Last month Tewkesbury Borough Council lost their challenge against the decision by a planning inspector to grant permission for 50 homes at Gotherington, after an appeal by developers JJ Gallagher and Richard Cook against the local authority’s initial refusal of permission. Under paragraph 74 of the National Planning Policy Framework (July 2021 version), a local planning authority is required to maintain a five-year supply of deliverable housing sites, designed to meet its local housing requirement calculations. Paragraph 11 establishes that, where a local authority has failed to maintain such a land supply, the so-called “presumption in favour of sustainable development” applies and planning permission should usually be granted.

The central issue in Tewkesbury Borough Council v Secretary of State for Housing Communities And Local Government [2021] EWHC 2782 (Admin) was whether a local authority which had previously delivered more homes than its own average annual delivery target suggested were needed during the earlier part of its Local Plan period was: a) entitled; and b) required to factor that past oversupply into its future housing land supply calculations. The council claimed that, when past delivery across the plan period was taken into account, they had a land supply of 4.37 years, but the inspector disagreed, estimating that the local authority had just 1.82 years’ supply and consequently applying the presumption in favour of sustainable development and approving the Gotherington application.  

The council appealed, and the High Court was therefore required to consider a question upon which the NPPF and Planning Practice Guidance on Housing Supply and Delivery are both silent, namely how authorities should treat past oversupply. The Court upheld the inspector’s decision in this instance, but before hard-pressed local planning authorities throw up their hands in despair, they should turn to the judgment of Mr Justice Dove. Although Dove J was clear in his rejection of the claimant local authority’s contention that they were required by law to factor past oversupply into their future housing land supply calculations [42], he did not go so far as to state that it could never be a relevant consideration. Rather, he held that “the question of whether or not to take into account past oversupply in the circumstances of the present case is, like the question of how it is to be taken into account, a question of planning judgment which is not addressed by the Framework or the PPG and for which therefore there is no policy” [47]. It will therefore be for local authorities and inspectors to consider the relevance of previous housing delivery levels to current local planning policies, applications and appeals on a case by case basis, doubtless creating plenty of work for planning barristers in the process.

This judgment does result in considerable ongoing uncertainty. However, one can see why Dove J declined to offer a rigid legal precedent on this issue, holding that it would be inappropriate “to introduce, by way of inference, text into the policy of the Framework which does not exist” [45]. The interpretation of planning policy will always be contingent upon local circumstances and the application of an overly legalistic blanket approach to decision-making will rarely be appropriate. Moreover, the imposition by the Court of a mandatory rule one way or the other on this issue might have had a deleterious effect on the ability of local authorities to meet housing need in their area. If councils were never allowed to factor any past delivery into their future housing land supply calculations, it might create a perverse incentive for some authorities which would otherwise be proactive about promoting development to meet local need, to delay the allocation of land for housing, the granting of planning permission, and potentially the supply of social housing until later in the plan period, to maintain their rolling housing land supply. Conversely, if authorities were always required to take past oversupply into account, this could potentially put an unnecessary constraint on their delivery ambitions. In either case, it would be deeply unfortunate if an overly prescriptive approach to paragraph 73 of the NPPF were to prevent local authorities from housing people on their waiting lists.

Also raising important questions about the relationship between past delivery and future housing need in the last couple of weeks was the first report of the Building Back Britain Commission, entitled ‘Levelling up and the housing challenge‘. Established by six commissioners from organisations across the housing and construction sectors, this Commission has suggested that the Government’s methodology for calculating housing need requires a radical overhaul if the levelling up agenda is to be achieved.  

The standard methodology for calculating “objectively assessed need” (OAN) for housing, as set out in the PPG on Housing and Economic Needs Assessment has four stages:

1. First, local planning authorities are required to set a baseline figure according to household growth projections for their area.
2. Second, they adjust that figure according to the local housing affordability ratio, so that areas with the biggest gap between earnings and house prices are required to deliver the most homes.
3. Third, an authority may cap the upwards adjustment of its housing need figure, provided that it has up to date strategic policies in place, including any relevant policies contained in a spatial development strategy.
4. Fourth and finally, in the twenty most populated urban centres in England a further 35% uplift is applied after the cap in Stage 3.

This methodology was first introduced in the 2018 revision of the NPPF, at which point it comprised only stages 1–3. The Government has since attempted to tweak the method to bring it into line with its national ambition to deliver 300,000 homes per year. (One might question whether a methodology designed to result in a predetermined figure can really be said to be measuring housing need at all, but that is an argument for another post!) The first proposal from what is now called the Department for Levelling Up, Housing and Communities (formerly MHCLG) was to place an even greater emphasis on local affordability indices to determine the uplift required after initial household projections were calculated, but this was extremely controversial and faced a great deal of backlash, including from Conservative backbenchers. Eventually the Government abandoned this approach and adopted the new “top ups” for large urban centres instead, fixing on the 35% level to bring the overall figure into line with the 300,000 homes per year goal.

This adjustment brought the numbers up on a national level but did nothing to address one of the underlying issues with the current methodology, namely that it produces local housing need calculations which are higher in areas where the market is already overheated and lower in areas where it is depressed. Planning policies based on these calculations will inherently reinforce market forces rather than doing anything to proactively shape the housing market or rebalance the economy away from the South East and from major urban centres and towards other regions of England and smaller cities and towns. At present, for example, the OAN standard methodology leaves councils in the London commuter belt attempting to meet ever more ambitious housing targets, within the constraints imposed by Green Belt and AONB designations, while many post-industrial towns in other parts of the country are deemed to need far fewer new homes, despite having a good deal of brownfield land which would be ripe for redevelopment.

Planning policy could be a powerful tool in the Government’s armoury as it pursues its levelling up agenda. The opportunity is there, especially with regards to brownfield sites. In the latest of its series of reports on the subject, published in October of last year, CPRE calculated that there are currently enough sites on local authority brownfield registers to build 1.3 million new homes, of which 53% already have planning permission. A large proportion of these sites are in the North and Midlands, and in smaller urban centres as well as major cities. The Building Back Britain report recognised this opportunity and called for a new national housing strategy, which would be explicitly aligned to the levelling up agenda. Rather than calculating housing need on the basis of historic growth, this strategy would proactively identify more deprived areas of the country which would benefit most from future investment in housing. It would also involve explicit targets for the delivery of affordable homes and the greater implementation of ‘Modern Methods of Construction’ (MMC), to speed up housing delivery and reduce its environmental impact relative to traditional construction.

A post-Covid world seems like an ideal time to put some of these ideas into practice. As Sam highlighted in his post last week, more of us than ever before are now working from home on a full- or part-time basis, and with the increased possibilities allowed by remote working, smaller towns in less well-connected areas of the country might seem like increasingly attractive places to live. The Government should seize this moment, while the agglomerative forces binding large portions of the workforce to major cities and to London in particular are at their weakest in a generation, to promote a truly transformative planning agenda, which directs investment to where it is most needed rather than following the market.

There have been some signs that developments on this front might be in the pipeline. Appearing on the 2^nd November before the House of Lords’ Built Environment Committee, Housing Minister Christopher Pincher told members of the committee to “watch this space” on the possibility of the Government introducing new methods of land value capture to encourage and support local authorities to start building homes again [p. 18]. Meanwhile, Planning Resource magazine ran an article on 5^th November reporting that the Building Back Britain Commission proposals for a national housing strategy has been backed by Secretary of State Michael Gove.

It is always as well with proposed planning changes not to get ahead of oneself. The last few years have seen a wide variety of proposed alterations and overhauls to the NPPF make it to the consultation stage only to be abandoned. But right now there does seem to be a window of opportunity for the government to introduce a more equitable method of calculating housing need, which would help direct public and private investment towards areas which are most in need of it. As the Tewkesbury judgment shows, it is not enough to rely on past delivery statistics. There is now authority for the fact that these cannot serve as an excuse for future under-delivery on a local level. Neither should they be used to predict and direct future policy for housing delivery on a national scale. As we emerge from the pandemic, it is time for  a more interventionist approach to planning, informed by a genuine levelling up agenda. The Government should remember the old adage and know that if they build it, we will come.    

What I’ve been up to recently…

I was very happy to have the opportunity be one of the judges for the first round of the City Law School GDL moot recently. A year ago, the first round of the 2020/21 competition was my first ever experience of mooting and an excellent way to get more comfortable with the process before tackling any external competitions. So it was really nice to come full circle and have the chance to offer some advice to students just starting out on their GDL adventures.