Planning system failing to deliver, says National Audit Office

PDP_National Audit Office

The planning system is ‘underperforming’ and struggling to deliver on its aim of building 300,000 homes a year, the National Audit Office (NAO) has found.

Recent reforms to the planning system aim to help local authorities increase the rate of house building. However, according to Planning for New Homes, a report published last week by the National Audit Office, these reforms have not yet helped the Government reach its target of 300,000 homes a year by the mid-2020s. The target was set in an attempt to solve the housing crisis. Between 2005-06 and 2017-18, 177,000 new homes per year have been built on average and the number has never exceeded 224,000.

Particular concern was raised about the standard method for local authorities to assess the number of new homes needed in their area, developed in 2017. When compared with former housing need assessments, this new method reduces the need for new homes in five out of nine regions — which, the NAO says, could ‘hamper local authorities’ plans to regenerate’.

The National Audit Office also found that:

– as of December 2018, only 44% of councils had an up-to-date local plan, despite it being a legislative requirement.

– the Government has provided only a ‘rough estimate’ of the infrastructure funding required to support the new homes. This has created ‘uncertainty’, compounded by the fact that the systems to get developers to contribute to infrastructure costs are not working effectively.

– local authorities are increasingly processing planning applications within target timescales but this might reflect a greater use of time extensions rather than increased efficiency.

– The Planning Inspectorate acknowledges that its performance is unacceptable. The time it took to determine an appeal increased from 30 weeks to 38 weeks between 2013-14 and 2017-18.

– Total spending by local authorities on planning functions, such as processing planning applications, fell 15% in real terms between 2010-11 and 2017-18.

“For many years, the supply of new homes has failed to meet demand” said Amyas Morse, the head of the NAO. “From the flawed method for assessing the number of homes required, to the failure to ensure developers contribute fairly for infrastructure, it is clear the planning system is not working well.”

Cllr Philip Atkins, County Councils Network spokesman for housing, planning, and infrastructure, said:

“Whilst the Government’s emphasis on building more homes is welcome, CCN has argued for a long time that its planning reforms do not go far enough and bolder change is required to deliver the number of homes the country needs.

If we are to build the right homes, in the right places, with the necessary infrastructure, then we need to move towards strategic planning on a county scale, working in strong collaboration with district partners and neighbouring councils.

A closer alignment of planning and co-ordinated infrastructure provision across a county-wide geography will enable us to overcome the current fragmented approach to the planning system and build more homes and genuinely sustainable communities.”

Responding to the report, Cllr Martin Tett, Local Government Association’s housing spokesman, said:

“Planning is not a barrier to housebuilding. Council planning departments are doing an incredible job with extremely limited resources, approving 9 out of ten applications, with the majority processed quickly.

Councils are committed to ensuring homes are built where they are needed, are affordable, of high-quality and supported by adequate infrastructure and services, but it is vital that they have an oversight of local developments.

We remain clear that the Government’s housing needs formula does not take into account the complexity and unique needs of local housing markets, which vary significantly from place to place, and imposes unfair and undeliverable targets on communities.

This risks leading to a housebuilding free-for-all which will bypass the needs of local communities and could damage public trust in the planning system.

By lifting the housing borrowing cap the Government has accepted our argument that councils must play a leading role in solving our national housing shortage.

With hundreds of thousands of homes in England with planning permission but yet to be built, it also needs to give councils powers to make sure developers build out approved homes in a timely fashion, and use the Spending Review to adequately fund planning departments and allow them to set planning fees locally so they can cover the cost of processing applications.”

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