A blog by Mark Ketley, Director of BH Planning and Design

Following the introduction of a raft of changes to permitted development legislation last year aimed at keeping the economy moving during the Covid-19 pandemic, the Government published two consultation documents setting out its proposed longer term fundamental changes to the planning system. In the words of Boris, the proposals set out in the “White Paper: Planning for the Future” and “Changes to the Current Planning System” consultation documents will address the artificial constraints that are being placed on our potential as a nation by a relic of the mid-20th century.

The White Paper has been hailed as a radical change to an outdated and ineffective planning system and there are indeed some big changes being proposed including the concept of zonal planning, removal of obligations and Community Infrastructure Levy, and the achievement of beautiful design amongst other things. However, it is the proposed changes to the Government’s Standard Method for calculating the housing need for each Local Authority area that has really got everyone in the industry talking.

Housing dominates the world of planning in this country with it accounting for the vast majority of site allocations, planning applications and appeals. In the context of a seemingly never-ending national housing crisis therefore, it is the case that the planning system is critical to solving the acute housing shortage that we have been witnessing for many years.

Ever since the Government published the National Planning Policy Framework (NPPF) in March 2012 we have heard about the need for Local Authorities to significantly boost housing supply through policy-making and decision-taking. In recent years this has worked well to some extent with average housing delivery figures nationally jumping from around 170,000 new homes per year during the early 2010’s to more than 240,000 last year. This remains nowhere near enough and, in the meantime, the housing crisis has continued to deepen.

In response the Government is now proposing significant changes to the Standard Method that will result in a much bigger national need figure of 337,000 new homes per year as opposed to the current figure of 264,000. This change will likely take effect before the end of this year with consultation on the “Changes to the Current  Planning System” having recently ended. There are already significant concerns over the impacts that the proposed changes to the Standard Method will have however, especially in northern areas of the country with many of the additional 73,000 new homes required each year being focused on the South.

Having a Standard Method for calculating the housing need of each Local Authority area is unquestionably a good thing, however since its introduction in 2018 it has been riddled with problems and has given rise to a significant north- south divide in the distribution of housing need across the country. For example, the existing Standard Method produces a figure of just 44,000 new homes per year across the whole of the North of England (North East, North West, Yorkshire and Humberside) representing just 14% of the overall national target. That is despite 28% of the national population living in the North of England and average housing delivery rates substantially exceeding this figure historically.

Paragraph 14 of the “Changes to the Current Planning System” consultation document states that one of the main reasons for proposing to change the Standard Method is to achieve a better distribution of new homes across the country. But is the proposed new formula better?

Based on initial impressions it is suggested that the changes would be successful in overcoming some of the concerns with the existing Standard Method. However, there remain some very real problems with the new proposal with one of its most fundamental failings being that it appears unlikely to do anything to address the neglect of housing need in the North. Indeed, under the proposed changes to the Standard Method, and whilst the overall national number would increase by 27% up to 337,000, the increase in the North would be just 13% increasing by 6,000 new homes per year from 44,000 to 50,000. That would be an extremely small addition to an already disproportionately low number for the North of England, especially in the context of the significant increases otherwise being proposed in the South.

When drilling down to a regional level in the North East the picture is no less worrying, with the proposed new Standard Method likely to result in an increase in housing need of just 16% from 6,250 new homes per year to around 7,280 based on initial calculations undertaken by fellow planning consultants Lichfields. For a region that is highly dependent on new housing delivery to support the local economy, create flexibility in the local job market and drive urban regeneration, such a marginal increase is clearly a cause of alarm.

In some North East areas the housing need looks likely to increase significantly: for example, Northumberland would see a huge increase of around 80% leaping from 650 to 1,170 new homes per year whilst the likes of South Tyneside, Sunderland and Middlesbrough would also see increases in the region of 25 – 35%.

However, in contrast Newcastle would see a drop of around 24% in its housing need from 1,035 to 774 new homes per year which cannot be considered acceptable for the region’s capital and main focus for economic growth. In a similar vein, County Durham would see a reduction of some 11% from 1,260 to 1,140 new homes per year which again would do nothing but undermine an area with some of the most aspirational economic growth projects.

The Government’s aspiration to support the renewal of towns and cities, especially those in the North, whilst also addressing areas with the greatest affordability pressures is to be commended and is widely accepted as being a key driver behind the proposed changes to the Standard Method. The ability to achieve the desired outcomes is seriously called into question however when hugely ambitious and unrealistic housing figures will continue to be placed on local authorities in the South while authorities in the North remain stuck with disproportionately and inappropriately low figures in comparison. Further tweaks to the Standard Method formula should therefore be explored prior to the proposed changes being implemented to properly level up the North, including the North East, and ensure that the proposed new Standard Method does not continue to undermine investment and house building capacity in the region as has been the case in recent years.