By Ellis Wiggins, Associate Director
Much was made of the Government’s proposals to overhaul the planning system, with many pages of ink and infinitely more pixels devoted to analysing what it will mean for local government and developers.
Published the day before, relatively unnoticed, was a consultation on changes to the Standard Method for calculating local housing need. However, the document has significant ramifications for some areas – and some council administrations.
What are the differences?
The new Standard Method is proposing to mostly calculate an area’s housing need based on the existing amount of housing stock, rather than projections of changes to household numbers. The new calculation will use a baseline of 0.5% of the existing stock in a planning authority area, or household projections, depending on which is bigger. An adjustment is then made to the baseline for how unaffordable housing is in that area if the cost of paying a mortgage is more than four times median local earnings. This uplift includes how the cost-to-wages ratio has changed over the last decade. Finally, the Government is proposing to remove the current cap which is put in place for an authority based on the age of the Local Plan.
Planning and development consultancy Lichfields has analysed the new Standard Method for each local planning authority and has concluded that it will create a national housing need of 337,000 homes a year – compared to 251,000 under the current Standard Method. So far, so good.
How would the new Standard Method affect the Home Counties?
From the perspective of local authorities in the Home Counties, the new Standard Method offers a mixed bag. Some authorities would see a distinct fall in their calculated housing need. North Hertfordshire, for example, would go from 973 homes per annum under the current Standard Method to the slightly more palatable 625 homes a year under the new Method (against an average delivery rate over the last three years of 347 dwellings per year). Similarly, Runnymede in Surrey would drop to 361 houses a year from 531 per annum under the current Standard Method.
However, the vast majority of authorities in the Home Counties are facing increases in their housing need, and a number are being presented with a significant change. Buckinghamshire Council could see a 40% increase under the new Standard Method, while Vale of White Horse could see its housing need increase by 118%. The implications of this are huge for communities already concerned about infrastructure deficits and which are increasingly vocal in their opposition.
It is perhaps no surprise that serious concerns among local planning authorities have already surfaced. Conservative councils which fear the implications at the next elections are breaking ranks to condemn their higher housing numbers. Wokingham Borough Council’s Conservative Leader has started a petition against the borough’s proposed 107% increase in its housing need under the new Standard Method – off the back of threatening to protest naked down Whitehall in a bid to reduce the borough’s housing numbers.
This presents a serious problem for the Government. Conservative councillors unhappy about their proposed housing need assessments will not hesitate to bring pressure to bear on local Conservative MPs, who will in turn start voicing their concern to ministers at MHCLG. The 2019 intake of backbenchers in the Conservative parliamentary party has shown itself very willing to threaten rebellion and has forced the Government into a series of U-turns over the last nine months. The Secretary of State’s failure to carry councils with him runs the risk of Ministers being forced into yet another last minute climbdown if the discontent coming from the Conservatives’ electoral heartlands continues to go unaddressed at this early stage.
A health warning
It is also worth emphasising that the Government has set out in the Planning for the Future White Paper that it intends to eventually revise the new Standard Method so that it is binding, calculated centrally and factors in land constraints and opportunities to distribute housing across the country. This upgraded new Standard Method is partly designed to help Whitehall achieve its ‘levelling up’ agenda in Northern “red wall” seats which recently switched to the Conservatives. This means that the new Standard Method could become mandatory in a few years.
The Government is setting itself up for a likely controversy on a policy change which, while positive for developers, could alienate itself from local authorities. The Secretary of State will need to carefully consider how to placate these councils while ensuring that sufficient levels of new housing are delivered or face a whole new round of formerly Conservative councils falling to opposition parties.