Planning in Numbers

This is the tenth annual Savills planning report, and it is produced during a time when planning and housebuilding is rising up the political agenda in England. The long-awaited revisions to the NPPF were consulted on earlier this year, the Levelling Up and Regeneration Bill is currently progressing through Parliament, and the Labour Party has begun to set out its plans for increasing housebuilding.

How far are any of the proposed changes rooted in the data surrounding the current plan-led system? Will the proposed changes from all sides of the political spectrum target the obstacles currently facing developers? In this report, we investigate the plan-making process since the introduction of the NPPF, the volume and type of sites that are coming through the planning system and what that means for housing delivery, and consider what appeals data can tell us about the health of planning in England.

Plan-making progress

In the year to March 2023, just nine English local authorities adopted a new or revised local plan, well below the annual average of 24 newly adopted plans since the introduction of the NPPF in 2012. More positively, discounting recently merged local authorities, 80% of England is now covered by a post-NPPF local plan. Up-to-date plans play a critical role in ensuring local authorities have allocated sufficient land to meet their housing and employment needs. Nevertheless, that still leaves 64 local authorities, plus twelve newly formed local authorities, without an NPPF-compliant plan more than ten years since the framework’s introduction.

Once a plan has been adopted, local authorities are required to update it every five years. Of those local authorities with a post-NPPF plan, half (132) are currently undertaking a review to update their planning policies. A further 17% of authorities are due for a review but are yet to begin the formal review process – up 5% from last year and reflecting the wider slow-down in plan-making. 56 LPAs have delayed or withdrawn their local plans since 2021, with many citing the continued policy uncertainty as the reason for delay.

Five-Year Land Supply

Supply of land for new housing remains a key issue for many local authorities in England, particularly in areas with significant land constraints. As of April 2023, nearly half (48%) of local authorities were found to lack a five-year land supply, up from a third in last year’s report. This highlights the consequences of a planning system paralysed by a lack of policy clarity on meeting housing need.

The government is currently consulting on proposals to remove the requirement to demonstrate five years supply if local authorities have adopted a local plan in the last five years, and limiting the role of the five-year land supply figure in appeals. Over the last year, 23 local authorities have claimed five or more years’ supply in their latest statement and were later found to be unable to prove it at appeal.

Housing Delivery Test

The government is yet to publish the 2023 Housing Delivery Test at the time of writing, which has been published in early Spring in previous years. This is problematic due to the test being a key metric used in planning appeals. The lack of up-to-date information inhibits the planning system from making better decisions around what housing is needed where.

In place of the official test, Savills has simulated the test using data from the last three years to March 2023. We have found that only 61% of English local authorities would pass the Housing Delivery Test. The failure rate has increased compared to the previous year’s pass rate of 72%, in part due to the adjustments to account for the effects of the pandemic being phased out. 80 local authorities – over a quarter – failed to meet 75% of their housing need, and so will face a presumption in favour of development for the next twelve months.

Implications

The government, through the draft, NPPF is still requiring regular reviews of local plans (at least every five years), placing continued emphasis on the plan-led system. Apart from in London, nothing strategic exists in the English planning system, leaving many LPAs to plan independently with regard to the soon-to-be abolished duty to cooperate. Significant resourcing issues continue to impede prompt local plan production, which the government proposes to address, in part, by weakening the examination tests for local plans.

In respect of five-year housing land supply, where land is not otherwise constrained (for example, Green Belt or AONB), the application of the presumption in favour has still proved a useful stick to encourage LPAs to produce a local plan. Though, it is clear that areas of high development needs are lagging on plan production and, in some of these locations, there remains no effective sanction for not planning positively. Furthermore, the government proposes to alter the Housing Delivery Test at a time when delivery trends are likely to come under greater scrutiny.

Read the articles within Planning Research 2023, below: