Introduction In this truly extraordinary period – not just the formation of the new coalition Government, but a blizzard of subsequent announcements and actions, many of which have radical implications - I thought you might like to have our assessment of the picture now that some patterns are beginning to emerge. I am conscious that it has been difficult to digest the developments and events of the last two months. No-one expected a coalition Government of the kind we now have. Nor did we quite expect the coalition to move so quickly to effect change in quite the ways it has. There are many dimensions to this, but the overriding message is that things have changed. The new Government has its own agenda and its own way of doing things. Its culture is different. Its instinct is not that if there is an issue the Government should take action to resolve it. Ministers believe instead in devolving powers and responsibilities away from Whitehall and Westminster to local authorities and communities. Communities Secretary Eric Pickles has stated that his three top priorities are “Localism, Localism and Localism” – nowhere more so of course than in relation to the planning system. We have therefore to make sure we are engaging with the new ways of doing things in the right manner. We have to get smarter at how we do things and communicate with Government. We also have to reassess how we can best help you to navigate the currently turbulent waters that have been created by the changes already made. In this special Chairman’s report I want to bring together a summary of what has happened so far, our assessment of it and our thoughts on what we need to do. I hope you will find this helpful and would as ever welcome your feedback. Government announcements and changes At the time of writing there have already been a significant number of policy announcements and Ministerial statements of note. (i) Planning policy The most immediately important Government announcements for the industry concern planning policy. Revocation of the Regional Spatial Strategies and the new housing incentive. On 27th May the new Communities Secretary, Eric Pickles, wrote to chief planning officers in local authorities confirming the Government’s intention to abolish rapidly the Regional Spatial Strategies and stating this constituted a material planning consideration. The Secretary of State’s letter, a key early expression of localism, had an immediate impact. By now close to 50 local authorities have suspended work on their Core Strategies, signalled a wish to change course on their plans, de-allocated sites or said they will not determine particular applications. There is considerable confusion on the ground, but those authorities who wanted to step back from the requirements of the RSSs have had the opportunity to do so. By contrast there have been a few examples, a much smaller number to date, of authorities that have used the impending abolition of the RSSs as a chance to adopt a more flexible or pro-growth approach. In order to address this confusion the Secretary of State made a formal Parliamentary Statement on the 6th July in which he formally revoked all of the Regional Strategies (currently comprising the Regional Spatial Strategy and Regional Economic Strategy for each Region) with immediate effect. Thus, while the development plan is still comprised of the Regional Strategy and Local Development Documents there are now no Regional Strategies to which regard must be had in decision making. The statement was accompanied by a letter from the Chief Planner to all local authorities providing guidance following the revocation. While this note was welcome, it in itself is unclear on some issues (such as what happens if housing numbers are to be reviewed by authorities and the definition of “Option 1” figures), and certainly does not provide any sanctions on those Local Authorities who have reacted negatively to the removal of the Strategies. HBF continues to collect information from members (please click here to view) on the local reaction to these changes and has grouped them into 5 categories. These are: Category P – Positive responses by Local Authorities who have decided to carry on with plan preparation. These include many Authorities in the North West and North East of England along with a number in the East and West Midlands. Category 1: Those Local Authorities delaying LDF preparation pending clarification from Government on transitional arrangements. It is unclear whether or not these Authorities will be satisfied by the latest guidance note from CLG. Some of them might well move towards Category 2. Category 2: Those Local Authorities delaying and reviewing a LDF/Core Strategy to take into account the Government announcements. This category is the one most likely to grow over the coming months as Authorities such as those in Oxfordshire and other areas of the South East and South West take account of their confirmed freedom to do so in the guidance accompanying the 6th July Statement.. Category 3: Those Local Authorities delaying and reviewing LDFs and as a consequence refusing to determine applications or removing allocated sites from previously adopted plans. Mostly in the South of England, Councils such as Winchester, Cotswold, Cherwell and Wokingham have placed on hold any decisions on pending planning applications. Category 4: Removal of allocated sites from an adopted plan without the justification of any new or additional evidence, solely on the basis of the revocation of RS. These are the most extreme reactors to the situation. Forest Heath District Council refused permission for 1,200 dwellings on a site it had included in its adopted core strategy only 1 month before considering the application and Mole Valley who reversed its decision of October 2009 to release its “Phase 2” sites to ensure a 5 year housing land supply. The picture with regard to the appeals process and the actions of the Planning Inspectorate (PINS) has also been mixed, although the latest guidance note from CLG might well assist PINS in moving forward with many of the deferred appeals currently awaiting determination. It is, of course, too early to know how the guidance will be applied and, once again, we would be grateful for decisions on members’ appeals to be reported back to us in order that we might continue to be informed in our future discussions with Ministers and CLG officials. The 6th July Statement also confirmed the introduction of “powerful incentives” to encourage the provision of new housing following the revocation of the Regional Strategies. These will be in line with the proposals for matching Council Tax receipts from new homes advanced by the Conservatives. In his Statement the Secretary of State said “I can confirm that this will ensure that those local authorities which take action now to consent and support the construction of new homes will receive direct and substantial benefit from their actions …..we aim to [introduce the incentives] early in the spending review period” [that is, in the period commencing 1 April 2011]. Subsequent to the announcements, earlier this month CLG published a ‘Draft structural reform plan’. In it, CLG sets out actions and milestones for “making localism and the Big Society part of everyday life”. It details the timescale for the passing of the Localism Bill as November 2011 following presentation to parliament this November, and states that the new national planning policy will not be in place until April 2012. However, the most recent developments suggest that there may be a question mark over some of the stated timescales. Notably the document says that details on the proposed incentive to build new homes will be announced in July 2010 and the first payments will be April 2011. In his Parliamentary statement, however, Eric Pickles said that a consultation on incentives would not be undertaken until the autumn, something reiterated to us in the meetings we have had with Government officials. “Back garden” development As well as the statements by Eric Pickles, the Minister responsible for planning, Greg Clark, announced a change in planning policy relating to so-called “garden grabbing”. His announcement was not a ban on back garden development, but a reclassification of residential gardens which are now excluded from the definition of previously developed land. Alongside this change of policy he also scrapped the advisory development density guidelines in PPS3 (albeit that his announcement referred to the removal of “minimum” density targets – a concept that was dropped in 2006). Taken together, these changes to planning policy as set out in PPS3, are intended to remove any pressures Local Authorities may have felt under to agree development on garden sites rather than possible alternatives or not to adopt lower density policies felt to be more in keeping with the areas concerned. Mr Clark has since made it clear this is not a ban on such sites coming forward. However, in those areas where targets for development on previously developed land are high the reclassification will inevitably cause extra concern for developers undertaking this type of development. Obligation to co-operate Greg Clark has more recently confirmed the Government’s intention to proceed with the proposal in the Conservatives’ pre-election policy green papers that Local Authorities should be subject to a duty to co-operate with each other where planning issues and economic and other requirements are cross-boundary in nature. This begins to address the need for mechanisms to ensure that the new localist world does not prevent more strategic matters being considered. Infrastructure Planning Commission A further Conservative pre-election proposal to abolish the Infrastructure Planning Commission (IPC) has also been confirmed. The IPC’s main functions, designed to speed up the consideration of major infrastructure projects will instead be undertaken by a Major Infrastructure Unit within the PINS. (ii) Decentralisation and Localism Bill The Government announced in the Queen’s Speech in late May that it would introduce a Decentralisation and Localism Bill in the current session of parliament. The Bill will be a major piece of legislation, introducing not only the changes needed to formally abolish Regional Strategies and to establish the new locally-based planning system, but a wide range of other measures for devolving power to Local Authorities and communities. These are likely to include many proposals from the Conservative Party’s “Control Shift” policy green paper published in February 2009: Allowing councils to establish their own local enterprise partnerships to take over the economic development functions and funding of the Regional Development Agencies Giving Local Authorities a new discretionary power to levy business rate discounts, allowing them to help local shops and services, such as rural pubs or post offices Provide citizens in all large cities with the opportunity to choose whether to have an elected mayor, through mayoral referendums Greater use of direct democracy, including allowing residents to veto high council tax rises, and instigating local referendums on local issues Requiring councils to publish detailed information online on expenditure by local councils – including the pay and perks of senior staff, and issuing new guidance to stop ‘rewards for failure’ to sacked town hall staff. In addition, the Bill would be the means to introduce ideas for more flexible social housing tenures, the proposed “Right to Move” for social tenants and any changes to the regulatory regime for housing associations. Last, but not least, it would be the basis for formally abolishing Home Information Packs following their early suspension by the Government. Ministers have indicated that the draft Bill will not be presented to parliament until the autumn, possibly not until close to the end of the year. The current session of parliament runs until next summer, however, so that would still leave sufficient time for the Bill to receive Royal Assent and be enacted before the end of July 2011. However, many of the provisions within the Act will require further regulation and it may be some years before issues such as the new development plan system are finally in place. (iii) Zero carbon Housing Minister Grant Shapps has said publicly he wants to resolve the definition of zero carbon “within weeks” and he indicated in my recent meeting with him and Greg Clark that he planned to make a statement before the summer break. It remains to be seen how specific such a statement might be given the thorny details that still need to be worked through to determine how the policy objective can be delivered in a way that is affordable, technically feasible and acceptable to customers. These more detailed matters remain important for the full implementation of the policy – that is, going beyond the requirements of the proposed minimum fabric efficiency standard on which the previous Government consulted following the good work undertaken on this by the Zero Carbon Hub. The Minister’s proposed statement is, however, likely to be important in clarifying the new Government’s direction of travel and willingness to recognise the very real cost and other challenges the zero carbon policy poses for the industry. Given this, I wrote to the Minister setting out our views on what an early statement might best do to create useful clarity for the industry. In particular, I argued for full flexibility in the measures that could be adopted beyond the minimum fabric efficiency requirement – so that there would be no mandatory requirement for on-site renewable energy. Instead the letter made the case for an approach under which companies could determine the most practical and cost-effective means of finding necessary carbon savings according to the circumstances of the case and subject to a suitable maximum price per tonne of carbon saved. The Hub itself is currently reassessing its business plan against the Minister’s signalled intention not to continue Government funding at its current level once its immediate work to settle the definition has been completed. iv) Other issues Home information Packs (HIPs) One of new Ministers’ first acts was to suspend the requirement for a HIP when marketing a residential property for sale. This step has been welcomed by the great majority in the property world and the evidence to date is that there has been a noticeable increase in the number of homes being marketed as a result. This was probably to have been expected since one of the arguments always made against HIPs was that they would discourage speculative marketing – an essential part of the efficient operation of any market. It may be that with the other uncertainties affecting the market this proves a relatively short-lived phenomenon for now, but in the longer-term the ending of HIPs should lead to a healthier market overall. The “Age of aspiration” Allied to the suspension of HIPs, Housing Minister Grant Shapps used his first public speech following the election to state his commitment to encouraging the aspiration for home ownership. This was a welcome statement which holds out hope that the Government will be willing to look at sensible measures to help first-time buyers access the market and we will clearly wish to work with the grain of this sentiment. The abolition of the Regional Development Agencies (RDAs) Ministers have also confirmed that the current RDAs are to be wound up. Some of the RDAs’ functions are to be brought back to the centre or abolished, but in their place Eric Pickles and Business Secretary Vince Cable have written to Local Authorities and business leaders to seek outline proposals for Local Enterprise Partnerships. Such partnerships are envisaged as bodies that would work to create the right environment for business and growth in their areas by tackling issues including planning and housing, local transport and infrastructure priorities, employment and enterprise. To be sufficiently strategic, the Government says it would expect partnerships would include groups of upper tier Authorities. This could potentially be a group of Authorities corresponding to one of the existing regions if that is the clear wish of those involved. HBF assessment of developments to date Hard though it has been to stand back given the flurry of activity and announcements, we can now begin to assess the Government’s strategy and its associated politics. First and foremost, many of the announcements have been about early wins. We should not underestimate the importance of this for the new Government, particularly given that it is a coalition. The parties in Government have wanted to please their respective supporters quickly where they can. Each has faced concern on the part of its supporters about the implications of the coalition for the direction of policy. From that perspective, planning and housing policy has been an ideal area for action to settle party nerves and demonstrate the benefits of the coalition, helping to underpin its early days. Both the Conservatives and Liberal Democrats campaigned in the general election on a localist vision of the planning system involving the abolition of the Regional Strategies and the devolution of power to Local Authorities and communities. The Conservatives may have written much more about these issues in their policy green papers, but there was no doubt that the Liberal Democrat manifesto was on the same page, and parliamentary debates since the election have shown very clearly that backbench MPs from the two parties hold very similar views and welcome the measures taken by Ministers. Equally, both parties supported the abolition of HIPs. There have, however, been other interesting dimensions to what we have seen so far. As well as pleasing their supporters, Ministers have shown a very clear wish to set the policy agenda decisively in the way they have gone about things. Eric Pickles’ letter to Local Authorities stating his intention to abolish Regional Strategies was a material planning consideration that provided scope for Authorities to drop work on their plans and step away from the existing housing targets where they wanted to do so before the Strategies were actually revoked. Equally, Greg Clark’s change of policy on the designation of gardens and the removal of guidance on minimum densities was introduced at a stroke by reissuing PPS3 amended just on those two points. These were both the actions of a Government that wishes to set its stamp on policy with minimum delay, and transform the nature of the dialogue about planning issues. They also show a determination to impose the new political direction on the civil service machine rather than be captured by its inertia and the weight of past practice and thinking. We should be in no doubt therefore about the seriousness of the intention, nor of the radical thinking behind the changes made. The aim is truly to devolve real power to Local Authorities and communities. This explains Eric Pickles’ clear acceptance in his statement and guidance issued on 6th July that Authorities should be free to review their housing figures and do not have to rest even with their Option 1 RSS numbers. While we cannot know at this stage how many Authorities will make use of this new freedom, the train has already left the station and we now need to adjust to a new world in which no plan can be relied upon until it is agreed locally. This is undoubtedly a challenging new environment – a powerful mix of radical political thinking and more traditional concerns about development. It remains a high risk strategy and Ministers are in practice placing great weight on the proposed financial incentive to ensure that Nimby sentiment does not outweigh a recognition by communities of their need to provide more housing. In terms of political philosophy, Ministers made it clear when we met them that a locally-based and empowered planning system is a key part of the Conservatives’ “Big Society” philosophy. That in turn is based on ideas about behavioural economics which conclude that if you give people power and responsibility for issues they will act differently and provide for outcomes that they see are necessary. Since these are strongly held, almost evangelical, views we have to recognise their force and seek to work with Government and Local Authorities on ways to ensure the new system in practice creates a climate that enables business to operate without undue risk. Looking beyond planning policy, however, there are balancing and mitigating factors. Grant Shapps has indicated a willingness to look at practical solutions to refining the definition of zero carbon and to the response to the consultation on the HCA’s proposed core standards. There are also helpful wider indications of the Government’s appetite for deregulation. These are opportunities we must seize. Nor is the planning debate without some positive elements. Ministers have indicated that there should still be local plans, that these must involve suitably evidence-based assessments of housing requirements and provide 5 year land supplies to deliver these. Again we must build on these elements to ensure that the new world is as business-friendly as possible. HBF responses and actions As many of you will know, HBF has been very active in communicating with new Ministers setting out our wishes for transition to the new planning system, our wish to work with Government on the details of this regime, the definition of zero carbon and the need to tackle the wider burden of regulation on the industry. It is early days and we have received few formal responses from Ministers as yet, although we have held an initial meeting jointly with Grant Shapps and Greg Clark. This meeting and other feedback has confirmed that their overriding priority at this stage has been to set the agenda on planning change. Other issues, with the possible exception of the definition of zero carbon, look likely to take some while longer to come to the fore. Beyond our communications to date, we are therefore now starting to work on ideas to influence thinking on the details of the new planning system. We are looking both at what we think the Decentralisation and Localism Bill should provide for and at the nature and elements of the proposed new, simplified national planning policy framework due to be presented to parliament. In each case we will aim to submit substantive ideas to the Government for their consideration. We are also trying to impress upon them the need to clarify the proposed incentives for local authorities, to allow them to factor them into their budget plans, and the importance of introducing them as soon as possible. Interestingly, the Conservatives have also reactivated their Planning Sounding Board under the chairmanship of John Howell MP – one of the main authors of the planning policy green paper. This met earlier this week and looks likely to serve as a means by or through which we and others can be involved in the policy-making process relating to the Bill and the new national planning policy framework. We shall therefore continue to take an active part in this. Other groups may also be set up on specific issues. Most recently we were invited to take part in discussions about the proposal for Local Housing Trusts – another idea from the Conservatives’ green papers. Participation in such processes and groups is clearly part of what we need to do to engage with new Ministers, but the challenge is much wider when we consider the real shift of power from the centre to the localities. At the same time, the early signs are that the culture of the Government is going to be much more hands off generally. We need to adjust to this change of attitude and realise that Government will not always expect us to look to it for solutions – either on planning or in other areas. Understanding the balance between areas of Government involvement and areas where we will need to do more than previously to make things happen is also part of the challenge. As we will need to work in different, and smarter, ways to engage effectively in this changed climate we have set up a small, short-term member group with the specific remit of assisting us to put in place an engagement strategy for relations with the Government nationally, other bodies and Local Authorities. This will be an important piece of work and I will report back to you on its findings and progress. I hope you have found this report useful. As ever please feel free to contact me or any of my HBF colleagues if there is any aspect of it that you would like to discuss.
