Interview: Kit Malthouse, housing and planning minister

The housing and planning minister speaks exclusively to Planning about housing need, developer contributions and plans for the Oxford-to-Cambridge corridor.

Housing minister Kit Malthouse
Housing minister Kit Malthouse

Housing ministers do not tend to stay in the job for long. In July 2018, when Kit Malthouse took on the role, he became the third in the past year and the 18th in 20 years. The MP for North West Hampshire is aware that his most recent predecessors have had a particularly short shelf-life - Dominic Raab was only in the post for six months and his predecessor, Alok Sharma, for seven.

"Hopefully, I will last longer than that," says Malthouse. "I've been given orders to do as much as I can as fast as I can. That's what I'm going to concentrate on." Asked how he would measure success in the role, Malthouse answers: "That's easy. It's all about numbers. My mantra is: more, better, faster. For me, success would mean that, either now or certainly in the future, I've laid the foundations for increased delivery."

In the course of a wide-ranging interview, the minister says that:

  • the combination of the new household projections and the standard method of assessing housing need has produced "crazy" results
  • the ministry aims to consult on a revised standard method before Christmas, and "certainly before January 24"
  • the government will respond to responses on its consultation on the future for developer contributions by Christmas

Malthouse took over the job at a key time. The final version of the revised National Planning Policy Framework (NPPF) was published just weeks after his appointment. At the same time, the government announced that it was considering reviewing the NPPF's new standard method of assessing housing need in light of the then forthcoming (now published) Office for National Statistics (ONS) household projections, to ensure that progress towards its 300,000-homes-a-year target was not impeded. The projections show a 24 per cent drop in household formation compared to the previous figures, resulting in dramatic falls in housing need in many areas. Unsurprisingly, many in the sector are keen for the government to clarify its future plans for the standard method as soon as possible.

Malthouse says: "We are obviously digesting what the ONS has produced. Everyone was a bit taken by surprise by the numbers and want to understand what the implications are. There have been some really anomalous results from it - some very strong growth areas which have come out with a zero housing need. That's just crazy."

Malthouse says he has "concerns" about the new projections' implications for housing need figures. He says: "A problem with these projections is they don't recognise pent-up demand. As a country, we haven't been building enough housing for decades." The ONS has based its projections on past trends from a "period of particularly low household growth", he says, which might put "an artificial constraint" on future expansion. He adds: "Household growth can only happen if accommodation is available, and during that period we are not convinced it was.

The minister would not be drawn on any additional factors his department is considering adding to the standard method. He says: "I've been given seven or eight options to think about and I've posed a few options myself to the team." But he drops a hint on possible considerations: "We are having a look at what other information there might be during that period - such as growth in household density - to see what the indicators might be for need in the future." He goes on to say: "It may be that we have to add other dimensions to the targets, such as growth in the number of people per household. Is that indicating something about suppressed demand?"

While Malthouse insists the ministry wants to provide clarity as soon as possible, he suggests a timescale for the draft proposals that some in the sector will see as disappointingly long. He says: "We recognise that the whole sector, councils included, need clarity pretty quickly. We will come out as soon as we can with some sort of consultation." He adds: "It would be great to get it sorted out this side of Christmas and certainly before January 24."

After this date, the government expects plans submitted for examination to have applied the standard method to their need assessment. The fact that Malthouse is also treating this date as the final deadline for the ministry to publish draft revisions to the standard method suggests that finalised revisions will not be ready until significantly later. This implies that, unless the MHCLG pushes back the 24 January deadline for application of the standard method to local plans, councils will from that date initially be required to apply a need assessment method that the minister has said is generating "crazy" results. Following the interview, we asked the MHCLG to confirm that the existing version of the standard method would be applied after January 24, rather than the draft revised version. It said that it would, although it also raised the prospect of transitional arrangements between the two versions of the method. The ministry said that its consultation on the revised standard method "will include details of when we expect the revised method to take effect and any transitional arrangements".

Given the drop in the household projections, the government is bound to face questions over whether it should stick to its target of delivering 300,000 new homes a year "by the mid-2020s". Asked if the goal was still appropriate, Malthouse says: "My personal view is that, if we take into account this idea of pent-up demand and the change in household demographics, and you couple that with the affordability issue, then there's no doubt that we need to build a hell of a lot more houses. Even if we were to overshoot some sort of revised target, there's still a strong case to say we should do that purely on affordability grounds. We have to make up for 20 years' worth of under-supply. The target has to bear that in mind too."

Alongside potential revisions to the standard method, another government action that is eagerly awaited by the planning sector is its response to a consultation earlier in the year on revising the system by which the contributions made by developers to local infrastructure costs are made. It had proposed changes to the community infrastructure levy (CIL) and section 106 payments, as well as allowing combined authorities to levy a "strategic infrastructure tariff" (SIT), similar to the London mayoral CIL that provides funding towards Crossrail.

Reiterating comments he made last month at a session of the House of Commons housing, communities and local government committee’s investigation into land value capture, Malthouse says the government is "chewing on" the consultation responses. He said: "My guess is we will come to you before Christmas. It may be that some of the stuff is announced at the Budget. But comprehensively, definitely by Christmas."

Malthouse says the government is still looking at ways of more effectively capturing increases in land value generated by planning permissions. Next steps may be influenced by "issues" emerging from Sir Oliver Letwin’s review of the rate at which planning permissions are built out, which is due before the Autumn Budget, itself due on 29 October. "As I've said before, the art of land value capture is to pluck the goose with a minimum of hissing and what we don't want to do is to choke off activity," he says. "But I think everybody recognises the need to contribute towards the significant infrastructure payments that are going to be required, particularly for some of these large-scale developments."

On the issue of large-scale developments, one of the the ministry's key projects is promoting new settlements in the Oxford-to-Cambridge corridor. In last year's Autumn Budget, the chancellor Philip Hammond declared that the government wanted to see one million new homes in the arc by 2050. To this end, in July, Malthouse wrote to council leaders in the area asking for initial expressions of interest in promoting new settlements. The deadline was 14 September, and the week after the interview Malthouse told Conservative Party conference delegates that the MHCLG had received "something like" 14 expressions of interest. During our conversation, Malthouse says that the ministry is happy with the reaction.

Most of the proposals are not new, he concedes, but "have been in the ether and need something to unlock them". Some of them are even underway already, he adds, citing the expansion of Milton Keynes, while others are long-held proposals, like Bicester's plans to complete its ring road around the town to spur new housing development.

Now it has received some interest, the government plans to "configure" the nominating authorities into "coherent" groupings with which to negotiate infrastructure funding deals "along the lines of the Oxfordshire model", he says. This saw the government, earlier this year, agree a deal with the county's authorities in which the councils agreed to plan for 100,000 new homes in return for £250 million of infrastructure investment. Ultimately, Malthouse says the government wants to draw up similar housing deals with authorities "along the whole corridor right the way through to Cambridge". "Fundamentally, that's how we are going to make these things happen," he says. He says the government is in "active conversation" on new housing deals, and hopes to announce some more "before Christmas".

One of the key planning initiatives launched under previous communities secretary Sajid Javid was the programme of local plan intervention. Under this initiative, councils found by MHCLG to have inadequate justification for delays in local plan-making were threatened with having their strategies prepared by the government instead. In March, the ministry sent a team in to three councils - Wirral in Merseyside, Thanet in Kent and Castle Point in Essex - to scrutinise their local plan processes. But since then, there's been little news from Whitehall.

Malthouse says the government has not yet decided what to do next: "We are considering the options and discussing them with the locally-elected representatives in each of those three cases," he says. Malthouse says 24 January is a deadline for further action. How effective does Malthouse think such sanctions have been in improving planning performance? "We hope it sharpens people's minds," he says. "We hope that the carrot of being in control of your planning will be enough. If, in certain circumstances, a stick is required, then hopefully that will push people over the line."

However, it is not just council performance that is under the microscope. A gripe among many developers, and some council planners, is the time it can take the government and its agencies, such as the Planning Inspectorate, to make planning decisions. This is particularly so when local authorities have been put under pressure to make decisions and prepare plans in a timely way.

All communities secretaries have struggled to meet the three-month statutory deadline for the determination of ministerial decisions announced by then-chancellor George Osborne in March 2016. A quarter of such decisions missed the deadline last year, according to government figures. Meanwhile, despite improving its performance in 2017/18, PINS still missed six of its nine headline targets for deciding application and enforcement appeals.

Malthouse says: "I'm looking at the data about what's happening. Obviously, we want to get things done as quickly as we possibly can and we don't want to be an unnecessarily constraint. But some of these planning decisions that come up to the secretary of state are so strategic that you do need to look at every nook and cranny because it will have an impact over the generations. I don't necessarily apologise for that."

Kit Malthouse political CV

1998: Elected as a member of Westminster City Council, serving as Conservative group chief whip, chairman of social services, deputy leader and cabinet member for finance before standing down in 2006.

2008: Elected as London Assembly member for the West Central seat, serving as Boris Johnson’s deputy mayor for policing and vice-chairman of the Metropolitan Police Authority.

2012: Re-elected to London Assembly, serving as Johnson’s deputy mayor for
business and enterprise.

2015: Elected MP for North West Hampshire with a 58 per cent share of the vote, taking over from former planning minister Sir George Young.

2017: Re-elected as MP on a 62 per cent share of the poll.

January 2018: Appointed parliamentary under-secretary at the Department for Work and Pensions with responsibilities including financial support for housing.

July 2018: Appointed housing and planning minister, including responsibility for planning policy, casework oversight and supporting the secretary state on housing supply and policy and delivery.


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