What the finalised standard method of assessing housing need means for planners

The government's confirmation that planners should use the 2014-based household projections for its new standard method of assessing housing rather then the 2016-based figures should dispel any confusion on the issue, say some observers. However, other commentators say proposals for a longer-term review of the standard method could prompt further uncertainty for plan-makers.

New homes: the government has confirmed changes to its standard need method
New homes: the government has confirmed changes to its standard need method

At the end of January, the government’s new standard method for how councils should calculate local housing need came into force. But there was a problem: at the time, there had been no confirmation on which set of Office for National Statistics (ONS) household projection figures planning authorities should be using when drawing up local plans.

Back in September, the ONS published new projections based on 2016 figures, to supplant the previous 2014-based projections. However, when applied to the government’s new standard method, the 2016-based figures produced a much lower level of housing need, totalling 210,000 homes a year across England, far short of the government’s 300,000 units-per-year target.

As a result, the Ministry of Housing, Communities and Local Government (MHCLG) issued a consultation last October that proposed changing its Planning Practice Guidance (PPG) to make clear that planning authorities should use the older 2014-based projections. Last week, in its consultation response, the department confirmed that the changes would indeed be made and updated the PPG accordingly. However, the MHCLG said the changes would be temporary and that it would "review" the standard method over the next 18 months "with a view to establish a new approach".

Simon Elliott, a planning associate at consultancy Bidwells, said it is a "sensible" move that overall would produce higher levels of housing need compared to the 2016-based figures. "Anything else would have taken far too long to resolve," he said. "To go back to the 2016 data wouldn’t have fulfilled any objectives in terms of getting anywhere near 300,000 units per annum."

In terms of local plan making, Elliott believes that, in practice, nothing has substantially changed since most authorities were already following the government’s recommended use of the higher 2014-based projections. "There were a few kneejerk reactions to getting in the lower figures, but [planning minister] Kit Malthouse came out straightaway and said ‘this is ridiculous, we need to focus on what the 2014 projections tell us’," he said. "So, I think you would have had to be really quite naïve to focus your plan making on the 2016 figures."

Andrew Lowe, senior planner, economics, at Turley agreed. "It’s a quick fix and many authorities have been sensibly taking [the government’s view] as the direction of travel since the 2016 projections were released. MHCLG has been clear that its views should carry weight in the planning process, even if they weren’t formalised in planning guidance. If you’d been using the 2016 projections, you really were burying your head in the sand."

However, in terms of decision-making, the publication of the 2016-based projections had made a significant impact on appeals. In many cases, consultants reported, the resulting lower levels of housing improved councils’ housing land supply positions and planning inspectors were backing their arguments. Lowe said that last week’s announcement blocking use of the 2016-based figures removes any ambiguity on the issue. "Some inspectors were happy to use the 2016 projections in making decisions because that was the guidance at that time," he said. "Clearly, that has now moved on."

But Cristina Howick, a director at consultancy Peter Brett Associates, which does a lot of work on behalf of local authorities, believes MHCLG’s consultation response and the updated PPG has done little to clarify the situation when it comes to plan-making. "It doesn’t remove the uncertainty because it is going to be reviewed again within 18 months, which is very bad news for people trying to write plans," she said. "They take longer than 18 months, but you also can’t wait because 18 months is too long. You just don’t know what the numbers are going to be when you submit the plan for examination. It remains a nightmare."

According to Howick, the revised PPG also creates further uncertainty by saying that the local housing need figure should be regarded as a minimum figure and a "starting point". "It’s not hard and fast," she said. "Previously, it said that you could change it, but it had to be exceptional circumstances. Before we had the standard formula, everyone spent a long time arguing about housing need and it delayed things. This is a big threat because it risks returning to how things were previously, which was just endless arguments about this stuff."

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