Labour promised serious reforms to the planning system while in opposition. What it has proposed now that it’s in Government, including reforms to the National Planning Policy Framework, is very far from a fundamental reform. In the first of two parts on Labour’s planning reforms, Paul Cheshire argues that given how broken the UK’s planning system is, nothing short of radical reform can fix it. However, he does acknowledge some positive steps made towards housing targets. 

With housing affordability beginning to become an issue, Gordon Brown set up two reviews of the planning system headed by Dame Kate Barker back in the early 2000s. I was happy to be one of those on its advisory panel. At the very last meeting, when discussing the recommendations and reluctantly agreeing it was the best that could be done in the circumstances, I remember the late Professor Sir Peter Hall (a very well regarded and pro-planning academic) sighing and remarking that the tragedy was that we had not solved the real problems and would have to be back in five years’ time to fundamentally review the planning system. Every person in the room agreed.

Since then there have been countless reports from think tanks – from left and from right – concluding that fundamental planning reform is imperative if we are to build enough houses to make them affordable and, increasingly, to repair the damage to economic performance our sclerotic planning system imposes.

Our planning system is so fundamentally dysfunctional nothing short of radical reform can fix it.

The Labour party promised serious reform in opposition. Now it has announced its plans, including reforms to the National Planning Policy Framework (NPPF) – the official guidelines to Local Authorities (LAs) setting out national planning policy and how LAs should go about the business of planning. What is being proposed is very far from a fundamental reform. The new minister, Matthew Pennycook, explained in a recent interview that this was because the urgency of the task of building more houses was so great Labour had to opt for “keyhole surgery” not “radical reform”. This is understandable but unfortunately in my judgement, misguided. Our planning system is so fundamentally dysfunctional nothing short of radical reform can fix it. Its ability to resist national policy is total, and its ability to respond to national priorities absent.

The problem with Local Authorities

For there to be any realistic hope that the improvements proposed could work, there would have to be not just available mechanisms but resources to implement them. There aren’t. There are very few planners, a grave shortage of qualified Planning Inspectors and a total lack of central control over what Local Authorities do, even knowledge of what they have done.

Every Local Authority has its own definitions of “available sites” and – when the information is available at all – records or illustrates it in their own way.

As an illustration of this last point, in 2019 I was a member of a team (part funded by the then DCLG) investigating how to build more houses. As an element in our arcane planning system every Local Authority is required to maintain a register of available sites for house-building and to ensure that there is a five year supply of such land against their measure of “housing need”. Local Authorities are required to report this number (as a ratio of five years supply) and if they fall below it, are put on the “naughty step”.

There are two problems. The first is that every Local Authority has its own definitions of “available sites” and – when the information is available at all – records or illustrates it in their own way. A combined LSE/Knight Frank team spent 18-months of research time just trying to assemble data for all 350 English Local Authorities but in the end could only get remotely comparable information for 73.

In a separate exercise, I was party to getting a particularly development-resistant Home Counties Local Authorities to release the detailed information on its register of sites. Having declared only a 2.9 years “available land supply” the Local Authority was already on the naughty step. When the freedom of information request was finally answered we found the register to be almost a work of fiction: many sites were double counted; many more were already built on (some were double counted and already built on) and others were unbuildable. A charitable revision suggested that the LA might perhaps have a 1.7 year supply against an outdated assessment of local housing need (the local plan was years out of date).

Mechanically calculating how many year’s land supply there is on the basis of assumed density of development against formulaic definition of “housing need” might seem a symbolic exercise. But to have a hope of working such a system must have common definitions and effective supervision. In the absence of that and with everyone marking their own homework, such a system is clearly not fit for purpose. So far as I can see, it is still the case that the most recent comprehensive data officially available on 5-year land supply by Local Authority is for 2009. And as we showed in 2019 that data was not credible.

Labour is now proposing that not only should local housing targets be mandatory, but they should be calculated in a transparent and economically more rational way.

A positive improvement: Housing targets

Before writing off Labour’s “keyhole surgery” as hopeless, there are two changes that could work – though both need serious strengthening. The new method of calculating and imposing “housing targets” is potentially a big plus. The last government engaged in strange, post-truth politics. It effectively abolished not just housing targets but really local plans themselves while simultaneously claiming to be maintaining housing targets and supporting a “plan led system”. Since, however, it made meeting housing targets voluntary, with a single action it de facto abolished the reality of targets and any incentive development-resistant LAs might have had for having local plans in the first place. The result has been that house building has all but collapsed from its already wholly inadequate level and the proportion of Local Authoritiess with current, valid, local plans has fallen below 33 per cent and is expected to go to 22 per cent next year.

Labour is now proposing that not only should local housing targets be mandatory, but they should be calculated in a transparent and economically more rational way. Instead of relying on projected household growth – an erratic and unreliable number but, of course, in outcome partly dependent on how many houses were built – housing targets will be set as 0.8 per cent of the existing stock of houses with a weighting factor to increase that number the less affordable housing is to local residents of the Local Authority. So build more houses where they are least affordable: whatever next!

Both equity and our economic growth prospects demand that more houses should be built where they are least affordable.

This principle is excellent. It not only will push new supply provision to where housing is least affordable (good on equity grounds) but it will strengthen the positive effect of more housing on economic growth. This is because worse affordability is located in a very widely defined region where jobs are most productive but labour is most expensive and in shortest supply, priced out by unaffordable housing. The houses built will not be the most affordable – because land is so expensive in these areas but – as Torsten Bell argued recently – all housebuilding improves affordability for all in the medium term. Both equity and our economic growth prospects demand that more houses should be built where they are least affordable.

So far so good but inspecting the results of the new proposed revised method does strongly suggest revising the detail: specifically giving less weight to the existing stock and substantially more to the affordability ratio. It ends up hugely increasing the housing target for many towns in the north where housing is as affordable as can be found in England while only marginally increasing the targets in southern England – such as St Albans – the most unaffordable LA outside London.

It will still be a very difficult and protracted effort to get the houses built especially in the more development resistant areas where – surprise – housing is least affordable.

The principles underlying the new target setting method are good but their implementation needs substantial strengthening. There needs to be a higher weight given to local affordability and a much lower weight on the stock. Just setting out to build each year a mechanical fraction of the existing housing stock does not make a lot of sense. A target set as a measure of local shortage – revealed by affordability – does. Although even that needs to make adjustment for places like, say, Camden in central London – where the median house price averaged more than 18 times local incomes but there just is not much scope for building. A further downside is that it will still be a very difficult and protracted effort to get the houses built especially in the more development resistant areas where – surprise – housing is least affordable.

So the proposals on re-imposing housing targets and how to calculate them are a significant step forward even if they need a thorough revision in the detail. There is, however, another important change proposed – which again needs a substantial revision if it is to achieve its laudable objective. There are also some missed opportunities, reforms that would have cost little or nothing but had very positive effects on productivity or the environment. These are the subject of Part II of this blog post.

All articles posted on this blog give the views of the author(s), and not the position of LSE British Politics and Policy, nor of the London School of Economics and Political Science.

Image credit: Alex Yeung on Shutterstock.