Abolition of Regional Spatial Strategies

Memorandum from the Department for Communities and Local Government (ARSS 148)

Executive Summary

· Regional Strategies were established by the previous administration to coordinate some regional planning issues, including targets for housing growth. Opposition to Regional Strategies has been significant creating uncertainty, delay and unnecessary expense.

· The Coalition Government revoked Regional Strategies on 6 July. This is a major step in shifting power on planning and housing back to local authorities and communities.

· Housing targets were all stick no carrot. They were an ineffective incentive for housing delivery. By contrast the New Homes Bonus scheme will directly reward councils and communities for new homes built. Operating alongside other incentives and funding it will really support locally driven sustainable growth and development.

· Our proposed duty to cooperate will ensure that authorities and other bodies work together effectively on cross boundary issues, particularly on infrastructure planning and delivery. We are also looking at ways to offer authorities who want to work together more formally the option of developing strategic plans with statutory status.

· Where they are established, local enterprise partnerships will provide strategic leadership in setting local economic priorities and creating the right environment for business and growth. They will have a close relationship with strategic planning, particularly in terms of local economic development and regeneration.

· There are solid arrangements in place for storing and managing data held by the former Leaders’ Boards. Updating this information will now be a matter for local authorities individually or working in partnership with others.

· Our proposals will decentralise decision making and incentivise development. This will be with the support of local communities as proponents of sustainable growth. This is what the planning system was designed to do and what it can deliver again.

Introduction

1. The Planning system has enormous potential to provide a positive, effective framework for delivering sustainable development that reflects the aspirations of local communities. But the system that we inherited from the previous administration needs to be radically transformed if it is to achieve that potential. The regional planning system was over-centralised and bureaucratic. Top-down targets, such as housing numbers, were imposed on local planning authorities and communities and they increased opposition to development. What is significant is that they have failed to incentivise the delivery of new homes and this has led to worsening affordability. The Regional Strategy system, however well-intentioned, simply has not worked.

2. With the abolition of Regional Strategies decision making on housing and planning will return to local authorities and communities. This marks the first step towards a new, decentralised approach to planning, giving communities the greatest possible opportunity to have their say and manage development so that it delivers their vision for neighbourhoods. Our proposed incentives will provide a genuinely effective response to housing demand where local people can become proponents, rather than opponents, of sustainable economic and housing growth.

Background to Regional Strategies

3. Regional Strategies were established by the previous administration. They combined two formerly separate strategies: the Regional Spatial Strategy and the Regional Economic Strategy. Since 1 April 2010 any revised strategies had to be prepared jointly by Leaders’ Boards (leaders of representative local authorities in each region) and Regional Development Agencies.

4. The rationale for a regional planning tier was the need to coordinate some planning issues, such as infrastructure and strategic growth, above district and county level and to set targets for growth including housing delivery. Regional Strategy housing targets were seen as the means of delivering the previous administration’s national target of 240,000 net additional dwellings per year by 2016 leading to 2 million new homes by 2016 and a further 1 million by 2020.

5. But public opposition to regional planning has been significant and the process has been beset by legal challenges. The number of representations to Regional Strategy "Examinations in Public" ran into thousands. Key issues were opposition to growth plans and additional housing development. Other issues included retail hierarchies, transport, flooding, and climate change. It is clear from this level of opposition that Regional Strategies did not reflect local community aspirations. But the opposition generated has also meant that Regional Strategies were badly delayed and expensive to produce. The delay and uncertainty meant that they failed to provide a clear basis for planning and investment decisions.

6. To give one example, in the East of England the Government Office received 21,500 representations on the draft Regional Spatial Strategy, of which most (78%) were objections. These focused on four policies around which there had been public campaigns: green belt, housing provision, the Harlow Key Centre for Development and Change, and the London Arc. While the draft plan was submitted to the Secretary of State in December 2004 the final Regional Spatial Strategy was not published until 2008, only for the High Court to rule that it failed to meet Strategic Environmental Assessment Directive requirements with respect to three towns.

The Coalition Government’s Response

7. The failure of regional planning led both the Conservative and Liberal Democrat parties to commit in their manifestos to abolishing regional planning and/or regional housing targets. This led to the Coalition Agreement commitment:

We will rapidly abolish Regional Spatial Strategies and return decision-making powers on housing and planning to local councils… In the longer term, we will radically reform the planning system to give neighbourhoods far more ability to determine the shape of the places in which their inhabitants live, based on the principles set out in the Conservative Party publication Open Source Planning.

(The Coalition: Our Programme for Government 2010, p11)

8. Since the election we have revoked Regional Strategies and announced our intention to return decision-making powers on housing and planning to local councils. The Localism Bill will include this and other measures to shift power back to individuals, communities and councils and give local communities a real voice in shaping their neighbourhoods.

The implications of the abolition of regional house building targets for levels of housing development

9. The previous administration’s housing target-setting regime was not effective. A key weakness of its approach was the assumption that imposed housing targets would be incorporated into plans by local authorities and communities, and that the market would deliver them. It is clear that this has not happened.

10. Under Regional Strategies local plans did not flow thick and fast. Only 18% of local planning authorities - that is 60 out of 336 – have adopted core strategies setting up-to-date targets for housing delivery.

11. On average 26,000 fewer homes were built each year from 1997 to 2009 than in the period from 1979 to 1996. The country now has the lowest level of house-building in peacetime since 1924.

12. There are, of course, a number of factors that influence the supply of housing. For example, in earlier decades, large levels of social housing completions contributed to overall supply. Housing delivery will also be affected by wider economic cycles. Mechanisms to incentivise housing delivery may not be able to reverse external factors such as these in their entirety. But it is reasonable to expect them to act as robust tools capable of effectively responding to cyclical external pressures.

13. Our proposals will stimulate housing development. By abolishing Regional Strategies local planning authorities will be able to work with communities to see their vision for development realised. A key element of this will be decisions about housing and planning policy, including housing numbers and the pattern of development, which should rightly be taken locally.

14. Our decentralised approach will mean that local plans are more, not less important because they will deliver the sorts of projects that people want and support. It is vital that local planning authorities continue to bring forward local plans and we issued guidance when we announced the revocation of Regional Strategies to assist them on some transitional issues. Through powerful incentives rather than weak targets communities will for the first time be able to see real, direct benefits from the planning system.

The likely effectiveness of the Government’s plan to incentivise local communities to accept new housing development, and the nature and level of the incentives which will need to be put in place to ensure an adequate long term supply of housing.

15. Housing targets were all stick and no carrot. Local communities saw only the costs of new development, such as increased traffic and more burdens on local services, without sharing in any of the benefits that accepting new homes can bring.

16. The Housing and Planning Delivery Grant (HPDG) was introduced by the previous administration to incentivise housing delivery. But it was not successful because it was too complicated and target driven. Local authorities were not able to rely on it as a sufficient and stable incentive and as a result its impact was significantly reduced.

17. The Coalition Agreement makes a clear commitment to providing local authorities with real incentives to build new homes. The New Homes Bonus scheme will directly reward councils for new homes built, and there will be a consultation on the detail of the scheme later this year. These incentives will enable local authorities and communities to really benefit from delivering the housing that they want and need and encourage them to increase their aspirations for housing and economic growth, and to control the way in which villages, towns and cities develop and the quality of their local environment.

18. Councils who take action now to give planning consent and support the construction of new homes will receive substantial funding for doing so. These funds can be spent according to local wishes - such as offering council tax discounts to local residents, supporting frontline services like rubbish collections, or improving local facilities like playgrounds and parks.

19. Incentives to build new homes are the cornerstone of the Government’s housing supply strategy. However, the Government recognises that sustainable development is about more than just new homes and the Coalition Agreement sets out our clear intention to incentivise both housing and economic growth. The New Homes Bonus Scheme is part of a wider family of incentives and funding programmes, aimed at facilitating and incentivising locally-driven growth in a post-targets world:

· We will be publishing a White Paper to consider the most appropriate framework of incentives for local authorities to support growth, including exploring options for business rate incentives, allowing local authorities to reinvest the benefits of growth into local communities.

· We are committed to ensuring an appropriate mechanism for securing funding from development proposals to deliver the infrastructure necessary to support growth. We are considering the future of the Community Infrastructure Levy (CIL) and the related planning obligations regime (also known as section 106 agreements) and will make an announcement on these as soon as practicable.

· We are also working on the redesign of growth funding provided by the Department to priority growth areas. Growth funding currently provides a block grant which is designed to enable upfront infrastructure required to facilitate housing delivery to be put in place in growth locations. Although there is a good rationale for the growth funding programme, in future recipients will need to meet the following tests:

Ø Securing real local and community engagement

Ø Making the benefits of growth funding visible to local residents

Ø A robust locally owned vision for housing growth

These tests are currently being applied, with funding for 2010/2011 being released upon a satisfactory response from each of the growth locations.

The arrangements which should be put in place to ensure appropriate cooperation between local planning authorities on matters formerly covered by regional spatial strategies (e.g. waste, minerals, flooding, the natural environment, renewable energy etc)

20. The Conservative Party publication Open Source Planning acknowledges that there will be a need for coordination at a level higher than individual local planning authorities, particularly in planning and delivering infrastructure. The Government recognises that local authorities and county councils will want to work together and make strategic planning decisions on issues that cross boundaries such as green belt, biodiversity, flooding, retail markets etc.

21. Authorities are free to work together on cross boundary issues and many already do. The Government does not wish to dictate when and how authorities should work together. That is for them to decide. But we believe that it would be helpful to offer authorities who want work together more formally the option of developing strategic planning frameworks with statutory status. Having an agreed planning approach across neighbouring authorities on issues such as infrastructure, employment, transport, infrastructure, or the natural environment will provide certainty for all parties engaged in the planning process and help to attract investors

The adequacy of proposals already put forward by the Government, including a proposed duty to cooperate and the suggestion that local enterprise partnerships may fulfil a planning function.

22. Open Source Planning acknowledges that local authorities must have access to all the relevant information concerning proposed development so that they can anticipate the nature and dimension of future infrastructure needs. Timely access to the best available information is vital for authorities to make planning and investment decisions. Too often, however, authorities can be hampered by insufficient sharing of information between the relevant bodies regarding current and potential future development. The Government is committed to opening up information flows between public bodies and utility companies so that all the relevant development information, including plans produced by these bodies, is shared. We have already committed to legislating for a ‘Duty to Cooperate’ to apply to local authorities and other public bodies to achieve this. This will also support joint working on development plans and work by local authorities on cross boundary issues.

23. The Government is also encouraging local authorities and businesses to work together to support their local economies. We have written to local authority leaders and business inviting them to submit proposals for local enterprise partnerships which will replace Regional Development Agencies. Local enterprise partnerships will be central to the Government’s economic vision of rebalancing the economy toward the private sector.

24. We are encouraging a wide range of ideas but we anticipate that local enterprise partnerships will comprise both local authorities and business with a prominent business leader chairing the board. We also expect that partnerships will reflect the natural economic geography of the areas they serve – covering the real functional economic and travel to work areas – rather than existing administrative boundaries. Partnerships will want to provide strategic leadership in setting local economic priorities and creating the right environment for business and growth by tackling issues such as planning, housing, local transport, employment, enterprise and the transition to the low carbon economy. This suggests a close relationship with any strategic planning frameworks that are brought forward, particularly in terms of local economies.

25. The Government will be publishing a White Paper on sub-national economic growth which will set out more broadly our approach to economic growth, including the key role of local enterprise partnerships.

How the data and research collated by the now abolished Regional Local Authority Leaders’ Boards should be made available to local authorities, and what arrangements should be put in place to ensure effective updating of that research and collection of further research on matters crossing local authority boundaries.

26. It is very important that local authorities capture, store and make available the information held by the Leaders’ Boards. For this reason we have asked Leaders’ Boards to demonstrate effective arrangements for the handover and management of data as part of their transition plans. Local authorities in all eight regions outside London are putting in place arrangements for the safe long term storage of data and information. These arrangements are well developed in all regions. In some regions the National Archive has taken a "snapshot" of the information held in electronic format, in addition to the arrangements being made by local authorities.

27. Updating data and research will now be a matter for local authorities and we expect them to start putting their own arrangements in place for the collection and analysis of evidence. Where local authorities found particular data valuable they may choose to continue to collect it either individually or in partnership with neighbouring authorities.

Conclusion

28. The planning system is vital for delivering sustainable development and we firmly believe in its potential to do so. But Regional Strategies took decisions away from communities and democratically accountable decision-makers and imposed targets on local communities. That created opposition to development, delay ed decisions and reduced confidence in the system . And Regional Strategies have not been effective. Only 18% of local planning authorities have adopted core strategies with up to date housing targets at a time when housebuilding rates are at their lowest for many years.

29. Our proposals are designed to decentralise decision making and incentivise development so that the planning system starts to support the delivery of homes and economic growth. This will be done with the support of local communities as proponents of sustainable growth. That is what the planning system was created for and what it can deliver again.

September 2010