What the new housing delivery test means for the local plan-making process

Proposals for a new test to ensure housing is delivered on sites allocated in local plans could lead to an expansion of the local plan-making process and to new site allocation opportunities for landowners and developers, according to experts.

Housebuilding: 'Significant under-delivery' may lead to councils being required to identify additional sites
Housebuilding: 'Significant under-delivery' may lead to councils being required to identify additional sites

In last month's Spending Review, chancellor George Osborne turned up the heat on town halls by announcing a new "housing delivery test" to ensure that homes are delivered on land allocated in local plans. In a consultation earlier this month on changes to the National Planning Policy Framework (NPPF), the government set out further detail on how it intends the test to operate, and the potential sanctions for significant under-delivery.

The consultation document said the government is considering amending the NPPF to "ensure action is taken where there is a significant shortfall between the homes provided for in local plans and the houses being built". It said the test would compare the "number of homes that local planning authorities set out to deliver in their local plan against the net additions in housing supply in a local planning authority area". It suggests that where "significant under-delivery" is identified over a sustained period, councils could be required to "identify additional sustainable sites", potentially including new settlements.

Commentators expressed differing views on how the test might operate in practice. Paul Maile, a partner at law firm Eversheds, said the proposals could prompt councils to allocate a pot of reserve sites "that they can dip into in the event of under-delivery". He said while some local plans already allocate reserve sites, "this seems to be envisaging it happening on a larger scale". Maile said the move could expand the plan-making exercise at a time when local planning authority resources are constrained. He added that developers and landowners could seek to put sites forward in the hope of seeing them allocated in the longer term. "If you can gain allocation as a potential reserve site this time around, it gives confidence that you'll get allocated in the next stage of the plan," he said.

Vicky Fowler, a partner at law firm Berwin Leighton Paisner, agreed that the proposal could be very significant for landowners which had missed out on having their sites allocated in local plans the first time around.

Fowler pointed out that a similar sanction already exists, with the NPPF requiring councils to add a buffer of 20 per cent to their five-year housing land supply figure where persistent under- delivery is identified. The consultation proposal "seems to take it to the next level", she said. According to Fowler, the consultation - which suggests that the assessment of under-delivery would be made over two years - appears to advocate a "two-year review" of housing delivery, and would require councils to update their local plans more regularly. "The idea is you are not waiting for the full review that happens every five years, it's actually a rolling review with rolling policy," she said.

The consultation says that where significant under-delivery is identified, councils would need to consider whether a review or partial review of plans are needed, or whether new settlements can be delivered through additional development plan documents - such as area action plans. Fowler questioned whether such reviews could be carried out quickly. "There's an awful lot of work that needs to be done," she said.

Dominick Veasey, associate director at consultancy Nexus Planning, said the proposal could prompt councils to make more realistic delivery assumptions. Another implication, he added, might be that councils look to allocate more of a mix of sites. He said the authorities under-delivering tend to be those that are relying on one or two major sites, while those with the highest delivery rates have a mix of small, medium and larger sites.

The consultation suggests one approach could be to express significant under-delivery as a percentage below expected delivery. Jason Lowes, partner at consultancy Rapleys, cautioned against a uniform target. "It would be difficult to put a blanket percentage across the country," he said. "If the reason that sites aren't going forward is ... because those sites aren't viable, you are penalising that local authority."

Margaret Baddeley, planning director at consultancy Nathaniel Lichfield & Partners, said that measure could lead to better cooperation between local authorities and developers. "Perhaps it means that developers and local planning authorities will need to work more closely together on realistic delivery rates for sites that are allocated," she said.

The consultation also proposes that local authorities are given a transitional period of between six to 12 months to bring their plans in line with an amended definition of affordable housing (see panel, above). Baddeley said that other policy changes could also require a transition period: "It seems quite difficult to single out affordable housing as the only change that would need transition."

Veasey added that delivery of the Starter Homes programme would be unlikely to take off until the end of the transition period. Until then, there could be conflict between the NPPF and local policies, he explained. "Until local planning authorities have done their policy work ... there will be an element of risk with (promoting) Starter Homes without local policy to support it," he said.

Five other proposed changes to NPPF

1. Affordable housing definition broadened

The government proposes to amend the national planning policy definition of affordable housing "so that it encompasses a fuller range of products that can support people to access home ownership", which may not be subject to "in perpetuity" restrictions.

2. Fresh backing for new settlements

The government proposes to strengthen policy to "provide a more supportive approach for new settlements, within locally led plans. We consider that local planning authorities should take a proactive approach ... for new settlements where they can meet the sustainable development objectives of national policy".

3. Presumption in favour of brownfield development

The consultation says the government will "make clearer ... that substantial weight should be given to the benefits of using brownfield land for housing (in effect, a form of 'presumption' in favour of brownfield land)".

4. Scope of Starter Homes initiative widened further

The scope of the current exception site policy for Starter Homes could be widened to incorporate other forms of unviable or underused brownfield land, "such as land which was previously in use for retail, leisure and non-residential institutional uses".

5. Call for release of unviable employment land

The government intends to "make clear that unviable or underused employment land should be released unless there is significant and compelling evidence to justify why such land should be retained for employment use".

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