Every few years, the government decides that the planning system is not working. Four years ago, it wiped the slate clean with the National Planning Policy Framework and new guidance. Now, another review from the Local Plans Expert Group (LPEG) has considered how planning can deliver the homes that the nation needs.
The group makes many good suggestions, which should make planning simpler and faster. But there is a problem, hidden in appendix six of the report. Here, the LPEG puts forward a new method for calculating “objectively assessed housing need”. This calculation is behind the all-important target in each authority’s local plan.
There are two problems with it. First, it is technically flawed. In many places, the results will not make sense, so planning will be slower and more complex, as authorities, developers and many barristers struggle to find practical solutions.
To pick one example, the group advises that the government’s population and household projections should not be questioned. For most places, most of the time, this is good advice.
But sometimes they include errors, which must be corrected if we are to plan properly for housing.
Take Cambridge, where the projection shows about half the number of new houses that experts agree will be needed. If this low figure were accepted, planning would be blocking growth in one of the most dynamic economies in England.
Housing needs 40% above government projections
The second problem is worse. Under the new method, the total land allocated for housing across England would far exceed demand. Estimates suggest that over a 20-year period, we would be planning for 320,000 new dwellings a year.
This is about 40% above the government projections and 2.5 times the recent level of housebuilding.
Politically, a large number is good. It says that the government wants to see a step increase in land supply, so land becomes cheaper, house prices fall (or rise more slowly), and homes become more affordable. But the scale is wrong. If sites are allocated in line with the new numbers, many will not be developed because there are not enough people to occupy them - especially people with enough money to make development viable.
Social housing will not fill the gap, because it is mostly paid for by developer contributions levied on market housing. With lower land prices, there will be fewer developer contributions to pay for social housing and for infrastructure.