NPPF ‘tweaks’ announced plus changes to developer payments

The Government has launched a consultation on changes to the National Planning Policy Framework, however planners have pointed out that it’s reforms to a sister document on developer contributions which could have the biggest impact on the housing sector.

The NPPF was launched in 2012 and guides development across England. In the Government’s 2017 Budget, Chancellor of the Exchequer Philip Hammond revealed there would be changes to planning legislation, and a consultation document released yesterday outlines where these could occur, including putting penalties in place for local authorities which don’t have a Local Plan or five-year housing land supply.

Simultaneously, the Government has issued proposals on altering developers’ financial contributions made to councils to pay for local infrastructure and services. These include changes to section 106, the Community Infrastructure Levy and Strategic Infrastructure Tariffs.

A reform of developer contributions could see new powers given to combined authorities such as Liverpool City Region and Greater Manchester, to set their own Strategic Infrastructure Tariffs, similar to a system currently in place in London. Local authorities are also to be allowed to charge a Community Infrastructure Levy based on the existing use of land.

While the focus at present is on changes to local powers, the document includes the potential for a “national and non-negotiable level of developer contributions”, which would be controversial if implemented.

In statements over the weekend, Prime Minister Theresa May said that young people “had a right to be angry” over difficulties in buying housing. The foreword to the consultation document continued this theme: “The Government is determined to fix the broken housing market and restore the dream of home ownership for a new generation. There is no single solution to this problem and we are taking action on all fronts.

“It is vital that developers who are building these homes know what contributions they are expected to make towards affordable housing and essential infrastructure and that local authorities can hold them to account. It is right to consider whether a higher proportion of affordable housing can be delivered where there is a higher uplift in land value created by development.

“However, it is clear that the current system of developer contributions is not working as well as it should. It is too complex and uncertain. This acts as a barrier to new entrants and allows developers to negotiate down the affordable housing and infrastructure they agreed to provide.”

The consultation on the revised NPPF and developer contributions continues until 10 May. The consultation response page for the NPPF can be found here, and for developer contribution changes here.

Dan Mitchell, partner at Barton Willmore, said: “Stronger penalties for authorities who do not have an adopted Local Plan or proven housing land supply in place are necessary to ensure that we deliver properly planned development, address undersupply and support economic growth across the country – but it will be a big ask for councils to review a Local Plan every five years. If it can be achieved, it will give many councils with adopted plans the impetus to deliver more quickly on major, allocated sites.”

Mitchell predicted that “its sister document will have the biggest impact on the housebuilding industry”, continuing: “The consultation paper refers several times to one option the Government is considering which is to set a national and non-negotiable level of developer contributions. The inference here is that a nationally set tariff would cut out all negotiation, create certainty and speed up housing delivery. Whilst the stick approach is clearly on the national radar, the document does not go that far, for now.”

Industry reacts

Conor Vallelly, associate at How Planning, said: “Both the Prime Minister and Secretary of State Sajid Javid have been at pains to acknowledge and highlight the major shortcomings of the housing market in England, however the amendments proposed to the NPPF would appear to be a continuation of the theme of incremental change, and cannot be described as radical. The sheer scale of the housing crisis requires fundamental change to the way housing is both planned for and delivered, and the consultation will be a disappointment to those expecting major change. It can best be described as an attempt to further streamline the system and a tweaking of existing guidance.”

Anthony Aitken, head of planning at Colliers International, commented: “It seems rather ironic that housebuilders were criticised in the NPPF announcement for not building enough homes and were asked to ‘do their duty’ to achieve this aim. This does not strike me as the means to motivate the housebuilders to address this crisis – it seems to be more a case of direct criticism without understanding the wider factors. The consultative NPPF could have suggested that the green belt, as a land use, needs to be reviewed nationally, as its founding reasons in 1947, need to be reassessed to meet society’s modern needs, namely housing our population.”

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