Comment

NPPF2: Here we go again

Theresa May’s volte-face last week, abandoning an early summer recess for Parliament, allowed MHCLG to keep its promise to publish the revised version of the NPPF today, 24 July.

A raft of new documents are available including the revised NPPF and PPG, along with guidance on the Housing Delivery Test, Viability and Housing and Economic Needs Assessment.

We will review all and share our thoughts over the coming days, but here are our immediate reactions to the key changes.

Transitional arrangements

The NPPF comes into immediate effect for development management, but there are transitional arrangements which mean any plan submitted before 24 January 2019 will be assessed against the previous NPPF and PPG. Some authorities will decide to go early or go late depending on whether their housing needs are likely to be higher or lower under the new regime.

Standardised methodology for housing need

The Government has conceded the limitations of its standardised methodology for housing need which remains unchanged from the September 2017 draft but will be reviewed in September 2018 when 2016-based household projections are released. It is however reassuring to see that any adjustment will be explicitly aimed at delivering 300,000 homes annually by the mid-2020s. It is hoped that the Government will take the opportunity to step back and address other flaws in the methodology, which currently serves to create significant regional disparities and fails to link with the national Industrial Strategy.

Housing Delivery Test

The updated ‘presumption in favour of sustainable development’ at paragraph 11 (and the associated footnote 7) clarifies that the presumption will apply where housing delivery is below 75% of the requirement; in line with the Housing Delivery Test. This threshold remains unchanged from the draft and will apply from 2020, with transitional arrangements in place for 2018 and 2019. Where delivery falls below 95% over three years, authorities are required to prepare an action plan to assess the causes of under-delivery and identify actions to increase delivery.   

Use of viability evidence

The Government’s stance on the use of viability evidence to support plans and site-specific proposals has tipped the balance firmly in the favour of local authorities with the onus on the promoter to engage in plan-making, to reflect policy costs in their proposals, and to ensure development proposals are compliant. Landowner’s returns will be firmly based on EUV Plus (i.e. ‘bottom up’) methodology and recommended developer’s profit margin has been adjusted down from 20% on GDV in the draft to 15-20% in the new guidance. All viability assessments are to be published in full (with redaction only in exceptional circumstances); and support is given for review mechanisms to be introduced for any schemes where provision of planning obligations, including affordable housing, are reduced below policy compliant levels. For both landowners and developers, the few positives are the necessity for Local Plan policies to be ‘iterative’ in drafting, ‘realistic’ and ‘deliverable’; and the role of ‘alternative use value’ (AUV) has been safeguarded in benchmarking land value. Crucially, there remains an ability to conduct site-specific viability assessment where site/infrastructure costs demonstrably increase, economic performance changes significantly or if proposing Build-to-Rent or older persons housing schemes.

Support new and growing sectors of the economy

There is recognition of the importance of planning to support new and growing sectors of the economy with the addition of paragraph 82 which says that policies and decisions should recognise and address the specific locational requirements of different sectors of the economy. Importantly, this recognises high technology industries but also storage and distribution operations which are often inadequately planned for in the current generation of local plans but represent an integral part of a modern economy.   

Small sites requirement

Recognising that the 20% small sites requirement was unrealistic, amended paragraph 68 reduces this to 10% of the overall housing requirement with a size threshold of 1 hectare (not half a hectare).

Neighbourhood Plan

Four criteria must now be met if a Neighbourhood Plan is to outweigh the presumption (see paragraph 14): it must have been made for two years or less; it includes policies and allocations to meet its identified housing requirement; the local authority must be able to demonstrate at least a three year housing land supply; and the local authority must be able to demonstrate housing delivery of at least 45% over the previous three years.

Good design

There is more direct recognition now that good design is a key aspect of sustainable place making. Design policies should be developed to reflect local aspirations and character. These provide a framework for creating distinctive places, with a consistent and high quality standard of design. This latest NPPF leaves no doubt that design and design quality and crucial pillars in the planning development and building process.

Watch this space for further comment...

24 July 2018