The PAC has today published Planning and the broken housing market, which calls for the government to set out the "full set of actions" it is taking to achieve its annual 300,000 homes target and to detail a range of new "carrot and stick" interventions to ensure local authorities produce local plans.
There is also a "lack of detailed rationale as to why this target was chosen [by the MHCLG] in the first place", the report adds.
The ministry "lacks year-on-year projections on how it will ramp up house building, only illustrative projections which are not in the public domain," the report says. It adds that "to make this even more concerning, the target does not align with the department’s new method for calculating the need for new homes which shows that just 265,000 new homes a year are needed".
The report recommends that, by October 2019, MHCLG "should set out, in a single publicly-available document, the full set of actions it is taking to achieve the target of 300,000 new homes and include year-on-year projections for the number of new homes it expects to be built".
The document also says that fewer than half of local authorities have an up-to-date local plan in place, "despite the department stressing the importance of a ‘plan-led system’ for development".
It says the ministry has "made limited use of its powers to intervene in local authorities who have not produced a local plan" and is "avoiding decisive action" on the issue.
The report recommends that, by the end of 2019, MHCLG should write to the committee "detailing what additional interventions it will make when local authorities fail to produce local plans. These interventions should include a range of ‘carrot and stick’ measures of support and penalties."
Elsewhere, the report says the Planning Inspectorate’s performance "is poor and detracts from efforts to deliver 300,000 new homes a year." Whilst recognising recent moves to improve the body’s performance, the report says that, by the end of 2019, the department "should set out for us detailed actions and milestones for the Planning Inspectorate’s performance improvements across the full range of all its services".
The report also notes that the MHCLG has moved to change the developer contributions system to "simplify the process, bring more transparency and help prevent developers reducing contributions using viability arguments".
However, it recommends that the department "continuously monitor whether its reforms to the Community Infrastructure Levy and section 106 are having the impact that is necessary and adjust or adapt accordingly".
It adds that MHCLG should update the PAC by the end of 2019 "on the impact of those reforms already in place, and on the progress of implementing those that were in development at the time of our evidence session".
The report also recommends:
- by October 2019, MHCLG should "set out its expectations for the types, tenures, and amounts of affordable and social housing to be delivered and how this will contribute to the 300,000 new homes a year";
- by October 2019, the department should "set out how it will work with local authorities, developers, and other agencies on how they will prevent, penalise and compensate for poor residential build quality".
In response to the report, housing minister Kit Malthouse said: "This government is determined to restore the dream of home ownership for a new generation by delivering 300,000 homes a year by the mid-2020s.
"We’re committed to building more, better and faster, including £44 billion of funding and guarantees to support more homes, reforming the planning system to free up more land, and removing the cap on how much councils can borrow to build.
"We’re making real progress, last year delivering more new homes than in all but one of the last 31 years."
The department said it would respond to the report "in due course".
In February, a report by spending watchdog the National Audit Office (NAO) warned.that the planning system "is not working well" and the government must "take this much more seriously" in order to meet its own target of building 300,000 homes per year from the mid-2020s.