When the Ministry of Housing, Communities and Local Government (MHCLG) first revealed its standard method for consultation last autumn, it was meant to simplify complex debates and uncertainty around local authority housing need. The new formula was finally introduced in July's revised National Planning Policy Framework.
However, the standard method’s reliance upon household formation projections meant that when the Office of National Statistics published much-reduced household projections in September, it produced much lower housing requirements for many authorities. According to the MHCLG, the figures, using the standard method, added up to 213,000 households per year nationally, compared to 269,000 under the previous projections. It therefore undermined the government’s 300,000 per annum housebuilding ambition. Anticipating this, the MHCLG had announced an immediate review of the formula in July. With the review and the lower projections casting doubt on the basis upon which councils should be preparing plans, authorities such as Greater Manchester and St Helens publicly paused plan progress.
A surprise consultation launched last Friday – housing minister Kit Malthouse had previously stated that draft revisions would not be published till the end of the year – proposed that authorities simply ignore the latest household formation projections, which were based upon 2016 population figures. It suggested that, in the "short term", councils should instead use the standard method as currently described, but based upon the 2014-based household projections published two years ago. The MHCLG consultation document made clear that any immediate changes to the method itself would cause "unacceptable" delays to plan-making.
Simon Elliott, planning associate at consultancy Bidwells, said the consultation is the best outcome that could have been hoped for. "This is a bit of a relief really. If they’d tried to change the method in the next two or three months it would have been ill thought through," he said. Andrew Lowe, senior planner at consultancy Turley, said: "This breaks the inertia starting to take hold among some authorities who were starting to delay plan-making. This clarity allows them to move forward." Mike Kiely, chair of local authority body the Planning Officers’ Society, also welcomed the move, saying "it will have the maximum calming effect in terms of allowing authorities to plan".
The early timing of the consultation, which closes on 7 December, means the government will in theory be able to introduce any necessary changes to Planning Practice Guidance (PPG) before the standard method takes effect for plan-making on 24 January 2019. However, an MHCLG spokesman declined to confirm whether or not the government is aiming to bring in the latest proposed changes by that date.
Jonathan Dixon, an associate director at Savills Planning, said an early introduction is likely. "This will mean that no local plans can be submitted with a housing requirement predicated on the 2016 household projections – something the government has been keen to ensure," he said. Derek Stebbing, a consultant with Independent Plans and Examinations and a member of the government-commissioned Local Plans Expert Group that first recommended the standard method, said: "Clearly the government’s intention is to bring this in before 24 January. I’m pleased it has made this a real priority."
However, the short-term move, by simply reverting to out-of-date numbers, provides no permanent fix to the problems with the standard method’s formula highlighted by the new household projections. The consultation document says the government will "review" the method's formula "by the time the next projections are issued", which will be in two years’ time.
Not all in the sector are happy with the proposal. Cristina Howick, director at consultants Peter Brett, said that simply "kicking the can down the road" will render local authorities’ plan-making more difficult because of a lack of clarity over the long-term assessment of need, making site selection and infrastructure planning harder. By reverting to older projections, she warned, the government is ignoring changes to the regional distribution of growth indicated in more recent population numbers. "It’s a very bad idea to have a short-term fix," she said. "At a local level, the numbers will be very wrong."
The consultation also fails to resolve the issue of the impact of the 2016 projections on decision-making. The PPG says authorities can use the standard method now to inform the calculation of their five-year housing land supply, with many councils’ land supply position having been improved considerably by the much lower 2016-based projections.
Until the changes proposed in the consultation are actually brought in, authorities can continue to make decisions based upon the 2016 projections. But it is not clear what view inspectors would take of an application refused on this basis, given the MHCLG’s expressed intention to change course. Elliott said: "This is going to be quite a headache for inspectors to unpick. This consultation must surely be a material consideration in a planning decision. Inspectors may lean toward saying you should rely upon the 2014-based projections for determining five-year supply."