National Planning Policy Framework 2018

National Planning Policy Framework 2018 Fix or fiddle?

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National Planning Policy Framework 2018 Fix or fiddle?

We have lived with the National Planning Policy Framework since 2012.

Generally it has been welcomed by the development industry. Whatever we have lost by the abolition of the old Regional Spatial Strategies, the NPPF does at least give a national set of principles to be applied by local planning authorities when formulating local plans, and by decision makers when no relevant up to date local plan or policy is in place.

Insofar as it was part of the government’s strategy to deliver more housing, it probably can be judged a success. The supply of housing has eased back up to about 180,000 units per annum, well above the levels at the low point of the recession, but still a long way short of the figures commonly quoted as needed to meet the demand to house new households (250,000 to 300,000 per annum). My view that the mere existence of the NPPF (not the detailed wording) has been the key to success.

However, the fact that there is still a shortfall in housing delivery means that planning policy inevitably remains on the radar.

The government is seeking to address the housing supply issue. We live in a world of slogans – “Brexit means Brexit” so perhaps it is inevitable that the Housing White Paper and reform proposals were set out with similarly eye-catching (but ultimately meaningless) titles – “Fixing our Broken Housing Market” and “Planning for the Right Homes in the Right Places”.

Against this background, are the changes to the NPPF, now embodied in the 2018 framework, going to make a material difference in addressing housing delivery problems?

Neil Bucknell Partner neil.bucknell@laytons.com +44 (0)1483 407 072

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National Planning Policy Framework 2018 | Fix or fiddle?

An Overview The Ministry for Housing Communities and Local Government’s approach One of the highlights of my year is the annual Home Builders Federation planning conference, held in September every year. The department’s chief planner, Steve Quartermain, is a frequent speaker, delivering a down to earth (but “official”) insight on what is going on in Whitehall. Inevitably this year his presentation to the HBF concentrated on the NPPF 2018.

He explained that there were a number of overriding themes that drove the proposals that were embodied in the draft that was sent out for consultation in March 2018. On reflection, it might have been helpful had these been incorporated in an introductory section to the consultation documents issued earlier this year, as it might have helped some of the consideration of the proposals that followed. In broad terms they were: 1. Clarification 2. Flexibility 3. Assessing and Addressing Need 4. Ensuring Delivery 5. Good Design 6. Environmental Protection 7. Dealing with Viability 8. Rural Development I will have a look at most of these – not rural development, where there is little new in the two paragraphs that are headed “Supporting a Prosperous Rural Economy”, which largely repeat policies in the previous NPPF and emphasise that any rural location that is not “sustainable” is unlikely to be regarded favourably as a location for development in the foreseeable future.

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National Planning Policy Framework 2018 | Fix or fiddle?

Clarification

It is no good reflection on my profession that it was reported at the HBF conference that recent surveys of the various groups that participated in the planning process indicated that only amongst lawyers was there any level of satisfaction with the current system. We lawyers should look up from our desks, and appreciate the fact that if the planning system is creating additional work for lawyers, it probably isn’t delivering the housing we need in a cost-effective manner!

Steve Quartermain made the comment that the department had been concerned at the number of disputes that had reached the courts regarding the interpretation of NPPF 2012. There would therefore seem to be a need to look at the drafting again to see if it could be made any clearer.

The consultation draft intended to confirm that there was no intention to fundamentally depart from the underlying principles of NPPF 2012. The three overarching objectives which need to be achieved to demonstrate sustainable development remain – an economic objective, a social objective and an environmental objective.

Clarification clearly does not mean conciseness! The new NPPF has grown, from 49 pages of text to 61 and from six pages of appendices to 12.

Notwithstanding the desire for clarification, the consultation responses were often seeking clarification or pointing out further areas where it was needed. Indeed, in places the government has had to acknowledge that the wording in NPPF 2012 was in fact clearer than their second attempt, and they reverted to it!

It is perhaps indicative of the success of achieving this objective that Steve Quartermain reported that no sooner had the final document been published, than his department started to receive telephone calls from various interested parties seeking clarification as to what the new framework meant! It seems therefore that there has been limited success in achieving this objective.

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National Planning Policy Framework 2018 | Fix or fiddle?

Flexibility This is a cross-cutting theme in the changes that have been made. It appears that the department appreciates that a “one-size-fits-all” approach to parts of the NPPF may not be appropriate. The point was made that our local planning authorities comprise quite a wide mixture of entities – from remote rural locations with a housing demand that can be met from a few hundred houses over a plan period, to large commuter belt authorities in areas of high economic growth, where growth needs to be in the tens of thousands. What Steve Quartermain did not say (although earlier speakers from the planning profession did!) is that this is partly as a result of the haphazard and badly thought out reform of local authority boundaries that we have experienced in the period since the 1974 local government reorganisation.

There are, though, two areas that possibly can be taken under this heading where the direction of policy does not seem to be well thought out, or has not addressed a continuing problem, created by the coalition government in a misguided attempt to encourage more local engagement in planning.

The first problem area relates to a stated intention to encourage small and medium sized builders to come back into the market to help delivery. The consultation document suggested that local authorities should aim to achieve 20% of their delivery by small and medium sized developers. After it was pointed out by many consultees that this was not realistic, this has been reduced to 10%. There is a fundamental flaw though in the government’s thinking. A simple statement that small sites tend to be delivered quicker has little to do with overall rates of delivery. Obviously, if somebody is building only ten houses, they can expect to sell them quicker than a national house builder who has a site for 250 units. That national house builder though is likely to be delivering at a rate of between 50 and 120 per annum. Furthermore, if you are going to deliver through smaller sites, it will mean more planning applications (and therefore a greater need for resources for local planning authorities). During the breaks between sessions, delegates were swapping anecdotes between them about the delays that they were experiencing with some of the less responsive local planning authorities – I heard one developer explain that he was waiting for a decision on an application to add another four units to a site for over two years since the application was made.

This policy is not going to make life any easier for small house builders. Anyone trying to deliver housing over the threshold above which affordable housing applies is likely to encounter as many delays as the national house builder promoting sites with hundreds of units. This is before the SME developer has to sit down at his desk in the evening to cope with the health and safety, consumer protection, building standards,

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labour supply and taxation regulations, to say nothing of the problems of raising finance on reasonable terms. Why put your home and all your assets at risk to build 50 houses a year, when (if you have a talent or aptitude for finding sites and negotiating deals) you can go to work for a national house builder, and receive a basic salary, car and benefits package, and probably enjoy a good bonus if you’re as good at your job as you think you are?

There is much concern amongst the developer and planner communities regarding the advance of neighbourhood planning, introduced with the Localism Act 2011. The new NPPF does try to address the issue, but in my view not in a satisfactory way. Local planning authorities are required to promulgate “Strategic Policies” and “Non-Strategic Policies” – the latter are to be superseded by a neighbourhood plan, but a neighbourhood plan should not promote less development than set out in its strategic policies of the area, or undermine strategic policies. That sounds all well and good, but how will it work in practice? There are a growing number of parts of the country where the local planning authority has failed to deliver a local plan, and where neighbourhood plans are proliferating, which are hardly going to make it easier for the local planning authority to impose on top new strategic policies that “snuff out” any earlier neighbourhood plans. No additional clarity is provided by the relevant paragraphs of NPPF 2018, and the continued tension between local and neighbourhood planning will subsist.

It was perhaps instructive that the point was made in the course of the HBF conference that neighbourhood planning is flourishing in prosperous commuter belt authorities, but not in deprived areas where regeneration is urgently required. This is planning for Windsor & Maidenhead and Aylesbury Vale, not planning for Gateshead or Grimsby.

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Addressing needs and procuring delivery The principal change here is the government’s requirement for housing need to be formulated in accordance with the standard method in the National Planning Guidance unless exceptional circumstances apply. This is to be welcomed – having different approaches to housing supply assessment has inevitably resulted in disputes regarding whether a local authority has properly assessed its housing supply, and whether a nondesignated site should come forward to meet the shortfall.

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It would be naive though to imagine that this does not have its down side. As new housing demand figures are published, inevitably some local authorities have seen their assessed demand reduced. The local authority, seeking to fulfil its obligations against local opposition is unlikely to pursue a local plan based on old methodology if it is aware that there are new lower targets to meet, with the inevitable result that some local plans have now stalled so that the issue can be revisited.

National Planning Policy Framework 2018 | Fix or fiddle?

Good design

The issue of design remains contentious – what is good design?

There does need to be a recognition that what is “visually

Paragraphs 124 to 132 of the new NPPF are full of wonderful good intentions, but do ignore one important issue which perhaps needs to be addressed.

may have won awards for the design of the Oxley Woods

attractive” is both subjective and something that changes through time with fashion. Rogers Stirk Harbour and Partners development at Milton Keynes that was built by Taylor Wimpey just over a decade ago, but the housing leaked, and suffered from a number of design defects that resulted in a major claim being made against the architect. On the other hand, Quinlan Terry’s designs for the Duchy of Cornwall at Poundbury divide opinion sharply. Some residents absolutely love it, others find it eerie and soulless.

There is a problem that needs to be addressed. Sadly, it is not unusual for a client, having secured an outline planning permission, to report with exasperation that their reserved matters application has been delayed because the urban design officer at the local planning authority has taken against what the client's architect has proposed, without being able to give any tangible reasons that can be addressed by amendment to the proposed designs. It is surely incumbent upon the department to take the lead by including a short statement that decision makers have to recognise that there is an element of subjectivity in assessing visual attractiveness, and the individual decision makers should not seek to impose their views on applicants.

It was clear though from Steve Quartermain’s presentation, that ‘good design' is not just the visual appearance, but also “the effective use of land” has to be considered – see chapter 11 of NPPF 2018. It is difficult to avoid coming to the conclusion that the policy is to keep density high, to deliver more houses from less land. How this is to be reconciled with policies supporting provision of adequate open space and recreation facilities, achieving well-designed places, and mitigating the impact on the land that is developed remains something that the decision makers and applicants have just got to sort out between them!

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Environmental protection At the HBF conference, Steve Quartermain did make an uncharacteristic error – he characterised protecting the Green Belt as an environmental matter. It is unhelpful when the government’s most senior planner falls into the common trap of confusing a planning based policy (one designed to stop urban areas expanding and connecting up) with policies designed to protect the natural and historic environment. Green Belt policies often inhibit development in sustainable locations of low landscape and biodiversity value around some of our cities. However, the Green Belt remains one of the untouchable holy cows of planning policy, so there was never any realistic prospect of this nettle being grasped when we have a government struggling for survival and support while grappling the problems created by Brexit.

It could though have used better public relations when consulting regarding the subtle changes made to biodiversity policy. The largest response to the consultation was to the deletion of local wildlife sites from the footnote to paragraph 11, which lists areas of particular importance where planning permission should be refused. Steve Quartermain made the point, though, that if you read chapter 15, there has been a subtle change from NPPF 2012. The qualification to the requirement (now in paragraph 170) that policies and decisions should contribute to the natural environment by minimising the impact on and providing net gains for biodiversity has been amended by removing the words “if possible”. Somebody at MHCLG has tried to make the point (in the response to the consultation) that even though local wildlife sites have been removed from the list of sacrosanct sites in paragraph 11, the duty of local authorities to produce policies which identify and safeguard sites for wildlife in accordance with circular 06/2005 has been stressed, which begs the question – why risk bad publicity from the influential wildlife lobby by making the deletion, when your intention is (apparently) to enhance obligations to protect biodiversity?

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National Planning Policy Framework 2018 | Fix or fiddle?

Viability Viability at the plan making stage remains an issue that is not properly addressed, and instead is intended to be dealt with by a planning guidance. There is a continuing reluctance by the government to recognise that viability is something that can only really properly be assessed on a site-by-site basis. When it comes to decision making the new NPPF requires the decision maker to decide the weight that it gives to any viability assessment. The government has stuck to its guns on the issue of making viability assessments public, and this will need to be borne in mind in future. The accompanying guidance does though permit information that may be commercially sensitive to be aggregated when cost figures are presented, to protect commercial confidentiality. Some helpful guidance is given as to how viability appraisals ought to be presented, but appraisals should be prepared on the basis that they will be made public.

At the HBF planning conference, there was a presentation from Jim Ward of Savills, who tracked the increase in house prices, build costs and land prices since the adoption of NPPF 2012. Land prices have not kept pace with the increase in the other two measures, and his conclusion was that viability issues were effectively being resolved by market mechanisms – or perhaps more correctly, the land market was reflecting the fact that a scheme which delivers the policy requirement for affordable housing and complies with the local authority’s planning obligations policies (or recognises the need to pay CIL pursuant to an adopted policy) means that there is less left over for the landowner at the end of the process. The rise in house prices since the recession at the early part of the decade has effectively partially cured the viability problem. It may of course recur if the housing market goes into reverse!

The NPPF does not satisfactorily address one issue which can cause concern, namely how viability should be reviewed if permission is granted on terms which do not fully comply with adopted policy to capture any value if the actual financial outcome of the development is better than the one presented at the time of the planning application. This is often something that causes considerable delay and difficulty in the planning process, and is another disincentive for SMEs to promote smaller sites that may struggle from a viability point of view. It is no incentive for a developer to bring a scheme to fruition, if at the end of it the profit that they have struggled to make is subject to the possibility of a clawback by the local planning authority. My view is that an opportunity has been missed to circumscribe viability review, if not to discourage it save in the most exceptional circumstances.

It is helpful, though, that NPPF 2018 makes it clear that if an application complies with policy as regards affordable housing and planning obligations, no viability appraisal should be needed.

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Will it work?

In an earlier publication (Reforming the National Policy Framework – Notes from a parallel universe) I was somewhat dismissive of the approach taken to the revision of the NPPF. However, my scepticism as to its contribution towards dealing with the housing supply problem remains. What is of concern is that there are other problems which have not been addressed, or where the approach taken in the new NPPF may increase some of the problems that remain in the system. Let me give two examples:

1. Affordable Housing Tenure – Ever since the government announced its intention to encourage “starter homes” there has been a continuing series of consultations and responses, in which one issue has not been properly addressed. This is the proliferation of new tenures and forms of affordable housing, specifically designed to encourage people to get on the housing ladder.

Novel forms of tenure are unattractive to lenders, and any housing which is specifically linked “in perpetuity” so it can only be acquired by first time buyers, linked to the price being set by reference to a percentage of its “open market value” is an impaired asset in the hands of its owner. The “open market value” of an asset depends on it being widely saleable without restrictions. Housing that is limited as to the identity of those who can acquire it is going to be difficult to sell. My concerns remain – it creates a poverty trap for those who struggle to get on the housing ladder, who will then find it difficult to move up the housing ladder as their housing needs change, especially if this results from needing more accommodation for a growing family. There are shared ownership tenures (such as the well-tried shared equity lease originally produced and approved by the Housing Corporation) which are well recognised by lenders, and which provide a mechanism enabling the owner occupier to buy out the retained ownership share and sell on the open market as they move through the housing market. The government should abandon its propensity for worthy sounding labels for novel tenures, and instead provide a funding to enable housing associations and others to fund such arrangements.

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2. As mentioned in my previous publication in this area, I despair at the approach taken by planning authorities and some Greater London boroughs towards economic regeneration. Obliging developers to employ local residents, or procure materials from local suppliers is not the way to stimulate a competitive and dynamic local economy. The boundaries of London boroughs represent no more than historical accident resulting from the way that local government was reorganised in the mid-1960s, they do not bear any relationship to travel to work areas, or proper catchments for the supply of building materials. Provisions such as these impede (rather than encourage) development, and are precisely the type of requirement that is driving SME developers out of the development market.

There are some aspects of NPPF 2018 that are to be welcomed, but nobody should be under the illusion that it will in any way substantially contribute towards reducing the shortfall in housing supply in the country. As long as central government (and in particular the Treasury) continues largely to rely upon the sale of market housing to subsidise the provision of affordable housing, and fails to address properly the resource issues of many local planning authorities, then the current targets will remain unattainable.

Putting together NPPF 2012, and bringing together representatives from the house building industry, the planning profession, local government and an environmental NGO was in many ways an imaginative step that did bring an improvement. Tinkering with it will not make much difference.

Similar visionary approaches need to be taken to other elements of the housing supply chain.

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National Planning Policy Framework 2018 | Fix or fiddle?

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