The Impact of NPPF’s housing land supply requirements on
housing supply and the countryside

Understanding and Interpreting New CPRE National Office Research

September 2014

Introduction

The National Planning Policy Framework (NPPF) emphasises the need to ‘signficantly boost housing supply’ but also states that ‘sustainable development is the golden thread running through planning policy’. CPRE supports the Government’s aim to meet people’s housing needs, and indeed there is very little in NPPF that, in principle, should give us cause for concern. However, the way that NPPF is being interpreted and applied at a local level is, in our view, generating very significant threats to the countryside without significantly addressing housing need.

CPRE National Office is building firmer evidence of these impacts of NPPF. It has just published a substantial piece of research it commissioned from a major consultant, Parsons Brinckerhoff, entitled: “The impacts of NPPF’s housing land supply requirements on housing supply and on the countryside”. A consultant that regularly works for Government and for the development industry was deliberately selected in order to lend credibility to the findings amongst those audiences, so in a sense it is not aimed at CPRE’s own constituency. It is therefore necessary to draw out the key findings from the research and examine how we apply them to our own work at local level.

What is the problem?

The key issue is the requirement for a 5-year forward supply of housing land (5YLS). This means that each Local Authority must demonstrate that enough land is suitable and available for development at any given time for the amount of housing it aims to deliver over the coming five years, plus a buffer of an additional 5%. Furthermore, if it cannot show a 5YLS then it has to plan for the release of enough sites to provide a 20% buffer. Put simply, if an authority has a shortage of available land then it has to work harder to find more. And if the existing Local Plan does not provide for that scale of housing land supply, then the policies in that plan that affect housing supply are deemed to be out of date. In that case, the ‘presumption in favour of sustainable development’ kicks in, meaning that NPPF’s own policies for determining planning applications apply, without any of the local considerations that would be found in the Local Plan.

So it is easy to see that having a Local Plan which does not adequately provide for a 5YLS makes it difficult for a local authority to refuse planning applications for housing that contravene their existing Local Plan policies. Instead, they have to make a generic judgement of whether a proposal would constitute sustainable development, as defined in NPPF. As a result, since NPPF came into force in 2012 there have been many planning applications across England, where the local authority has refused permission and the applicant has appealed: essentially, the authority and the applicant disagree as to whether the proposal would be sustainable. When a decision goes to appeal it is decided – through the Planning Inspectorate – by central government.

CPRE’s concern is that there has been a rash of applications for housing on greenfield sites, using the lack of a 5YLS as a reason to override existing Local Plan policies, and relying on appeals – or the threat of appeals - to drive through developments that would otherwise be refused, with the result that large amounts of greenfield housing are being approved by Central Government against the wishes of local authorities and local communities.

Therefore CPRE wanted evidence of whether their fears about the impact of the 5YLS were justified and, if so, what changes to planning policy might be needed to address the problem. The Parsons Brinckerhoff report sought to build that evidence by examining all 309 planning appeals from around the country since NPPF was published, to see what effect the 5YLS is having on appeal decisions; and also by studying the ways in which housing supply requirements are being established and tested through plan-making.

Headline Findings

The approach to establishing housing numbers is the most common reason for local plans being withdrawn from the Public Examination process. Typically, this happens either because the methods and data supporting a plan’s proposed housing numbers are called into question, or because local authorities haven’t fulfilled their ‘duty to cooperate’ with neighbouring authorities. There is a lack of clear guidance and benchmarking by which Examination Inspectors can assess the merits of the data or how well authorities have met the duty to cooperate, so there are lengthy – and sometimes fruitless – debates at Public Examination, causing substantial delays to the process.

Since the publication of NPPF there has been a significant increase in both the number and proportion of housing development appeals being allowed..CPRE and other organisations are particularly concerned that this is undermining the plan-led system and the principle of localism. Nearly nine of every ten appeals since NPPF’s publication have been in locations without a 5YLS, and almost three quarters of these were allowed, and in most of these cases the 5YLS issue has been central to the decision.

Although NPPF sought to simplify and speed up the planning process it has, in some places, had the opposite effect, with Local Plans taking longer to prepare and major decisions being made at appeal rather than locally. At the heart of this issue are wranglings over the duty to cooperate and the level of ‘objectively assessed housing need’ (OAN) derived from the Strategic Housing Market Assessment (SHMA).

What does this really mean?

Since NPPF’s publication developers have known that, in authorities without a 5YLS, if their application is rejected by the local authority it is very likely to succeed at appeal. By contrast,in authorities with a 5YLS, the prospects of a successful appeal are low.

On the one hand, this could be seen as evidence of an effective Government policy intervention: a clear incentive to local authorities to provide a 5YLS and therefore have strong local control over development. However there is also a powerful incentive, to developers and landowners of sites that the local authority does not wish to see developed, to demonstrate that there is not a 5YLS. They can do this by delaying the Local Plan process and showing that the previous Local Plan is out of date; and by inflating the required housing numbers against which the 5YLS is measured. Locally at least, our experience is that both these tactics are being used.

The CPRE/Parsons Brinckerhoff report recommends addressing this problem through further guidance and clarification on how the policies should be devised and interpreted, so that the measurements that inform the 5YLS are more transparent and consistent.

On the other hand, the report’s findings can be seen as evidence of a dramatic centralisation of decision-making on planning applications. This is particularly damaging because the speculative push for greenfield development sites tends to be felt most strongly in places where:

  • Market demand is high, so developer interest in the sites is high;
  • Land supply is constrained by environmental and infrastructure issues, and by Green Belt, limiting an authority’s ability to provide a 5YLS;
  • The suitability of sites for development is being hotly debated by the local community through the Local Plan process.

As a result, it is often the proposals to develop controversial sites, where local community concerns are strongest, that are being decided at appeal. The report recommends that “the suitability of sites should be determined through the plan-making process rather than through appeal”. This is a change that we would warmly welcome and have called for in many planning cases, but local authorities would needthe power to defer their decision on a controversial site until the plan-making process had been completed.

What does it mean for the countryside?

The report’s subtitle, ‘The impact of NPPF’s housing land supply requirements on housing supply and the countryside’, covers two different but overlapping issues. The first is whether increasing the supply of land increases the supply of housing: the report does not directly address this, but it is of great concern to CPRE, and warrants further investigation. The second issue is whether the 5YLS requirements have an impact on the countryside, and on this question we can draw some useful findings from the report.

The impact of the5YLS on the countryside depends on the total housing requirement figures against which the 5YLS is measured, and the proportion of proposed sites that are in the countryside. Underpinning this is the relationship between two key pieces of evidence: the SHMA and the SHLAA.

  1. The Strategic Housing Market Assessment (SHMA) describes the quantities, types and tenures of housing needed in each market area, and derives a figure for Objectively Assessed Need (OAN). The Local Plan should aim to meet its OAN, but can plan to provide less (or more) according to local circumstances and constraints, which may include environmental and landscape constraints. However, there is no standard methodology for deriving OAN and no agreed mechanism for weighing other sustainability considerations against housing provision.
  2. The Strategic Housing Land Availability Assessment (SHLAA) is a digest of all the potential development sites in the area, as put forward by landowners and developers. These are generally filtered according to their compatibility with the Local Plan policies (are they in the right place?) and their prospects of being developed (is the site fit for development and is there a willing developer and landowner?) Those sites which score well are likely to go forward as proposed allocations for the Local Plan.

The 5YLS is generally based on combining the capacity sites that already have planning permission with the capacity of allocated sites that have a good prospect of gaining planning permission and being built within 5 years. There are other considerations, which the report concludes also need to be more transparent, including past rates of housing completions. At present, we are often seeing planning appeals where the developer argues that many sites with planning permission are being built so slowly as to not count towards the 5YLS, so it is certain that much better clarity is needed on how the 5YLS is measured.

The larger the total housing figure, then the more land is needed to fulfill the 5YLS, and the greater the likelihood that the local authority will have to reach deeper into its pool of SHLAA sites in order to meet the requirement. Inevitably, this means less sustainable sites coming forward for development, many of which will have impacts on the countryside. A particular problem is that many of these higher impact sites are also those most attractive to developers – greenfield sites in areas of high market demand – which means that they are likely to be developed ahead of more sustainable, lower impact sites. To some degree this problem can be resolved through ‘phasing’ of sites, focusing development on the more sustainable sites first, but Local Plan Inspectors have been resistant to phasing, interpreting it as a potential obstacle to NPPF’s aim to boost supply.

So, in essence, a 5YLS need not be a significant threat to the countryside, if the housing numbers are not inflated and if the filtering process for SHLAA sites is working well.But these are big ‘if’s.

The lack of a5YLS is undoubtedly a much greater threat to the countryside, because it opens the door to greenfield developments in high-market-demand locations being allowed on appeal, against the wishes of the local authority and the community and without regard to an emerging, but incomplete, Local Plan.

Using this Evidence in CPRE’s local work

The significance of the 5YLS can put CPRE branches and local groups in the difficult position of supporting – or not challenging - a Local Plan housing figure that it believes is too high, in order to reduce delays to the Local Plan process and avoid the much worse outcome of a continued hiatus that developers can exploit by gaining permissions on appeal. Challenging the housing figures is also very daunting, due to the complexity and lack of transparency in the evidence. However it is worth trying to do so, because otherwise the only credible stakeholder representations on housing numbers come from developers, who are generally seeking higher and higher numbers.

In campaigning terms it is certainly useful to be able to target our work on the local authorities that lack a 5YLS. We can focus on two specific issues:

  1. Improving our influence on the Local Plan through a critique of the SHMA. To quote the report ‘The objectivity of SHMAs should be taken with caution. The assumptions which they contain mean that they should not be replied upon as a starting point for determining a housing requirement. While they provide some valuable evidence they have the potential, when taken as fact, to encourage housing targets which are unlikely to be realistically met.’
  2. Citing precedent from comparable cases to influence planning application decisions, especially at appeal. In this regard the CPRE / Parsons Brinckerhoff report is very useful, because it uses a series of case studies of planning appeals to show how weight has been accorded to the 5YLS and to a range of other sustainability considerations in the Inspector’s decision. Most importantly these case studies include examples of appeals being dismissed despite the lack of a 5YLS, and may therefore offer clues and precedent evidence. To enable users of this briefing paper to make full use of the case studies, we have reproduced them in full as an appendix to the paper.

We will also update this paper shortly with notes of relevant local cases and decisions.

Andrew Wood, CPRE South Yorkshire, September 2014