White Paper Series: A cut above the test – changes are coming for the standard method
15 October 2020
Whilst it feels as though the system is retreating back to the days when the housing numbers were provided from “the ‘powers that be”, the hope is that this will free up time to focus on the local plan and the vision for each local Authority. Which, judging by the progress of many local plans to date, can only be a good thing.
Heather Vickers Associate Director London
We are told that we need 300,000 new homes every year. The question of how we are going to get there is critical, particularly given that Local Plans currently only provide for about 60% of this figure (187,000). But equally critical, is the question of how the 300,000 came about. How do we know how many homes we need and where?
This currently comes from the “standard method” of calculating housing need. But that calculation is set to change - again.
The method, first implemented through the revised NPPF, was designed to make the issue of calculating housing need across the country easier, cheaper, and more transparent. It has certainly come under criticism since its introduction. The recent proposed changes to the mechanism in the “Changes to the current planning system” consultation (which ended on 1st October 2020), is just the latest attempt to reform this somewhat convoluted method of calculating our future housing need.
We are yet to see what comes out of this consultation, but the main proposed amendment to the formula is the inclusion of existing housing stock. This element had been missing from the current standard method, and it's hoped that this will mean more stability and predictability – which has previously been absent. The affordability adjustment is set to remain; however, the cap could be on its way out (as it was considered that this artificially suppressed the level of housing identified).
The main aim of the new standard method is to create a fair share situation, to ensure housing is delivered in the right locations. The headline grabbing impact of the new standard method is that it throws out an overall annual number of 337,000 homes versus 270,000 homes using the current method (according to research by Lichfields). Something that has got many shires concerned and will no doubt lead to outrage from people who already feel (unfairly so) that the housing numbers thrust on their communities are arbitrary and overblown.
If you have read other articles written by my colleagues, you will be familiar with the term "policy off". The current standard method, and that proposed in the new “Changes to the current planning system” provides for this “policy off” approach. With the standard method providing the starting point to calculate the housing requirement for an area. However, with the publication of the White Paper: Planning for the Future, this specific standard methodology may only be relevant for emerging local plans, which are set to be adopted in the next 2-3 years.
Proposal 4 of the White Paper seeks a nationally set method for providing a local housing requirement, not just a local housing need, which will ensure that enough land is released in the areas where affordability is worst. The proposals put forward champion a “policy on” approach, where this number would factor in land constraints and opportunities to ensure that homes are built at the right level and in the right places. It is hoped that this will remove the very time-consuming process we have been used to in local plan examinations to date. It will be a binding figure, but whether it drives greater land release across the country is yet to be seen.
Local authorities will be required to hit their binding target, using their new growth areas and renewal areas (de facto zoning) to hit the magic number of 300,000 new homes per year. With the White Paper’s doing away of the need to demonstrate a five-year housing land supply, will local authorities be held to account? Is the Housing Delivery Test enough and a quick enough process? If a local plan is only being reviewed every 5 years, will it be too late to rectify any under-delivery and get back on track? Whilst this is a radical new idea for setting the housing need, our main concern is the potential delay for getting each figure agreed as surely a huge amount of detail will be needed to understand the “policy on” position. The White Paper does not tell us what the process for this new standard methodology will be – the devil will very much be in the detail.
Whilst it feels as though the system is retreating back to the days when the housing numbers were provided from the powers that be, the hope is that this will free up time to focus on the local plan and the vision for each local authority. Which, judging by the progress of many local plans to date, can only be a good thing.
We wait with bated breath to see how this all pans out.