Revised National Planning Policy Framework—will it fix the housing market?

This article was first published on Lexis®PSL Planning on 9 August 2018.

Will the government’s new planning rulebook deliver on its promises? Robert Walton, barrister at Landmark Chambers, says the new National Planning Policy Framework (NPPF) is a step in the right direction and should result in more houses. Matthew White, partner and head of the planning team in Herbert Smith Freehills LLP’s London office, predicts that, by itself, the revised NPPF will not streamline the planning process, nor close the gap between planning permissions and housing delivery.

What are the main implications of national planning policy in practice?

Matthew White (MW): The NPPF sets out the government’s planning policies for England and how they should be applied. Alongside national planning practice guidance, the NPPF forms the foundation for local plans and planning decisions.

The NPPF is a material consideration for local planning authorities when determining planning applications. It must also be taken into account when preparing development plans, which will not be ‘sound’ unless they are consistent with national policy and enable the delivery of sustainable development in accordance with the policies in the NPPF.

This comprehensive review of the framework is therefore significant, particularly regarding residential development. MHCLG described the revised NPPF as a ‘new planning rulebook’, providing ‘a comprehensive approach for planners, developers and councils to build more homes, more quickly and in the places where people want to live’. The Secretary of State, James Brokenshire, said it is ‘an essential part of the government’s strategy to fix the broken housing market’.

One of the objectives of revising the NPPF was to take account of extensive case law on the meaning of the original 2012 NPPF. Publishing the new NPPF therefore gives rise to the risk of a new wave of litigation on the meaning of new words in the framework, although claimants should heed the warning given by Lord Justice Lindblom in Barwood Strategic Land II LLP v East Staffordshire Borough Council and Secretary of State for Communities and Local Government [2017] EWCA Civ 893, [2017] All ER (D) 180 (Jun) that: ‘Excessive legalism has no place in the planning system.’

In your opinion, what are the most important changes made by the NPPF? Will it change how decisions and development plans are made?

Robert Walton (RW): The new NPPF, which replaces the previous version published in March 2012, is not just about housing—it sets out the government’s planning policy as to how sustainable development across the board should be planned for and how planning applications proposing development of all kinds should be determined. But its success or failure will surely be judged by whether it delivers a step-change in housing delivery.

The new NPPF makes some limited changes to the way that development plans will be prepared, with a particular emphasis being placed on the importance of strategic planning and an increased emphasis on co-operation between neighbouring authorities. But the basic premise remains as in the previous version of the NPPF, ie development plans should aim to meet the area’s objectively assessed housing needs unless it is impracticable to do so. Critically though, the NPPF requires local housing need to be assessed by a standard methodology—a major step forward designed to standardise a debate that had got out of control. This should make plan preparation significantly easier.

Decision-making should also become easier with the introduction of the Housing Delivery Test, which in its final form will mean that the presumption in favour of sustainable development (ie the tilted balance in favour of the grant of permission) will kick in if the council has delivered less than 75% of its housing needs over the previous three years. There are transitional provisions to soften the blow but ultimately this should also be a significant factor in securing the delivery of more housing.

Also important is the increased emphasis the NPPF gives to neighbourhood plans—a central plank of the localism agenda. The NPPF specifically states that the tilted balance is unlikely to be struck in the developer’s favour if there is a neighbourhood plan in place that is less than two years old and which makes provision to meet the plan’s housing need, and where the council can show a three-year (as opposed to a five-year) housing land supply, and where it has delivered at least 45% of its housing target over the previous three years. In this way, the government is aiming to gives locals a meaningful voice over development in their area. Neighbourhood plans thus remain a powerful tool in shaping the local environment.

And so, overall, the NPPF adopts a carrot and stick approach—housing should come forward in a planned way, but where those plans break down, permission should be granted unless there is good reason to refuse consent. With its streamlined approach to needs assessment and the introduction of the Housing Delivery Test, the new regime should deliver more houses more quickly.

Undoubtedly the most important changes are those designed to get more houses on the ground more quickly, in particular the introduction of the standard methodology and the Housing Delivery Test. These are long overdue but should make a fundamental difference, streamlining what has become an unnecessarily complex issue.

MW: The new standardised methodology by which councils must calculate housing need (including different forms of housing) aims to deliver more homes in the places where they are most needed, based on factors including the affordability of existing homes. The intention is to provide more certainty regarding the number of homes that should be delivered in each part of the country. The government’s indicative figures show that this is likely to result in increased housing targets in the south and east of England (although some authorities in those areas will see targets reduced).

Planning authorities will be held to account for the number of homes they actually deliver against these targets, rather than how many are planned for. In November 2018, the results of a Housing Delivery Test will be published for every local authority in England. Where a local planning authority cannot demonstrate a five-year supply of deliverable housing sites, or where the Housing Delivery Test indicates that its delivery of housing was substantially below its housing requirement over the previous three years, housing policies in its local plan will be deemed to be out of date for the purpose of determining relevant planning applications. The threshold will be set at 25% below the requirement in 2018, rising to 45% below the requirement in November 2019 and 75% below the requirement in November 2020.

Green belt policies have been strengthened considerably, with a new requirement not to release green belt land for development unless the planning authority can demonstrate that it has examined ‘fully’ all other reasonable options for meeting its identified need for development, including suitable brownfield sites, under-utilised land, optimising the density of development and accommodating the housing need in neighbouring authorities. This effectively introduces a quasi-sequential test to demonstrate that ‘exceptional circumstances’ exist to justify changes to green belt boundaries.

The importance of design in the planning system is further strengthened, emphasising high quality buildings and places as fundamental and with a greater focus on early community engagement during design development. Of particular importance to minor material amendment applications under section 73 of the Town and Country Planning Act 1990 (TCPA 1990) is a new reference to ensuring that the quality of approved development is not materially diminished between permission and completion as a result of changes to the permitted scheme.

A welcome change is the direction that, when considering applications for housing, authorities should take a flexible approach in applying policies or guidance relating to daylight and sunlight, where they would otherwise inhibit making efficient use of a site (as long as the resulting scheme would provide acceptable living standards).

It will be more difficult for developers to avoid paying contributions in agreements under TCPA 1990, s 106 by reference to viability constraints. Viability assessments must be carried out in accordance with a standardised approach, and the weight to be given to them will be a matter for the decision maker having regard to all of the circumstances in the case. Developers will therefore need to take full account of up-to-date planning policies which set out the contributions expected from development when acquiring land and when preparing planning applications.

What are your thoughts on how effective the new NPPF will be in terms of delivering more quality, well-designed homes?

MW: The government’s ambition is to achieve 300,000 new homes a year by the mid-2020s. In a clear move away from its policy of localism (seldom referred to now and not mentioned in the NPPF), this target is imposed on local planning authorities according to the rigid criteria specified in the revised NPPF and the accompanying Housing Delivery Test Measurement rule book.

On the whole, however, policies in the NPPF are more restrictive, giving local authorities less flexibility to accommodate new housing development in their areas. There is little to incentivise developers, with tighter controls over design standards, green belt boundaries, developer contributions and viability appraisals, stronger protection for the environment and the introduction of the ‘agent of change’ principle to new development.

The importance of the revised NPPF has certainly been exaggerated by the government. It represents an evolution of national planning policies, some updates and reforms—but in the main, a large dose of operational continuity. By itself, it will not streamline the planning process, nor will it close the gap between planning permissions and housing delivery. As such it offers no radical solutions to the housing crisis, and is highly unlikely to represent a turning point in the campaign to deliver the quantum of new homes that the country needs.

RW: The new NPPF places increased emphasis on the importance of good design and, in particular, on the importance of early engagement with the local authority and the local community. That is a good thing. But it goes so far as to say that applications that can demonstrate early engagement with the local community should be viewed more favourably than those that can’t. It is unclear how that will play out in practice—it is rare that locals embrace the design of new development, even where there has been early engagement.

So why should an application be treated more favourably just because locals were given an early opportunity to comment on it? There is also a risk of development being delayed by deliberations and negotiations as to a scheme’s design, as well as a greater chance of member overturn on design grounds. In short, it seems unlikely that the new NPPF will herald a new area of significantly better design, and it may in fact slow things down.

Are there any notable omissions from the NPPF?

RW: In large measure, the new NPPF is more of the same, with much instantly recognisable from the old version. It was probably too much to hope for a more radical re-write, but it is certainly regrettable that the government has not taken steps to address other key issues, for example the standardisation/simplification of the use of viability review mechanisms.

There was also an opportunity to revisit some issues, eg the calibration of heritage impacts (substantial versus less than substantial harm) and to provide more helpful guidance as to weighing such harm. But overall the new NPPF is certainly a step in the right direction, and we should see more houses on the ground.

Any other comments you wish to add?

MW: The revised NPPF has immediate effect for the purpose of decision-making on planning applications. However, the 2012 NPPF will continue to apply for the purpose of examining plans where those plans are submitted to the Secretary of State on or before 24 January 2019. These transitional provisions are important to local authorities who are in the process of adopting new local plans, and to developers seeking to promote development in their areas.

The new London Plan will also be assessed against the 2012 NPPF. However, in a letter to the Mayor of London dated 27 July 2018, the Secretary of State made clear that he expects the Mayor to review the London Plan to reflect the revised NPPF immediately once the London Plan has been published. If such a review is not forthcoming, the Secretary of State reminded the Mayor that he has powers to direct the review to ensure the Mayor delivers the increased number of homes that he considers London needs.

The Secretary of State also highlighted policy areas in the draft London Plan that he considers to be inconsistent with national policy, and said he will carefully consider whether to exercise his statutory powers to intervene before the London Plan is published, by giving a direction to avoid any inconsistencies with current national policy or to avoid detriment to the interests of an area outside of Greater London.

This may be a further indication of a move away from localism and a return to the more centralised command and control approach to planning typically seen under the last Labour government.

Robert Walton has an extensive practice in all aspects of planning, public, environmental and compulsory purchase and compensation law. He undertakes work for private clients, central and local government, public bodies, private objectors and interest groups. Robert’s planning work focuses on advising clients in preparation for, and appearing at public inquiries, hearings and in the higher courts. He also advises clients on all aspects of planning law, including policy formulation, development control and enforcement.

Matthew White is recognised as one of the UK’s top planning solicitors, and has more than 20 years’ experience of planning, real estate and development. Matthew advises on a wide range of largescale commercial planning matters and complex mixed-use regeneration projects for high profile clients across the public and private sectors.

Interviewed by Kate Beaumont.

The views expressed by [Lexis®PSL Planning's] Legal Analysis interviewees are not necessarily those of [Lexis®PSL Planning]. 

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