Five-year Land Supply

James Cartlidge Excerpts

Wednesday 4th July 2018 Westminster Hall

[James Cartlidge (South Suffolk) (Con)]

I beg to move,

That this House has considered the five-year land supply.

It is a pleasure to serve under your chairmanship, Sir Christopher, and to have been selected to introduce this important debate. I welcome my hon. Friend the Minister. It is great to see so many colleagues here—their presence underlines the importance of this issue.

The phrase “five-year land supply” sounds innocuous, but it cuts through to one of the most critical parts of the planning system. We all know the national picture. There is consensus that we need to build more homes because of the crisis of home ownership and the fact that housing is very expensive in large parts of the country. Those houses have to be built somewhere. There is often tension in communities about where properties should go, so we rely on our planning system to come to fair decisions about how sites are allocated and developed. I fully accept that the Government require a method for measuring the extent to which councils deliver those homes, but the five-year land supply system—although it is understandable in the way it is set out—is fundamentally flawed. Rather than encouraging the delivery of homes, it encourages speculative development. That is true not only in my constituency; a number of colleagues have spoken to me about it.

Let us understand why the situation arises. If the council or planning authority in question does not have a five-year land supply, rather than local policy taking priority when planning applications are considered, the national planning policy framework becomes the priority. Neighbourhood plans fall away and local policies become far less important.

[John Howell (Henley) (Con)]

Let me correct my hon. Friend. Neighbourhood plans do not fall away. The law was changed, under ministerial guidance, to bring the five-year land supply down to three years where there is a neighbourhood plan that allocates sites and is two years old. My constituents have made a lot of that important concession.

[James Cartlidge]

I know that my hon. Friend was influential in neighbourhood plans. I was going to make that point, which is certainly true, so that was not so much a correction as a preview. I always say to my communities, “If you’re going to do a neighbourhood plan, allocate sites, because it will still be relevant if there is only a three-year land supply.” That incredibly important development was confirmed by Gavin Barwell when he was Housing Minister.

[John Redwood (Wokingham) (Con)]

I fully support my hon. Friend. In Wokingham we have 11,000 outstanding planning permissions and a required build rate of 900 a year. People might therefore think that we had a 12-year supply, but until recently the Government said that we had less than a five-year supply. They do not want to endorse our decision, which makes a lot of sense, to have four major sites with infrastructure and other support.

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[James Cartlidge]

I am grateful to my right hon. Friend. That chimes with the situation in my area and many others, as I have heard from colleagues. I will come back to that point.

To understand why the system leads to speculative development, it is important to understand that when I say local policy becomes less important in the absence of a five-year land supply, I basically mean that it becomes far easier for a developer to get an application through on appeal. That is the nub of the issue. The district may still reject the application, but the point is that a developer with savvy lawyers and all the rest of it can game the system and get their application through on appeal. When it goes to appeal, the local community and local democracy have almost no say and the system becomes unaccountable. My right hon. Friend is absolutely right about that.

One might say, “Hold on a minute, we want to build more homes. Isn’t that the way we should be doing things?” Let me use as an example the district of Babergh, which is entirely within my constituency. Babergh has been charged with providing 7,820 homes over the next 20 years. It has already granted unbuilt permissions for almost 5,000, so almost two thirds of 20 years’ worth of permissions have already been granted, yet we are seen as not having a five-year housing supply. That is extraordinary.

[Scott Mann (North Cornwall) (Con)]

The irony is that that land is sitting on balance sheets rather than being delivered. That precludes smaller builders and developers from taking on sites. Does my hon. Friend agree that we need to find a way to resolve that and allow some of our smaller builders to deliver?

[James Cartlidge]

I know that my hon. Friend is passionate about that issue and has come up with some radical suggestions in that regard.

The experience in Babergh is common around the country, and it underlines my main point. It sounds good in principle to say to councils, “Nimby councils will be held to account—you must deliver the homes,” but they are doing the right thing. They are granting permissions—in fact, they are granting way more than they are meant to—and going through the pain of taking controversial decisions in planning committees and so on, but sites are not being built out.

[George Freeman (Mid Norfolk) (Con)]

I led a debate on this issue earlier this year, which my hon. Friend supported. Does he agree that although we must get the detail right, there is also a question of principle? Through the Localism Act 2011, we set out to be the party that, when in government, gave local communities the chance to shape their future. We are now in danger of looking like we are in favour of speculators, profiteers and out-of-town developers, who dump housing estates that we legislate for, with no responsibility being taken locally. That is not what our party should be about.

[James Cartlidge]

That is an excellent point. The key word, which we will hear a lot in the coming days, is “control.” We call it speculative development because the community loses control. Let us be honest: if an area has a five-year land supply, there will still be controversial planning applications, but those will be determined by the local authority. People will be unhappy about homes being built in—this is a terrible phrase—their backyard, but the point is that the local community will have a say; it will have control.

Colleagues know what speculative applications are like. They come forward, often from a new breed of company called the promoter of a development, rather than from a builder. Those companies work the system to their advantage, putting out brochures that often boast, “Your local district doesn’t have a five-year land supply.” We get extraordinarily unpopular applications that get people marching down our streets, yet we find there is nothing we can do about them. It is not like councils are not doing the right thing; they are giving out thousands of planning permissions.

[Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)]

I congratulate my hon. Friend on securing the debate. As he rightly says, there is a need for local councils to deliver housing where that is appropriate. Mid Suffolk and Babergh failed for a number of years to address housing provision. Only under new leadership, with a new chief executive, did they take the issue forward and look at developing a local plan, underneath which neighbourhood plans will sit. What does he say to those councils, and how can we make councils look at their local housing need and deliver homes for people who need them?

[James Cartlidge]

That is a perfectly fair point. Many councils will have been seen as recalcitrant in the past. My point is about build-out rates. The councils I am talking about are delivering permissions; the issue is the build-out rate. No one disputes that. The Government themselves appointed my right hon. Friend the Member for West Dorset (Sir Oliver Letwin) to review the delivery of permissions, and I very much welcome that.

I am not going to speak for much longer, because colleagues wish to contribute and I think we will be interrupted by Divisions. I have a simple ask. The Government are looking at what measures to bring in to compel, incentivise or encourage development, so that permissions become properties in which people can live. While those powers are not at hand, there should be a transition period during which councils are assessed purely on the number of permissions they grant. If councils do not have the power to compel development, how can we punish them for sites with permission not being built out? That is the core of my ask.

What effect would that have? What would happen if we said tomorrow, “Councils will now be measured purely on the number of permissions they grant rather than on the build-out rate”? The answer is simple: builders would have to build out the sites for which they had been granted permission—hey presto! That is surely how the system should work. The Government clearly do not want this to happen, but as many as 60, 70 or 80 councils do not have a five-year land supply, which means that, rather than more delivery, they get speculative applications that undermine consent for the planning system.

What does this issue boil down to? It is about having sustainable development rather than speculative development. Sustainable development does not mean that everyone welcomes development in their backyard and is excited about 150 new houses being built in their village or market town, but it at least means that they trust the system is legitimate and give it their consent. That is being squeezed out by the five-year land supply system. I simply say to the Minister that he should listen to me and to colleagues when we say that we need to look seriously at reforming this area.

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[John Howell]

It is very rare for me to be cut off in the middle of a sentence, so allow me to sum up where I was before the Division bell rang. In relation to the consultation on the national planning policy framework, I have had conversations with members of the Department about the three-year housing land supply figure. The Department is looking at whether that should be permanent, or, if not, how long it should apply for.

The other change that I have called for as part of my work with the local plan expert group is to ensure that we do not continue to lose the millions of pounds that are lost each year through councils having to go to law to defend their five-year land supply. I have suggested that the five-year land supply becomes part of the council’s annual report, and that once it is in there it is not challengeable in the courts for that year. That gives the council a year’s breathing space each year, once the figure is agreed. As for the calculation of the land supply, I am perfectly open to whether it is based on planning permissions or delivery. I can see the logic for it being a calculation based on delivery.

Members have spoken about how neighbourhood plans are delivering about 10% more houses than were predicted. That is actually quite a lot of new houses. There are something like 2,500 communities across the country that are going through or have been through the process of producing a neighbourhood plan. The results of the referendums have been North Korean in style, as was witnessed in the village in which I live, where the approval rate in the referendum was something over 90%. I think that is a great triumph for everyone who was involved in it.

I remain positive about neighbourhood plans. I have been around the country speaking to those involved in them, and if hon. Members want somebody to come and talk about neighbourhood plans, that is the job that I have, and I am happy to do that for any hon. Member who asks me to do so.

[James Cartlidge]

On a point of order, Sir Christopher. In the great excitement of commencing my speech, I failed to draw the House’s attention to my entry in the Register of Members’ Financial Interests.

[Sir Christopher Chope (in the Chair)]

That is noted; thank you.

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[Nigel Adams]

I have about nine minutes left—that is about right. My thanks go to a great Parliamentary Private Secretary.

Issues with the current five-year land supply model and slow build-out were a key feature of the housing White Paper. The Government are seeking to address that through a package of reforms to the planning system, including revising the national planning policy framework, which will be published this summer. The review of the NPPF is fundamental to delivering the 300,000 homes a year we need, and sets out a comprehensive approach to ensure that we get the right homes, built in the right places and to the right quality.

The revised framework implements around 80 reforms that were announced last year, and retains the emphasis on development that is both sustainable and locally led. Those changes include clearer expectations of local authorities and developers to deliver their commitment to unlock land, fulfil planning permissions, provide essential infrastructure, and ensure that homes are built to meet the diverse needs and expectations of communities. The measures include a standardised way of assessing local housing need; reforming the plan-making system to ensure that every part of the country produces, maintains and implements an up-to-date plan; and an opportunity for local authorities to have their five-year housing land supply agreed on an annual basis. The last two points are particularly relevant to today’s important debate.

It is important that local authorities plan effectively for the new housing required in their areas. Ultimately, new homes need to be provided through up-to-date local plans, produced in consultation with local people and communities. These are a vital element of the planning system. They are the starting point for planning decisions by planning authorities and inspectors. I welcome the progress that Babergh District Council, working with Mid Suffolk District Council, has made with their local plan preparations. I understand that the local authorities are aiming to submit them for examination by the Planning Inspectorate in spring next year.

It is important that adequate land is available to build the homes we need. Local authorities play their part by producing up-to-date local plans and identifying a five-year supply of housing sites. That provides clarity to local communities and developers about where homes should be built so that development is planned rather than the result of speculative applications. Every right hon. and hon. Member in the Chamber will have had experience of that. I have great sympathy with communities that feel that they have no control over planning, and nobody wants to see companies overtly gaming the system. However, we need more homes, and that is why communities should consider a neighbourhood plan—championed by many right hon. and hon. Members here today—to give them more control over the issue.

Demonstrating a deliverable pipeline of housing sites has been a long-standing Government policy. Since the existing NPPF was introduced in 2012, local planning authorities have been asked to identify and update annually a supply of specific deliverable sites, and to demonstrate a five-year land supply. Where the local authority cannot demonstrate that, the lack of supply means that plan policies are not considered to be up-to-date, and applications are assessed against the presumption in favour of sustainable development. However, the presumption in favour of sustainable development does not, and should not, mean development at all costs. Any adverse impacts of the development will still need to be taken into account.

The housing White Paper acknowledged that the current policy has been effective in bringing forward more permissions but has had some negative effects, as we have heard today from my hon. Friend the Member for South Suffolk. In response, we have proposed reforms to how land supply is calculated. The draft revised NPPF includes proposals to allow local authorities to agree their five-year housing land supply position on an annual basis and to fix it for a one-year period. The Department believes that taking up that opportunity should reduce the number and complexity of appeals, and provide greater certainty to all parties.

[James Cartlidge]

The Minister is making a fantastic speech. I am glad he has reached that point about appeals, because it seems to me very welcome that once someone has the five-year land supply and it has been signed off, they then have 12 months of security. At the moment, as soon as a council says, “We’ve got the five-year land supply,” there can be an immediate appeal by a developer and the certainty goes away. The issue therefore arises with councils that do not yet have the five-year land supply and do not have that security, but are giving many permissions. Can there be greater flexibility on that, as my hon. Friend the Member for Milton Keynes South (Iain Stewart) suggested?

[Nigel Adams]

My hon. Friend raises a valid point. We are hopeful that that will go a long way to eradicating some of the issues that he and right hon. and hon. Members have experienced. The idea is that it can be fixed at a one-year period. We will also see what other reforms are proposed as part of the review that my right hon. Friend the Member for West Dorset (Sir Oliver Letwin) is planning.

It is worth mentioning that in return for being allowed to agree their five-year housing land supply position on an annual basis and to fix it for a one-year period, local authorities will need to be more realistic in planning to meet housing needs. The draft NPPF includes further clarity on how to calculate five-year land supply, and we intend to provide further guidance to support local authorities in their role.

I know my hon. Friend the Member for South Suffolk has concerns about the time that it takes to build homes after sites are identified and permission is granted. The Government want homes to be built faster, and expect house builders to deliver more homes, more quickly and to a high standard. However, as my hon. Friend mentioned, it is important to recognise that after planning permission for new homes is granted, a variety of factors can prevent development from starting and can slow down delivery.

Last year, my right hon. Friend the Member for West Dorset was commissioned to examine what can be done to speed up building on major sites. The review has been looking into the build-out of sites that have been granted planning permission. The aim is to close the significant gap between housing completions and the amount of land permissioned for new homes. The initial analysis, which was published last month, has presented some interesting findings on the delays in building out large sites and what helps to speed up build-out rates. I look forward to reading the final report, which is due in the autumn.

Coming on to the points raised by right hon. and hon. Members, my hon. Friend the Member for South Suffolk talked about local communities not having a say on speculative development. Applications for speculative development are still subject to local consultation, as are all planning applications. He also mentioned, as others did, that existing permissions are not being taken into account. The draft NPPF encourages the use of shorter timescales for starting development before the permission will expire, to encourage developers to build the permitted homes more quickly.

The hon. Member for Stroud (Dr Drew), who is flying the flag brilliantly for Her Majesty’s Opposition, talked about viability assessments. We recognise those concerns and, again, the draft NPPF includes new policies on viability assessments. My right hon. Friend the Member for Arundel and South Downs (Nick Herbert) talked about burning effigies at the start of his speech; that was slightly worrying, as I live in York, where Guy Fawkes was from. I hope my right hon. Friend takes that into account. Neighbourhood planning protection was included in the draft NPPF. We consulted on the draft wording, and I thank him for his continued work and suggestions in this area. We are considering those responses and will publish the final NPPF in the summer.

My hon. Friend the Member for North Cornwall (Scott Mann), who I cannot see in his place, talked about what we are doing to encourage small developers. We need to support small and medium-sized house builders and bring forward a greater variety of sites. My hon. Friend the Member for Henley (John Howell), who does a fantastic job as the champion of neighbourhood plans, said that the Government do not know how many authorities have a five-year land supply. Guidance is being produced to advise local planning authorities on how to publish their supply figure, so it will be publicly accessible.

I thank and pay tribute to Councillors Lamb and Stephenson, the hard-working councillors of my hon. Friend the Member for Elmet and Rothwell (Alec Shelbrooke), who continue to fight for their local communities but appear to be being ignored by their local council, Leeds City Council. I hope that Leeds will have heard today’s debate and my hon. Friend’s excellent contribution. My hon. Friend the Member for North East Derbyshire (Lee Rowley) talked about the reporting of a five-year land supply. Alongside the—