In October last year, the Government launched a consultation on updates to the National Planning Policy Framework (“NPPF”) and the National Planning Practice Guidance (“NPPG”) setting out proposed alterations to the standard method for assessing local housing need to ensure that it is consistent with increasing the supply of homes. In addition, the consultation proposed clarifications on housing land supply, the definition of “Deliverable” in the Glossary to the NPPF and appropriate assessment. The revised NPPF has now been published together with changes to the NPPG and the first tranche of figures for the Housing Delivery Test.
It has long been the stated intention of the Government to boost the supply of housing. One of the key areas in which this is achieved is through the so-called “tilted balance”.
Paragraph 11 (which remains unchanged) of the new NPPF directs decision-takers where there are no development plan policies, or those most relevant to determination are out-of-date, to (inter alia) grant permission “unless… any adverse impacts of doing so would significantly and demonstrably outweigh the benefits, when assessed against the policies in this Framework taken as a whole”. As footnote 7 makes clear, two of the circumstances in which it can be demonstrated that policies are out-of-date are where:
- the Local Planning Authority (“LPA”) cannot demonstrate a five year supply (“5YHLS”) of deliverable housing sites; or
- the Housing Delivery Test (“HDT”) indicates that the delivery of housing was substantially below (less than 75%) the housing requirement over the previous three years (although this requirement is subject to transitional arrangements meaning the 75% threshold is not in force until November 2020, with a 25% threshold in November 2019 and a 45% threshold in November 2019).
For those involved in promoting development on unallocated sites, 5YHLS is a well-known concept. If an LPA cannot demonstrate 5YHLS, the prospects of securing planning permission are improved considerably and huge amounts of effort is put in by LPAs, promoters, developers and landowners on these arguments. One of the key battlegrounds has been what the correct assessment of housing need should be, particularly where development plans are out-of-date because, for example, they pre-date the NPPF or earlier versions of it. The assessment of housing need is also critical to development plans with much debate on what the relevant local planning authority’s objectively assessed need should be to inform the number of sites required to be allocated to meet that need.
Given the debate and uncertainty, the Government has wanted to simplify the assessment of housing need for some time and the last version of the NPPF published in July 2018 (“2018 NPPF”) included a requirement (paragraph 60 and unchanged in the new NPPF) that strategic policies should be informed by a local need assessment, conducted using the standard method in national planning guidance unless exceptional circumstances justified an alternative approach. Transitional provisions were introduced which enabled LPAs to avoid the standard method if they submitted their Local Plans for examination by 24th January 2019.
Similarly, paragraph 73 (again unchanged in the new NPPF) required LPAs to identify and update annually a supply of specific deliverable sites sufficient to provide 5YHLS against their housing requirement in adopted strategic policies. However, where those policies were more than five years old, that assessment should be against local housing need using the standard methodology. The standard methodology was set out in the relevant parts of the NPPG.
However, no sooner had the 2018 NPPF been published than the Government realised that it had a problem. The standard methodology was based on the 2016 household projection figures which showed that overall need in England was significantly lower than the Government’s stated desire to provide 300,000 new houses every year. Ironically the change introduced simplicity, but threatened the delivery of one of the Government’s key policy agendas.
As a consequence almost as soon as the 2018 NPPF was published, the Government resolved to review the method but given the complexities in coming up with something appropriate, proposed an interim measure which would require the standard methodology to be based on the 2014 household projection figures.
At the same time, the Government resolved to tidy up other issues including:
- when should a site be considered “Deliverable” for the purposes of calculating the 5YHLS; and
- whether the tilted balance should apply to plans or projects requiring appropriate assessment under the Habitats Regulations.
The New NPPF
The new NPPF can be found here.
- The changes in the new NPPF contain no real surprises and can be briefly summarised as follows:
- It is made explicit in footnote 37 that where strategic policies are more than five years old and local housing need is used as the basis of 5YHLS assessment, “it should be calculated using the standard method set out in national planning guidance”.
- The standard method in the NPPG has changed and will now be based on the 2014 household projection figures. The changes to the NPPG can be found here.
- The new standard method still shows a significant shortfall against the Government’s 300,000 homes per year target but charitably could be called a step in the right direction. It remains the case that Government can change the standard method in the NPPG without any need to change the NPPF and it has to be expected given the mismatch between the Government’s target and the standard method that there will be further revisions in the not too distant future. Numerous LPAs have strategic planning policies which are more than five years old and will now have to assess housing need against the standard method.
- Paragraph 177 contains some helpful clarification to whether the tilted balance will apply to sites requiring appropriate assessment under the Habitat Regulations. This has been eagerly awaited following the European Court’s ruling in People over Wind, that held mitigation (or harm reduction) measures could not be taken into account at the screening stage to avoid the need for undertaking an appropriate assessment of impacts on European sites. This meant that the mere act of undertaking appropriate assessment would prevent application of the titled balance, even if no residual harm was found. Now, the presumption in favour of sustainable development contained in paragraph 11 does not apply to plans or projects likely to have a significant effect on a habitats site (either alone or in combination with other plans or projects) “unless an appropriate assessment has concluded that the plan or project will not adversely affect the integrity of the habitats site”. This is welcome clarification that if following an appropriate assessment no adverse impacts to a habitats site are identified, that site can still benefit from the tilted balance. However, there is still the need to ensure the appropriate assessment exercise (and supporting technical information) is robust, given the more recent cases that have not only clarified how appropriate assessment should be undertaken, but seemed to have blurred the distinction between “mitigation” and “compensation” measures for the purposes of having to meet the “overriding public interest” test before granting planning permission.
- The definition of “Deliverable” has changed considerably in the Glossary to the new NPPF. In summary:
- To be considered deliverable sites for housing should be available now, offer a suitable location for development now and be achievable with a realistic prospect that housing will be delivered on the site within five years.
- Sites not involving major development which have planning permission and all sites with detailed planning permission should be considered deliverable until permission expires unless there is clear evidence homes will not be delivered within five years (e.g. no longer viable, no demand for types of units or sites have long term phasing plans).
- Where a site has outline planning permission for major development, has been allocated in a development plan, has a grant of permission in principle or is identified in a brownfield register, it should only be considered deliverable “where there is clear evidence that housing completions will begin on site within five years”.
- The definition of “Local housing need” has changed. Although it refers to the standard method in the NPPG, it does say that in the context of preparing strategic policy only “this may be calculated using a justified alternative approach”. This provides some comfort to LPAs that there will not need to be slavish adherence to the standard method, although what a “justified alternative approach” actually is shall inevitably be tested during local plan examination or appeals in due course.
Housing Delivery Test
On the same day that the new NPPF was published the Government published its long-delayed first set of HDT figures. The figures can be found here.
For reasons explained in this article, if the HDT for a particular authority was substantially below (less than 75%, subject to the transitional arrangements referred to above) the housing requirement over the previous three years this would trigger the application of the tilted balance. There is no real substitute than to scrutinise the figures with the last column identifying what each housing authority, given the transitional arrangements, is required to do. That said, it is striking just how few housing authorities are failing to meet the 75% test which in our view is scarcely surprising given the buoyancy of the housing market over the last few years.
The new NPPF (and NPPG) may contain few changes but they are very important. The change to basing the calculation of local housing need on the 2014 household projection figures is welcomed but if the Government’s agenda to deliver 300,000 new homes a year is to be met, goes nowhere near far enough. There needs to be a new methodology put in place as soon as possible in a review of the NPPG to help ensure that the homes this country needs are delivered.
It is also the case that, as we now move towards a more formulaic approach to the assessment of housing need, the debate about whether an LPA can demonstrate a 5YHLS will move away from need to supply. As appeal decisions are demonstrating, a failure by the LPA to demonstrate that sites are deliverable within the meaning of the new definition will inevitably mean that they cannot demonstrate in accordance with the NPPF that they have a 5YHLS. We can expect the debate with LPAs and at appeal to move away from what the objectively assessed need is and to whether sites are deliverable and should count towards supply. Detailed scrutiny of delivery on sites can be expected. It will be for LPAs to positively demonstrate on major sites with outline planning permission, etc that there is clear evidence that housing completions will begin in the next five years.
The changes which make it clear that the tilted balance is engaged if appropriate assessment reveals no adverse effect on the integrity of a habitats site are to be welcomed. It was an anomaly that a plan or project could not benefit from the tilted balance even where no adverse effect had been demonstrated.
Turning finally to the HDT, watch this space. Given the transitional arrangements, the figures were always unlikely to lead to any dramatic changes at the moment. However, it can be expected that as the full impacts of the HDT are realised following the transitional period, the tilted balance will be engaged on a regular basis because insufficient housing is being delivered.
© Howes Percival LLP
If you would like more information about the services we offer here at Howes Percival either visit our Planning page or contact a member of our expert Planning team.