1 Final Amended National Planning Policy Framework Published
The final amended version of the new National Planning Policy Framework (2018) was published on the 24th of July 2018 by the Ministry of Housing, Communities and Local Government. This is the first revision of the National Planning Policy Framework since 2012. It implements many reforms announced previously through the Housing White Paper, the ‘Panning for the Right Homes in the Right Places’ Consultation and the draft revised National Planning Policy Framework Consultation.
The final revised NPPF reads very similarly to the consultation draft from earlier this year, with few substantive changes. The most notable changes relate to quite significant changes in relation to viability assessments as part of the planning process, the approach to small sites and a review of the definition of ‘affordable housing’.
Alongside the revised NPPF, the government has also published their response to the Consultation, the final Housing Delivery Test measurement rule book and updated Planning Practice Guidance sections on Viability. The latter reinforces the need for developers to deliver policy compliant levels of affordable housing, and specifies in detail how Local Authorities should be calculating their Housing Need using a standardised methodology in Housing and Economic Development Needs Assessments.
This briefing note sets out a summary of the amendments since the draft NPPF was published, and the likely implications of the newly published documents and guidance.
2 Summary of Key Amendments
2.1 A focus on delivery
Government has made it clear that in applying ‘the presumption’ in favour of sustainable development - where an up to date Local Plan does not exist - Local Authorities must have less than a 3 year supply of deliverable housing sites, and the authority’s delivery must have been at least 45% of that required over the past three years. The additions within paragraph 14, alongside other ongoing Government activity such as the Letwin Review, make it clear that delivery as well as housing targets that meet need are essential.
2.2 Approach to Viability & Financial Viability Assessments
There is an overall intention from government to shift assessing viability to the Local Plan making stage, in an attempt to reduce risk and increase certainty for developer at planning application stage. However, this shift, given the general lack of practical development expertise within Councils’ planning departments is likely to lead to issues with this approach, meaning on the vast majority of sites developers are still likely to want to rely on using their own viability assessments. However the risk in this lies in the new shift of giving weight to viability to the local level. However, interesting to note is that much of the provisions closely reflect those introduced by the Mayor of London, such as introducing review mechanisms, with the exception of the government’s statement that “an assumption of 15-20% may be considered a suitable return to developers”.
2.2.1. Weight given to Viability to be left up to local decision-makers
Most crucially, whereas the original 2012 NPPF placed significant weight on the importance of viability, the revised NPPF leaves the importance given to the viability assessment down to the decision maker (para 57). This appears to introduce a significant shift in the direction from the previously top down high level of emphasis placed on viability, to what seems to be a more bottom-up approach with local decision makers given the power to decide the level of weight given to assessments, with a presumption that viability assessments will not be needed to support applications as a starting point. The effects of this on the ground are likely to be that this gives license to Local Authorities to resist developments coming forward with limited affordable housing, or that contradicts their other policies. This could mean that contrary to the government’s intention of speeding up delivery, that sites are stuck in the planning process longer, due to extended negotiation, or far more refusals where schemes contradict policy.
2.2.2. A stronger stance
The revisions to the NPPF take a much stronger stance on what the role of viability assessments in the planning process should be. Developments will normally be expected to comply with all policy requirements, which is likely to mean a far stricter approach on provision of affordable housing (the definition of which has been changed, as discussed later). This addition to the PPG is abundantly clear, and reinforces a range of recent case law to the same effect: “The price paid for land is not a relevant justification for failing to accord with relevant policies [which we anticipate will usually mean affordable housing policies] in the plan.” This is reiterated repeatedly through the viability section of the NPPF and the associated guidance: “Under no circumstances will the price paid for land be a relevant justification for failing to accord with relevant policies in the plan.” The implications of this would be interesting in relation to future court rulings and planning decisions, as it is very seldom for major, complicated schemes to accord equally with all relevant policies in Local Plans.
2.3 Housing Need and Delivery
2.3.1. Housing Delivery
The Housing Delivery Test rulebook that has been published alongside the new NPPF is a key document. The delivery test itself is quite simple: calculated by delivery in the previous 3 years divided by the local housing target, as a percentage.
Of particular interest is not just the increased emphasis placed on delivery in the rulebook, but also for housing targets which are shown to be older than 5 years, which have not been reviewed and found to be still up to date, the measurement will be done on the basis of housing need. With this, the government continues their tough love approach to ensuring LPAs meet their statutory planning obligations (i.e. that they review and update their Local Plan every 5 years). This a way of incentivising LPAs to ensure that their plans are up to date, to avoid their delivery being measured against their housing need, rather than housing targets. This critical difference will have far reaching impacts, and could be most important in boroughs that have severe policy constraints such as those containing large proportions of Green Belt, where adopted housing targets may differ very significantly from housing needs estimated in their evidence base.
2.3.2. Housing Need
A standardised method of calculating Housing Need has been published. Whilst the methodology itself will be important to grasp, the important aspect for developers and local authorities alike will be to understand how the proposed housing need caps work. This is far from clear, despite best efforts, but as with many other aspects proposes lower caps for LPAs which have up to date local plans (published or reviewed within the last 5 years), again incentivising LPAs to prepare up to date plans, or face ‘sanctions’ in the form of higher housing figures. Important to note, is that the government has made clear that they have taken on board the significant feedback they have had on this aspect of the NPPF in their consultation, and that they intend to review the methodology once relevant household projection figures, a key input forming the basis of their proposed methodology, are released in September 2018.
It is noteworthy that the NPPF requires local authorities to set out housing requirements for designated neighbourhood areas. Where it is not possible to provide a requirement figure, paragraph 66 requires local authorities to provide an indicative figure. This will require local authorities to have a level of detailed understanding of housing need not previously required.
2.4 Delivery of Housing on Small Sites
We are particularly supportive of the principle of encouraging delivery on small sites. However, our feelings towards the changes made are mixed. Whilst many have been lamenting the decrease of the expected proportion of small sites in the final version, there is a crucial detail here which has been overlooked by many - the draft wording initially referred to 20% of sites, whilst the revised NPPF refers to 10% of housing targets. We think this should actually avoid boroughs which rely on a few strategic sites from accordingly delivering only a few small sites. On the other hand, we are highly disappointed to see the categorisation of a ‘small site’ changed from 0.5ha in the draft, up to 1ha in the final NPPF. This not only is starkly different to the approach taken in the draft London Plan, which proposes small sites to be those up to 0.25ha, but will also inevitably mean that the smallest sites, with potential for most innovation are overlooked, and not progressed or supported by stretched local authorities. We are particularly disheartened by this change, which could fundamentally reduce the potential of small site delivery across the nation. We would be curious to see for example, how many sites delivered nationally would already fall beneath this threshold, to understand whether there is likely to any tangible impacts from this watered down emphasis on the size of small sites.
2.5 Car Parking and Transport
We are disappointed to see the policy for removing maximum car parking standards removed for most circumstances, as this is likely to encourage parking provision in excess of current maximum standards and increase reliance on car ownership and use. Not only will this be space inefficient and polluting, impacts such as these are likely to conflict with other ambitions of the plan and undermine its ability to deliver its objectives. However, it is very encouraging to see use of maximum standards in city and town centres, and other areas served by public transport. Another giveaway that reliance on the car is here to stay, in planning policy as much as people’s preferences, is that the definition of “sustainable transport modes”. The definition has been extended to include not just walking, cycling and public transport, but also low and ultra-low emission vehicles, suggesting the shift may not be away from car usage, but from the type of car, with inclusion of electric vehicle charging points becoming far more important on development sites. This likely is joined up with the Governments ‘Road to Zero Strategy’ which follows the Government’s 2016 Industrial Strategy, bracing itself for a post-Brexit Britain, with the ambition to lead the world in zero emission vehicle technology, end the sale of new conventional petrol and diesel cars and vans in the UK by 2040, and see at least half of new cars to be ultra-low emission by 2030.
2.6 Affordable Housing Definition
The far-widened definition of affordable housing will undoubtedly have significant impacts on the industry, with a far greater range of affordable products now able to come forward. Whilst the actual affordability of these products to different segments of the population will obviously be a concern to Local Planning Authorities, the broader definition may help to enable developers to meet affordable housing targets within Local Plans more easily, if proposing more lucrative tenures of affordable housing.
Social Rented Housing: As proponents of the importance of a variety of affordable housing tenures and products, it is positive to see the re-introduction of ‘social rented housing’ within the definition of Affordable Housing contained within the NPPFs Annex 2.
Starter Homes: It is interesting to note the definition also suggests the definition of a ‘Starter Home’ may come about through secondary legislation, not just statute, and it seems likely this secondary legislation is where eligible maximum household incomes will be defined, given the thresholds have been removed from the NPPF itself.
Other affordable routes to home ownership: Of note is that whilst the inclusion ‘low cost homes for sale’ remains, it is unclear what these will actually be as the minimum 20% below market value price reduction has been omitted. Whether a specific threshold is again introduced within secondary legislation at a later stage remains to be seen.
2.7 Planning Performance Agreements and Local Authority Resourcing
Much has been written in the days following its publication about the significant pressure many of the changes introduced will place upon Local Authority planning departments. We undoubtedly agree, and it is interesting to note that for development management the need for Planning Performance Agreements has been emphasised, with the importance of these for large scale strategic site noted within the NPPF itself, rather than remaining encapsulated within extensive online guidance. Whilst this may be one way of LPAs recapturing costs of the increased burdens, it is our experience that the effectiveness of PPAs are incredibly inconsistent between authorities, and is largely determined by the general quality of individual planning departments and key personnel in any case. We see this having little tangible impact, other than encouraging LPAs to seek to obtain more fees from developers, justified by this addition to the NPPF.
2.8 Design Quality
As an organisation we strongly welcome the added emphasis on securing high quality design, as strong advocates of the value of quality place-making. However, much of what the draft NPPF introduced relating to the importance of securing high quality design, (largely unchanged within the final version), as we know from experience will be highly subject to interpretation, given the subjective nature of design quality. However, a more tangible addition relating to design in paragraph 130 adds that LPAs should ensure that design quality is retained from the point of submission to actual delivery, citing changes to the choice of materials as an example.
2.9 Green Infrastructure and Well-being
Whilst not substantive additions since the draft, the new NPPF places greater emphasis on the importance of green infrastructure, it’s need to be interconnected, as well as to play multiple roles, most importantly including the role of Green Infrastructure in promoting well-being. Further to this, a definition of ‘Nature Recovery Networks’ has been added, perhaps alluding to possible emphasis of the need for this green infrastructure to also serve the needs of wildlife.
2.10 Elsewhere in the new NPPF
Elsewhere in the NPPF the use of natural flood management techniques seems to be a new point, as well as balancing harm to heritage assets, against securing their optimum viable use, for developments affecting listed assets. The new NPPF also adds more specificity about the heritage evidence that would be expected to support Local Plans.
Government is also recommending in the modified PPG that S106 agreements should be made publically available using a standard template, as well as recommending LPAs record details of each planning obligation using the standard open data monitoring tool, both of which are said to be published in Autumn 2018. Whilst these are just recommendations, where LPAs follow these (and there is every likelihood that few will, given the many increased burdens introduced through the new NPPF), it is likely to make estimating the anticipated planning obligations associated with proposed developments a much easier and more accurate process.
3 What lies ahead?
Our first reading of the newly published NPPF and our predicted implications are obviously just this – predictions. It remains to be seen how many of the significant changes are interpreted by others in the profession, both in the private and public sector, as well as how aspects of this are considered within planning determinations, appeals, and legal challenges. Despite the revolving doors housing ministers, the general thrust remains relatively consistent since the publication of the Housing White Paper in 2017.
In addition to the newly published NPPF, the government also intends to publish the final Oliver Letwin review on build out rates, as well as Bridget Rosewell’s review of the planning appeal system and process, expected to be published around the same time. The timing of these alongside the Autumn Budget, coupled with the long talked about reform to CIL and Strategic and Local Infrastructure Tariffs, suggest that this may only be the start of further changes set out from as far back as the Housing White Paper, and that other changes may emerge that support and reinforce these first changes we see embodied within the new NPPF. We will be keeping our ear firmly to the ground to make sure we advise our clients of these.
4 What do HTA think about the Revised NPPF?
There are many positive aspects about the revised NPPF. We welcome a greater emphasis on design quality, in particular involving local communities within this, as well as a focus on health and well-being. Local authorities will be under more pressure to be forward thinking and we hope this opens up more opportunities to think about positive growth in partnership. We are disappointed with the watering down of the size threshold of small sites, but we are immensely encouraged by the emphasis on the importance of the possible contribution these sites can bring to housing delivery.
If you have any further questions regarding the above and what it means for your schemes, please contact:
Riette Oosthuizen, Planning Partner