Select Committee on Transport, Local Government and the Regions Memoranda

Memorandum by The House Builders Federation (PGP 17)



  The House Builders Federation is the trade association that represents private sector house builders in England and Wales. Our members account for 80 per cent of new homes built each year. HBF believes that reform of the planning system is key to ensuring that everyone has access to a decent home and to support economic growth and prosperity.

  In 2001, there were 162,000 housing completions in Great Britain—the lowest peacetime level since 1924. This low level of new housing provision must be set against increasing household growth, the result of deep-seated social and demographic changes and international migration.

  In 1981 there were approximately 4 per cent more dwellings than households in England, just sufficient to provide a home for every household and leave a margin for vacant dwellings. In the last 20 years, household growth has exceeded expansion of the housing stock, so the surplus had fallen to 0.2 per cent by 2000. The situation in the South is particularly acute: in 2000 there were 4.2 per cent fewer homes in London than households and 1.4 per cent fewer homes than households in the South East.

  New households in England are being created at a rate of approximately 200,000 per year, with new dwellings built at a rate of around 140,000 per year. As a result not everyone who wants a home can be accommodated. The supply of dwellings is not meeting demand, and without a greatly improved planning system this situation is set to worsen for the foreseeable future.

  The effects of this long-term under-investment in housing are already being felt. The widening gap between supply and demand leads to ever-increasing prices, particularly in economically buoyant areas such as London and the South East. This limits labour mobility and has an inflationary impact on wages. As housing becomes more expensive the young and those on low to moderate incomes are left with little housing choice.

  Housing has a vital contribution to make to the economy. It contributes to social cohesion, helps create stable and safe communities and, when planned effectively, can assist sustainable development. Like the railways and the NHS, it cannot be turned round by short bursts of unsustained investment or quick fixes. It needs long-term investment and political commitment backed up by efficiency created through an effective planning system.

  In this context the recognition by Government of the need for reform of the planning system is welcome, as is the shared commitment to bring greater simplicity, speed, predictability and customer focus to the system.


  The fundamental concern of house builders is that the planning system releases enough land in the right place at the right time to ensure the opportunity of a decent home for all.

  There remains concern that without greater clarification on the respective roles of the proposed regional, sub-regional and local plans it is uncertain whether the proposed system will achieve this fundamental objective.

  HBF supports the principle of Regional Spatial Strategies (RSS) and the objectives for such strategies as set out in the planning green paper. The processes set out in the current PPG11 are directly transferable to the production of these strategies, thus ensuring consistency with the existing regional planning guidance. Similarly, HBF does not object to the abolition of county-based structure plans.

  However, there is great concern within the house building industry that the gap between RSSs and Local Development Frameworks (LDFs) is too great to ensure that housing numbers, set at the regional level, are accepted by local planning authorities as legitimate and appropriate sites are identified. Put simply, it is unclear how the new system will distribute regional housing requirements to individual local authorities and ensure they are enforced.

  In the absence of elected regional assemblies it is vital that Government provides a strong steer to regions on the required level of housing provision. This will ensure that new housing has both political legitimacy and is seen as vital in achieving national policy objectives. The regional planning body must in turn distribute housing provision figures for sub-regions (based either on county or urban catchment areas). It is at this level where sub-regional strategies will be essential in ensuring that responsibility for housing provision is not lost in the new system. Stronger guidance from Government is essential.


  The HBF agrees with a number of the criticisms of the current arrangements for area-wide local plans. In particular the current system is overly complex, and inconsistent. Plans are too long and inflexible and preparation timetables are too lengthy.

  An LDF that contains only core policies that establish criteria against which development proposals are considered would be shorter and less complex than current requirements for structure plans and local plans. However, the plan-led system, which the Government remains committed to, must provide certainty for both developers and communities about what is planned for a particular area.

  HBF is concerned that a Local Development Framework (LDF) that does not specifically identify land for development, and is subject to constant review, will be unable to provide this level of certainty.

  House builders are particularly concerned that the proposed planning system will fail to deliver enough land for development, and will be less comprehensible to those wishing to develop and for local communities who rightly want to know where development and change will occur. A constantly changing strategy will fail to deliver the certainty that developers need. This is particularly true in regeneration areas where developers and other investors need the confidence of continued local authority support. Constant review and change of political will may jeopardise regeneration.

  If LDFs are to be successful they must establish the long-term vision for an area and should be adopted for a minimum of three years. If action plans are to provide the same level of certainty and clarity as the current system of local plans then action plans must be produced speedily and in conjunction with LDFs.

  In addition action plans must be adopted for a realistic period if they are to achieve their objectives. In some instances, for example large-scale regeneration or the establishment of a sustainable urban extension, this might be for a period of 10 years with review only occurring where monitoring indicates that a particular project is not achieving the aims and objectives of the plan.

  There remains considerable concern that many local authorities will be keen to adopt their LDF, and establish principles for development in their administrative area, but will be reluctant to undertake the more politically difficult site or area specific action plans. Without the political will from local authorities, backed by the appropriate mix of skills and resources, there is significant danger that action plans will suffer similar delays to the current local plan procedures. If local authorities fail to maintain the new planning frameworks real incentives, sanctions and penalties must be utilised.


  An effective planning system would ensure certainty for business and the public whilst at the same time delivering speedy decisions. A number of concerns have already been raised regarding the extent to which the major changes proposed to development plans will achieve these aims.

  However, discussions within the broader business community have identified additional areas of common concern. Perhaps the most fundamental worry is what happens to the planning system during the interim period between the publication of the green paper and the eventual introduction of a new planning system. Ministers must ensure that local authorities continue to produce local and structure plans and that these are "mapped" onto the new structures. Without continuity in the development plan framework there is significant risk of paralysis, with no clear and coherent basis on which to make decisions. In addition, many of the Government's proposals do not require primary legislation and should be implemented immediately.

  House builders support the principle of improving public participation in the planning system. However, it must be recognised that to achieve national objectives, such as meeting household growth, there must be clearer standards on participation to limit the ability of single-issue pressure groups to oppose development. Consensus is not always possible.

  Therefore to ensure that public engagement does not lengthen planning timetables, whilst simultaneously failing to achieve consensus, it is important that Government retains independent scrutiny. Public examination of plans ensures visibility of the public in the scrutiny of local authorities plan preparation. In addition, if independent scrutiny is to both effectively engage the public and ensure certainty then the decisions of the independent chair or inspector should be made binding.

  The gulf of understanding between house builders and planning professionals is a significant problem. The promotion of positive planning requires long-term cultural change in the planning service, an issue that is not adequately addressed in the reform package. In addition, positive planning will require local planning authorities to acquire a broader range of skills and Government must address this, alongside the professional bodies and educational providers. Business does not object to investing greater resources in the planning system, through higher planning fees and other charges, for measurable improvements in service. We believe Government must do the same. Government must recognise that planning is a key public service and fund it accordingly.

  The planning green paper also contains some proposals that are business unfriendly. Businesses submit twin applications to counter acknowledged delays in the system. If the objectives of improved quality and speed of decision making were achieved then the process would be self-regulating. Removing this leaves business powerless in the process.

  In addition, the proposal to end outline-planning consents is damaging to business and fails to recognise the importance that investors place on limiting risk. It is highly questionable whether the proposed certification scheme will provide the certainty needed by investors and sought by Government.


  House builders welcome the Government's commitment to greater transparency and certainty in the system of planning obligations. However, there is strong opposition to the Government's proposals for a new tariff-based system.

  Our objection to the tariff system is fundamental. By breaking the link between an individual development and planning obligation the Government is seeking to meet national objectives through a locally administered tax. Yet the consultation paper fails to provide any reason why the accepted need for public investment should be funded by a tax on development, rather than from general public investment. Instead the tariff is based on the entirely negative view that communities need "compensating" for accepting the investment in jobs, housing and transport needed to underpin a competitive economy.

  The tariff system is socially divisive. If implemented as proposed the greatest community benefits would be felt in areas that are already affluent and so increase disparities within and between regions. In regeneration areas the levying of a tariff is likely to sterilise sites where development itself could be seen as planning gain.

  The tariff will also fail to deliver Government objectives for greater certainty. It is clear that in many instances local authorities will require a planning obligation in addition to the payment of a tariff. In short the Government is proposing a tariff plus a planning obligation.

  Finally, house builders and other developers cannot be expected to foot the bill for the country's long-term investment in social housing. Increasing the percentage of affordable housing on an individual site does nothing to help meet the fundamental problem of under-supply.

  The only acceptable mechanism for planning obligations especially if we are to improve the public's perception of the planning system, is for Government to retain the link between an individual development, planning obligation and planning consent.


  One of the key Government priorities is to achieve an urban renaissance. The house building industry must help deliver this objective by bringing forward brownfield sites while maintaining housing supply.

  We believe urgent action is necessary to achieve this. Current Government policy in PPG 3 has restricted the industry's output from greenfield sites as a result of the sequential approach and the review of allocated housing land. Outline housing starts and completions are falling to record low levels.

  Brownfield sites must compensate for this restriction in supply, but sites are not coming forward at anything like the scale necessary to meet Government targets. This is due to obstruction and delay.

  There are some key additional measures we would advocate for Government to bring forward brownfield sites, most of which require changes in policy rather than new legislation. These are:

  1.  a presumption in favour of the release of brownfield sites for housing;

  2.  new guidance to restrict planning obligations where they would damage the economic viability or quality of residential schemes (including the detailed requirements of PPG 3);

  3.  moves to prioritise the use of urban land for housing, including measures to prevent the unreasonable retention of land uses for which there is no effective demand (particularly employment land);

  4.  a guarantee from Government that brownfield sites will not be held back because they are premature to the completion of development plans; and finally,

  5.  fast track appeals for brownfield sites.

March 2002

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