; the new Planning Obligations Circular published on 18 July leaves things substantially unchanged. The expectation that planning gain will meet affordable housing needs means that the provision of other services, such as transport improvements, libraries and schools, is likely to be called into question.

Planning for new housing provision should be coordinated with planning for new infrastructure, transport, regeneration and employment. It is therefore considered that planning for future development should take place on a sub regional basis (as in the SE Plan) rather than a sub regional housing market area basis.

2. Consultees are invited to highlight good practice that would deliver the collaborative approach to planning for housing markets set out here, or to suggest particular structures, mechanisms and incentives that would support planning and decision making at the level of the housing market.

Response

In response to the need for a sub regional strategy for South Hampshire in the South East Plan, the local authorities in the area have been working collaboratively. The Partnership for Urban South Hampshire (PUSH) authorities are working together on a variety of matters including the distribution of district-level housing figures and intend, in the future, to produce a common policy framework for affordable housing. Planning for the housing market area would involve the same authorities, and could therefore be undertaken fairly easily.

A collaborative approach can only succeed if the authorities choose to work together. Joint working is complicated where authorities have different aims or priorities and where there are different timescales for preparing development plan documents. It is almost inevitable that there will be difficulties and delays when the housing market area includes several districts with differing characteristics. (There are 10 local planning authorities in the South Hampshire Housing Market Area.) It will be difficult to get consistent local housing assessments and assessments of housing land availability unless a single organisation is undertaking or coordinating the work. If local housing assessments and wider housing market assessments are to be used to determine the level and distribution of housing provision, it is important that well thought out, clear guidance is consulted on and then issued well in advance of the work being done so that these assessments are undertaken on a similar basis by each authority.

3. Consultees are invited to give their views on how a tailored approach to planning for housing could work or whether a single approach, but in the context of different levels of growth, is preferable.

Response

There are difficulties associated with both approaches. In areas of high housing demand/high house prices where housing numbers are treated as a minimum that could be met earlier in the plan period if the assessment of housing markets indicate this to be appropriate, there would seem to be no real limit on the number of dwellings that might be built. This sits uncomfortably with the notion that a Regional Spatial Strategy covering 20 years and a 15 year Local Development Framework gives some certainty to the public, businesses and developers, whilst making planning for infrastructure provision even more difficult.

4. Consultees are invited to give their views on how assessments of land availability covering sub regional housing markets could best work and provide examples of existing practice that achieves this.

Response

Hampshire County Council works with the local planning authorities in Hampshire (including the unitary councils of Portsmouth and Southampton) to monitor the supply of housing available on an annual basis; this collaborative work is undertaken on a district-wide basis for the whole of Hampshire. It would be possible to undertake an assessment for a group of several whole districts, but it would be significantly more complicated to undertake the task on the basis of housing market areas as these do not follow district boundaries. Several districts in Hampshire would be in two different housing market areas and this would necessitate them taking part in two assessments of housing land availability. This would be considerably more time consuming than undertaking an assessment for each whole district. The disadvantages of this approach may be greater than the benefits.

5. Consultees are asked to give views on the best means to manage windfall in different areas in order to deliver sustainable development.

Response

Brownfield windfalls are an important source of housing supply which help to deliver sustainable development. In Hampshire, monitoring shows that about 50% of new housing supply is from windfall development. It is sometimes difficult to predict the amount which is likely to come forward during the plan period, particularly if this is extended by another five years, but there are already existing mechanisms, such as binding inspector's reports for development plan documents, which should ensure that the amount of land supply expected from windfall sites is not over optimistic. Phasing of the supply, which gives priority for development on brownfield windfall sites in sustainable locations over allocated greenfield sites would help to deliver sustainable development.

In areas where there is a high level of demand for housing, where there is uncertainty about a very large brownfield windfall site coming forward (eg MOD sites which can accommodate significant numbers of dwellings), plans should be made to meet requirements for new housing without including the brownfield site which may not be released. If subsequently a large brownfield site does become available in a sustainable location, an action plan can be prepared and if appropriate a revision made to the regional spatial strategy. In these circumstances the local authority should be permitted to exceed its housing requirement by up to the amount of the additional housing. This may not give certainty about additional housing supply but could result in significant amounts of additional housing in areas of high demand.

6. Consultees are invited to give their views on how far monitoring market information such as house prices could add value to ensure that the judgements local authorities make about rolling forward are soundly based.

Response

Discussions with house builders are useful but experience in Hampshire shows that they are generally very optimistic about how soon applications will be submitted and also about the timescale for completions on their sites, yet collectively sceptical about whether the forecast total house building will be achieved.

The monitoring of house prices has limited value as price is influenced by many factors, supply has only a small impact on house prices in the South East. The rate of house price increase accelerates or slows in response to a variety of factors such as the buoyancy of the national economy, mortgage rates, etc even when land supply remains steady.

7. We would welcome views on whether the RIA highlights the key costs and benefits - and whether these impacts can be quantified.

Response

The regulatory impact assessment appears to highlight the main costs and benefits.

The assessment of the options states that the proposed policy approach is likely to result in increased development on greenfield sites. Hampshire County Council agrees that this is one of the key disadvantages of the proposed approach. Once sites are allocated as part of the five year supply developers will be able to bring forward the land at any time regardless of whether it is brownfield or greenfield land. This is likely to result in increased development on greenfield sites as these are likely to be more attractive to developers than brownfield sites.

Hampshire County Council is also concerned about the increased burden on local planning authorities and regional planning bodies which would result from the proposed policy approach. Undertaking joint (or consistent) local housing assessments and assessments of housing land availability for each housing market area and maintaining a five year rolling land supply will involve more work and will be significantly more costly for those authorities involved in undertaking two assessments.

The other economic costs associated with the preferred approach relate to infrastructure provision. If these proposals are to be implemented the effects would be greatest in the South East where pressures on resources and infrastructure are most acute. It is one thing to recognise infrastructure issues and it is quite another to actually do something about it. These proposals should not be implemented in advance of issues relating to infrastructure provision being resolved.