Not Again – Brandon Lewis with even More #NPPF tweaks by Letter

Yet again tweaks to guidance via letter being used as a proxy for the now almost weekly policy changes to the NPPF.  This time in a letter to the planning inspectorate.

Brandon Lewis is clearly learning on the job and its not a pretty sight.

The letter

Dear Simon,
Strategic Housing Market Assessments
I am writing to ensure our existing policy position on emerging evidence in the form of Strategic Housing Market Assessments is clear.
We have set out in our recent guidance that a Strategic Housing Market Assessment is just the first stage in developing a Local Plan and councils can take account of constraints which indicate that development should be restricted
The extent of constraints will be justified on a case by case basis for each Local Plan, depending on particular local circumstances, within a housing market area. Many councils have now completed Strategic Housing Market Assessments either for their own area or jointly with their neighbours. The publication of a locally agreed assessment provides important new evidence and where appropriate will prompt councils to consider revising their housing requirements in their Local Plans. We would expect councils to actively consider this new evidence over time and, where over a reasonable period they do not, Inspectors could justifiably question the approach to housing land supply. However, the outcome of a Strategic Housing Market Assessment is untested and should not automatically be seen as a proxy for a final housing requirement in Local Plans. It does not immediately or in itself invalidate housing numbers in existing Local Plans.
Councils will need to consider Strategic Housing Market Assessment evidence carefully and take adequate time to consider whether there are environmental and policy constraints, such as Green Belt, which will impact on their overall final housing requirement. They also need to consider whether there are opportunities to cooperate with neighbouring planning authorities to meet needs across housing market
areas. Only after these considerations are complete will the council’s approach be tested at examination by an Inspector. Clearly each council will need to work through this process to take account of particular local circumstances in responding to Strategic Housing Market Assessments.
As you are aware, the Secretary of State can recover appeals, for example where he considers that they raise issues of national importance. This is important to support the application of relevant policies at national level.

I have highlighted what is new.  Clearly the implication was the last ad hoc and not consulted on revision was not clear.

The old guidance made it celar that the SHMA was just the first step, what is new is the assumption that LPAs should be given time to assess evidence.  Previously I have recommended ton this blog that 1 year was reasonable after new HH projections to complete a revised SHMA.

The reference to Green Belt being a ‘policy constraint’ and the DTC making up shortages from constrained housing is a slight reigning back from the last set of guidance and really should have been their from the outset.  It makes it clear that the constant is not an absolute one, that policy needs to be supported by evidence and if you keep a GB constraint you make up the need elsewhere.

But there is still a black hole.  Following the Hunstan and Solihull cases it is clear that the NPPF is a radical break which made  local plans not meeting OAN in full out of date overnight.  Though the new letter makes it clear that LPAs  need reasonable time to consider new evidence many plans were out of date even with old evidence.  The Planning inspectorate could usefully seek clarification on what to do in those circumstances, and secondly how to calculate on S78 appeals the 5 year supply (especially with RS withdrawn) given that ministers are no saying that you cant automatically rely on SHMA numbers on a district by district basis.   If you cant claculate the 5 year supply, how can you apply para 14 of the NPPF.

Brandon Lewis is making it up as he goes along, one fix creating ever more problems requiring ever more fixes.

He gives the impression of not liking the central plank of the NPPF, using 5 year targets as a punitive stick to get LPAS to adopt local plans meeting OAN in full.  He would much rather they were ‘slow coaches’ and didnt rock the bopat with new housing supply and green belt release until after the election.

If he doesnt like this then he should just scrap or amend para. 14 and not mess everyone around.

Should Objectively Assessed Need Include a ‘Policy on’ or ‘Policy Off’ Employment Growth Assumption

Not a straight forward question to answer especially if you happen to live in Oxfordshire where the difference between the two doubles the housing numbers.  Lets take the arguments step by step then assess the current debate.

There is no doubt from NPPG that there should be an assumption of balance between job growth and housing growth.

Paragraph: 018 Reference ID: 2a-018-20140306

How should employment trends be taken into account?

Plan makers should make an assessment of the likely change in job numbers based on past trends and/or economic forecasts as appropriate and also having regard to the growth of the working age population in the housing market area. Any cross-boundary migration assumptions, particularly where one area decides to assume a lower internal migration figure than the housing market area figures suggest, will need to be agreed with the other relevant local planning authority under the duty to cooperate. Failure to do so will mean that there would be an increase in unmet housing need.

Where the supply of working age population that is economically active (labour force supply) is less than the projected job growth, this could result in unsustainable commuting patterns (depending on public transport accessibility or other sustainable options such as walking or cycling) and could reduce the resilience of local businesses. In such circumstances, plan makers will need to consider how the location of new housing or infrastructure development could help address these problems.

I dont think this is necessarily that clearly or simply worded.  What ‘assessment’, what ‘assumptions’?  It gives examples of how things can go wrong without a clear statement of what the baseline employment assumption is and whether that forms part of OAN is is a ‘policy on’ assumption on top of that.

The PAS guidance goes a little further with a useful case study.

From Inspector’s advice, for example in Bath and North East Somerset (BANES), it is clear that future labour market requirements cannot be used to cap demographic projections. In other words, if demographic projections do not provide enough resident workers to fill the expected workplace jobs they should be adjusted upwards until they do. But if the demographic projections provide more workers than are required to fill the expected jobs, they should not be adjusted downwards. If both a job-led projection and a trend-led demographic projection have been prepared, the higher of the two resulting housing numbers is the objectively assessed need. The rationale for this, as explained by the BANES Inspector among others, is that much of the demand for housing is not driven by job opportunities, and people who do not work also need somewhere to live.

Bath and North East Somerset Core Strategy Examination, Inspector’s preliminary conclusions on strategic matters and way forward – June 2012 , 

But a quite different conclusion was reached recently in Leicestershire.  (S62a/2014/0001) in relation to a case in Leicestershire, Inspector Jonathan King stated that a FOAN (SHMA) must be ‘policy-off’

So do we use the BANES method or the Leicstershire Method?  Sigh this could take over from Liverpool v Sedgefield in planorak tedium.

Ok lets take things from first principles.  It is quite legitimate in my view to set an OAN ‘policy off’ baseline and then add various policy assumptions.  But it is important if you do so that the OAN baseline is accurate and reflects a plan which might be found sound.  The fundamental national policy is that OAN is met in full. So a baseline must reflect economic growth that meets national policy and is not policy constrained.  Such as constraints from lack of housing.  However if an LPA wants to adopt an aggressive job creating go for growth policy on top of ‘normal’ growth that is a ‘policy on’ assumption after OAN.

There is a flaw in the BANES approach mentioned by PAS.  If one LPA is a growth node that adopts a jobs led approach to employment growth – but is constrained so it can develop all the housing this implies, and the another is a net commuting authority that accepts the housing overspill under the DTC but adopts a more housing led approach capping jobs because it is an unsustainable location for major employment growth then surely this is fine as the two balance out net.  However if you adopted the higher of the two on the BANES principle you would systematically oversupply.

That is the problem with the BANES principle.  The OAN just wont add up over a HMA or nationally to hit global OAN.

In the short run all housing targets need to be housing led as it is not easy to move, in the longer run however they need to be jobs led as people who can move to work will.  It is acceptable therefore to mesh housing led and jobs led approaches as long as you are consistent across an HMA and with net migration assumptions and don’t constrain housing and jobs growth in the ‘policy off’ baseline.

Certainly some of the Oxford SHMA assumptions based on a Cambridge Economics model look like double counting as some of that growth would have been part of the baseline. Also some of the assumptions seem odd and some of the criticisms of CPRE unjustified.  It includes a backlog figure against SEP targets.  Whenever you have new census and national household projections this resets the household formation figures and to include a backlog against a dated plan can result in double counting.   There is a long thread on the PAS forums on this including a comment by a ONS statistician in support of the double counting point.   However as well as meeting new household formation you also have to meet a backlog of housing for people in existing household who would form a household if they could afford to do so – concealed/suppressed households.  The guidance on this latter point is quite clear.