The revised National Planning Policy Framework (NPPF)
So what’s new?
Following the publication of the consultation draft earlier in March this year, the Ministry of Housing Communities & Local Government (MHCLG) published the revised NPPF just as Parliament went into its summer recess at the end of July. Very predictably, nothing very much has changed between the March and July versions. There are some subtle changes, however nothing very new.
If we cast our minds back, we will recall the original role of the NPPF. It was intended to help simplify the English planning system. It was intended to make planning more accessible to non-planning experts. It replaced the National Planning Policy Guidance (PPGs) and swept away the thousands of pages of apparently inaccessible (to ordinary folk) policy guidance – being replaced by a single document.
Not so. It immediately became apparent that an on-line explanation would be needed. Hence the National Planning Practice Guidance (NPPG) was launched; at first this couldn’t even be printed as it was regarded as a minimalist response needing to maintain adherence to the Government’s polemic that planning needs to be simplified; its all too complicated so let’s simplify it. If only. It has now been expanded well beyond anything previously envisaged and in total must, in combination with the NPPF and related documents, exceed everything once contained within the PPGs etc.
Those of us as concerned with earlier “simplifications” of the English Planning system i.e. the abandonment of Regional Planning Guidance, Structure Plans and Local Plans and replacement with a “suite of planning documents” under the 2004 Act, regarded the NPPF as yet another attempt to “fix” the problems associated with the planning process. Ironically the extent of structure and local plan coverage had just reached an all-time high the moment the system was changed. The “suite of planning documents” introduced under the Local Development Framework has failed as many professionals acknowledged it would. It is taking a very long time to recover the extent of plan coverage previously achieved under the old regime. Many local planning authorities which sought to respond quickly and achieve adopted plans under the new regime, ironically got caught out by retrospective advice and guidance issued by the former ODPM.
Predictably, simplification leads to the inevitable need for interpretation. The courts have therefore spent a considerable amount of time getting to grips with how national planning policy should be applied since first published in March 2012. The meaning of NPPF paragraphs 14 and 49 (regarding housing land supply) for instance, took some five years to finally reach the attention of the Supreme Court. Paragraph 14 was universally regarded as the most significant element of the original NPPF.
Paragraph 14 has now become paragraph 11 in the revised NPPF. If we take this change as an example of how the unintended consequences of simplification in fact lead to complication you need look no further than the reworked text of this, seemingly settled mechanism. When is a development plan out-of-date? In the case of housing this was previously the subject of paragraph 49 i.e. when the local planning authority could not demonstrate a five-year supply of deliverable housing sites and therefore those policies relevant to the supply of housing were out-of-date. The matter has moved on in that the MHCLG has also announced that local authorities with up-to-date local plans should start using the standard method immediately when considering their housing land supply positions. But what happens in circumstances where some local plans are found out-of-date under the “old” methodology but up-to-date under the new? Will the “transitional arrangements” help?
Deliverability of Sites – Tests and Shortfalls
For those local authorities with out-of-date local plans, paragraph 11 of the new NPPF relies on a footnote to explain how this might work. It advises that for housing, out-datedness is where the local planning authority cannot demonstrate a five-year supply of deliverable housing sites (with the appropriate buffer); or where the Housing Delivery Test indicates that the delivery of housing was substantially below (less than 75%) the housing requirement over the previous three years.
The simple question is therefore whether a local planning authority’s failure to meet either test results in out-datedness or does it need to fail both? While we will not have the (adjusted) Housing Delivery Test results for each local authority area until at least this November (and then annually) which is a tall order for already overstretched and under resourced planning authorities, herein lies new uncertainty. Paragraph 73 seemingly adds to the confusion.
Why is there for instance any need to apply a 5% buffer to ensure choice and competition in the market for housing land when in order to demonstrate a 5 year-supply of deliverable sites a 10% buffer is the starting point? If a local planning authority is to maintain a 5-year supply (as would seem to still be required to avoid development plan out-datedness) then surely 10% will be the starting point?
The trigger point for local planning authority action in rectifying land supply shortfalls will be where (paragraph75), the annually published Delivery Test indicates that delivery has fallen below 95%. For the purposes of footnote 7 however, the threshold for testing a local plan’s out-datedness (paragraph 11) will be phased in between 2018 and 2020. The intention being to enable local planning authorities to literally get “their houses in order” before taking full effect at a level of 75% delivery of the three-year requirement from 2020. This means that over a period of the previous three years from:
- November 2018 delivery was below 25% of the requirement. At least 75% of the requirement was therefore undelivered within the three-year period.
- November 2019 delivery was below 45% of the requirement. At least 55% of the requirement was undelivered within the three-year period.
- November 2020 and in subsequent years delivery was below 75% of the requirement. At least 25% of the requirement was undelivered within the three-year period.
This is why there is surely a need to be clear about where the test of an absence of a 5-year residential land supply under the terms of paragraph 11 now lies. Does it remain a single test capable of demonstrating out-datedness even if the delivery test is passed?
Government Housing Delivery Targets
Another serious conundrum facing the Government however is whether its housing target of delivering 300,000 new homes per year by the mid-2020s will actually be supported by more recent population projections. This fundamental element of its new standard methodology intended for use in calculating a local planning authority’s minimum housing requirement may result in a materially lower national annual target.
The MHCLG is therefore currently considering how to deal with a potentially lower than previously forecast annual target once the latest household formation projections are released in September 2018. The MHCLG will then consider adjusting the standard method to maintain consistency with the annual target of 300,000 dwellings per year. Surely this defeats the purpose of a standard methodology unless Government policy is to positively reflect years of consistent under-provision of new homes which some have attempted to write-off in the past.
In the mean-time the inevitable consequence is that some planning authorities will simply stall the formulation of their new local plans pending a clearer understanding of the way in which the new standard methodology will work and its consequences. The house building industry is left sitting on the side-line facing more uncertainty in its strategic longer-term business forecasting and land promotion planning. In all of this, the ever-present concerns regarding the costing, funding and delivery of “big ticket” social and physical infrastructure to support new homes will remain uncertain. Any economic viability assumptions in this context will remain critical. Land assembly, residual land value assumptions and the ability of landowners and developers to currently see any predictability therefore remains an issue of fundamental concern.
Testing Site Viability
The essential understanding of development site viability within the allocation process is now coming to the fore. Those of us familiar with the viability testing process know full well how complicated and vulnerable to changing economic circumstances viability is to firstly calculate (many still regard it as a “dark art”) and secondly to predict over anything other than the short-term. Up-to-date policies must make clear the contributions expected from development which consequently will require scrutiny of development economics at the drafting of allocations stage if it has to have any meaningful effect.
While the revised NPPF has, to an extent acknowledged the realities in this matter, nevertheless paragraph 57 makes clear that allocations in up-to-date allocations “…should be assumed to be viable…”. Any viability issues subsequently raised will need to demonstrate a material change in the economic circumstances of the site since that plan came into force. Unallocated sites under consideration may also be supported with viability assessments.
Defining Major Development
The term “major development” is defined as, in the case of housing, where sites are of 0.5 ha or more, or involve 10 or more homes. No doubt to the relief of local planning authorities such as Cotswold District, this term will not apply within AONBs, National Parks and the Broads where exceptional circumstances would have had to justify even modestly scaled housing allocations as seemed likely from the text of the earlier draft published in March.
There are other tweaks and changes made to the NPPF which no doubt others will highlight. In reality however will these latest changes really improve the English Planning system? Will they assist in boosting significantly the supply of homes?
Any clarification through revision must be welcomed. As set out above there would still appear to be anomalies and conundrums which have been created and will no doubt require time, further clarification and court appearances to resolve. Perhaps by 2023 all will become clear? In the mean-time it seems highly unlikely that the underlying tension between national level policy and local level politics – which lies at the heart of the delivery issue, will change at all. The house building industry is reduced to the status of a “very concerned spectator” in that matter. It seems highly likely that local political resistance to development will continue to thwart the national interest in delivering substantially more new homes. What is needed is a change of political culture and attitudes toward house building and a return to the consensus that once existed in that everyone deserves a decent home.