Autumn Budget Announced
The chancellor’s Autumn Budget was published on 22 November 2017. The Budget sets out the economic plan for the country. The autumn budget was the first of its kind, following the abolition of the Autumn Statement on recommendations from the Institute for Fiscal Studies (IFS). In the 2016 Autumn Statement it was announced that, following the 2017 Spring Budget, Budgets will be delivered in the Autumn rather than in March or April of each year.
As part of the budget a number of announcements were made which are of particular significance to housing, land and planning, including funding packages to incentivise certain forms of housing delivery, as well as proposed planning reforms which the government will consult upon.
Summary of Key Implications for Housing and Planning
HTA Design’s planning team have reviewed the Autumn budget, and produced a brief summary the implications for our sector. Housing was clearly at the top of the agenda, with house-building positioned as the first actions across a range of areas, above even Brexit.
Financial Packages to support housing
The government has set out its intention to:
• Make available £15.3billion of new financial support for housing over the next 5 years;
• Introduce planning reforms that will ensure more land is available for housing; and
• Provide £204 million of funding for innovation and skills in the construction sector.
In terms of investment there are vast amounts committed to being spent to facilitate delivery of new homes. The Budget proposes to bring together public and private capital for delivery of five new garden towns around the South East and provides a £630million commitment for infrastructure and remediation on small sites. Similarly as was the case with the Housing White Paper, despite being a budget intended to serve the needs of the whole nation, the focus is very much on the South East or other urban areas beyond. Rural development gets very little mention. There also appears to be government recognition that both developers and local communities want to see infrastructure in place that should accompany growth. Notably, the level of investment committed to estate regeneration is very small in comparison to other funding packages, and therefore would suggest there is an intention to shift the focus in emphasis.
Proposed Planning Reforms
The budget confirms the government’s commitment to maintain existing protections for the Green Belt. The government are proposing to consult on a number of planning reforms including:
- Deallocating sites from Local Plans where there is no prospect of a planning application being made, which could make significant changes to the estimated housing land supply figures of many authorities, and therefore potentially increase the likelihood of gaining planning consent on other unallocated sites in sustainable locations;
- Placing an expectation on local authorities to permit land outside that which is allocated within Local Plans for ‘first time buyer led developments.’ This is effectively the previously proposed starter homes policy in another guise. It reiterates such a policy would not be justification for development in the Green Belt.
- There is a focus on increasing density in urban areas, with the government also proposing to consult on a range of measures including:
Minimum densities for housing development in city centres and around transport hubs;
Policy changes to support the conversion of space above shops, to convert retail and employment land into housing, and a Permitted Development Right to allow commercial buildings to be demolished and replaced with homes. The latter could see many redundant retail buildings transformed into housing, in a similar fashion to the office to residential conversion Permitted Development rights.
The Government also appears to have reacted to calls to investigate the discrepancy between planning permissions and build outs of housing models, setting out its intention to set up a Panel to review this particular issue, which will be chaired by Sir Oliver Letwin . Interim findings will be published alongside the Spring Statement, and the final findings will be reported in Autumn 2018. Whilst this is a concrete action there are a number of other reforms the Government has set out their intention to consult on, including tougher housing delivery tests, expecting 20% of housing delivery to come from small sites and removing deemed discharge exemptions rules. It is difficult to see how the latter would be possible, as the deemed discharge process is already pretty much cut down to just strategic issues for statutory consultees. The focus on small sites also echoes the ambition within the recently published Draft London Plan, indicating there is perhaps a certain level of joined up thinking between the GLA and DCLG.
Whilst the proposition to consult on various measures is welcomed, it offers no firm commitment of action on any of these issues. If the proposed changes do come forward it is likely they may come forward as part of a revised National Planning Policy Framework, which would be re-written for the first time since its original publication in 2012.
The budget also proposes to consult on changes to CIL including:
- Allowing LPAs to set rates based on land value uplifts dependent on existing use class, not just proposed. This could be to support the proposed measures to encourage non-residential to residential schemes.
- Changing CIL indexation to reflect house price inflation rather than build costs. It is unclear how this would be implemented geographically- for example it would need to be understood what data it is that is being relied on, and also how house price inflation is different across the country.
HTA Design’s Perspective
We are encouraged to see an increased urgency from central government to ensure new homes are delivered. However, we believe that the emphasis should not only be on the quantity of homes that need to be built, but on the types of homes that would be suitable to those who are trying to access the housing market and establish themselves in a community as well as the quality of the homes.