Local Housing Need Assessment Reform

John Milne Excerpts

Tuesday 13th May 2025 Westminster Hall

[John Milne (Horsham) (LD)]

I beg to move,

That this House has considered reform of the standard method for assessing local housing need.

It is a pleasure to serve under your chairship, Mrs Hobhouse.

Everyone agrees that across much of the country, homes have become far too expensive either to rent or to buy. There is less consensus on the best way to get things back under control. I will argue that throughout the history of the standard method for assessing local housing need, that method has been part of the problem, not the solution.

For a long time, the free market ideology we followed was to build houses randomly until the price came down. Ever since the days of Margaret Thatcher, who single-handedly killed off the public sector contribution, we have never got anywhere near to keeping up with demand. In recent years, the strategy has been to set stiff compulsory building targets and, to that end, the Government introduced the standard method.

We were told that the method would produce clear, objectively determined house building targets for every local authority. We were assured that they would be equally and fairly distributed in line with genuine local need. We can now confidently say that that failed. Many authorities got nowhere near their number. Sometimes that was through dragging their heels, but often it was because their individual targets were outright bizarre and unachievable.

Meanwhile, the system has kicked up terrific public anger and opposition, which in itself gets in the way of success. At times, the Government have resorted to wielding a bigger stick or they have backed off in the face of Back-Bench pressure. Under the present Government, we are heading back towards the big-stick approach. There is almost no attempt to win consent.

I will argue not only that the standard method failed to do what it says on the tin, but that the failure was inherent from the first. It never stood a chance. Far from solving the affordability crisis, the method has significantly contributed to making that crisis worse, and it will continue to do so even under the remodelled version announced before Christmas, because it is based on a false premise.

To be absolutely clear, this is not about national targets. Whether we aim nationally for 200,000, 300,000 or 400,000 homes a year is a separate debate, and I hope we will not get sidetracked by that today. It is easy to tweak the standard method to meet whatever national target we want it to meet, but in practice, national targets have been not much better than slogans, such as Boris Johnson’s 40 new hospitals, which never existed in reality. Instead, it is the local target as applied to individual planning authorities that matters.

Broadly speaking, the standard method compares local house prices to local wages to estimate an affordability ratio, and it adjusts targets upwards if that shows prices to be unaffordable. The sums have been fiddled with many times since the method was introduced, and I do not doubt that such a process will continue. That is where the first big failure comes in: the standard method is supposed to provide an objective assessment of local housing need but, if we were honest, we would acknowledge that it is actually designed to reflect national need.

For example, in my constituency, the growth target based on existing households should now be 527 a year, but our poor affordability ratio takes us all the way up to 1,329 a year, and that is before we add on more for our neighbours. That is a whopping uplift by any stretch of the imagination. The face of Horsham district is changing at breakneck pace. Villages such as Billingshurst and Southwater are on the way to doubling in size in less than a decade. That is not because Horsham is experiencing some kind of spectacularly large birth rate; it is just an arbitrary calculation.

Once again, to be clear, I wholly accept that this is a national problem and that we need national solutions. Every area, including Horsham, has its role to play, but it is insulting people’s intelligence to describe that as a local need, when we plainly have nowhere near enough locals to go around, and they mostly cannot afford the new homes anyway. If we keep telling obvious lies to people, how will we ever win public consent? This brings me to the next big failure of the standard method, which is that there is no meaningful public scrutiny. Most local councillors do not understand how it works, sadly, let alone the general public. The standard method is never an election issue, yet it has a massive impact on our communities. In this case, ignorance is not bliss. It is a big reason why Conservative councillors have, election after election, proclaimed their commitment to allocating brownfield sites over greenfield yet somehow ended up doing the exact opposite. They cannot do anything to stop the logic of their own inflexible system. The standard method is a kind of mathematical bulldozer, sweeping aside our open spaces.

The single worst failing of the standard method is that it fails in the very purpose that it was supposed to be designed for. In Horsham, as in many areas, the average price of a new house is higher than that of our existing stock. Ironically, the more houses we build, the worse our affordability ratio gets, and the higher our target will be next time around. The standard method does the exact opposite of what it is supposed to do. The more housing that is built, the more the method asks to be built, with no obvious mathematical limit.

I stress again that I completely agree that building many more houses than we have over the last 40 years is an essential step on the path to affordability. However an obsession with one arbitrary number, without thinking what goes into it, does not work. It is actually getting in the way of success. We have to focus attention on the type of housing we are permitting, not simply the raw total. The standard method is based on a false premise, because many things affect prices besides the house building rate.

[Andrew George (St Ives) (LD)]

I am very grateful to my hon. Friend for giving way and sorry I missed the first minute of his speech. I warmly congratulate him on the point that he is making. I agree that what he describing is a false premise, in the same way that the targets themselves are based on a delusion. The delusion is that private developers would be prepared to collude with Government to drive down the price of their final products in order to deliver affordable homes. That clearly is not the case. The combination of these two things is working against what the Government are trying to achieve, which is to meet housing need.

[John Milne]

I thank my hon. Friend, who makes a very good point. The system is working almost to the reverse of what was intended.

In my constituency of Horsham many people either work for London businesses or perhaps have traded down from a more expensive London property. From their point of view, Horsham represents excellent value. The official affordability ratio does not reflect real working conditions in Horsham for locals, and therefore overstates local targets.

Local councillors all strive to get the best for their communities, but the way we receive targets under the standard method destroys our negotiating position with developers. Developers are not stupid. They can work out as well as anyone else how many sites are needed to meet our targets. They have no need to concede on civil amenities or on affordable housing because they know that, at the end of the day, they have got the council over a barrel.

I have no issue with a private developer seeking to make a profit—what else do we expect them to do?—but do not rely on them to do social planning. In areas like Horsham, years of free market ideology have turned councils into mere editors of private developer proposals. We build on greenfield sites because they are the only ones that get presented. There is literally nothing else to choose from in Horsham. The free market approach to affordability does not work for the housing market. Competition has driven prices up, not down. In Horsham we would arguably be better off if we granted a monopoly to one single developer and let them push down local land prices.

To add insult to injury, we also have the standard method’s bullying friend, the housing delivery test. I am not sure whether there ever was a carrot in this process, but the HDT is definitely the stick. Failure to meet targets can ultimately result in losing local control over planning altogether. It is a Catch-22 situation: the developer controls the rate of delivery, but the council pays the price if targets slip. Heads they win, tails we lose.

In fact, the single biggest factor that influences prices has nothing to do with house building. It is availability of credit. If interest rates were to double tomorrow, the price of a mortgage would soar and we would see a house price crash, yet all that would happen without a single new home being built. A succession of policies under the Conservatives only served to make the problem worse, not better. Subsidies such as Help to Buy or stamp duty holidays simply inflated prices further, like a giant Ponzi scheme. The market adjusts, and the subsidy ends up in the pockets of developers until the next upward turn in the spiral.

Therefore, any analysis of UK house building must take into account the key role of finance. Since Thatcher, houses have come to be seen not simply as homes but as investments. In line with that, the explosion of the buy-to-let market in the 1990s correlates suspiciously closely with overall house price inflation. Older generations benefited from decades of property asset inflation, but today it is getting harder and harder to board that train. Putting all that together, it is clear that the standard method is getting its social sums all wrong.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I congratulate the hon. Gentleman on securing this very important debate. He mentioned some of the incentives for first-time buyers. Through the stamp duty discounts, we saved the typical first-time buyer around £6,000 on their purchase, which helped about 640,000 young people get on to the housing market. Is he saying that he is not interested in that and that it was the wrong thing to do to help those first-time buyers on to the housing ladder?

[John Milne]

For the individuals who benefit, no one can argue with it. It is the same with the sale of a council house—if you are the family that gets it, it has clearly given you a massive uplift. What I am saying is that we have a national societal problem to solve in the housing market in general. We have a certain amount of money to put towards it. That was a subsidy. There are far better things to do with that subsidy that do not inflate prices further, as that simply eats up the subsidy.

As I was saying, putting all that together, it is clear that the standard method is getting its social sums wrong. The affordability ratio is actually a lousy proxy for actual housing need. What we need to do is factor a proper analysis of local housing conditions back into the system. That should include an assessment of local homelessness rates, the need for social housing, pensioner poverty and all the other factors that make communities tick. We also need to find a clear role for neighbourhood plans. Neighbourhood plans started as a great way to bring local consent and local knowledge into housing, but from the day the standard method was introduced, they have been effectively overruled. In the latest planning reforms, they were completely marginalised and were not even mentioned.

How can we change the standard method to do the job it is supposed to do? I suggest at least two inputs: a local needs calculation, which focuses on helping local people into the homes they need, and a national needs top-up. Having a separate national needs figure will help us to focus on the delivery of new towns. When our housing needs are as great as they are, new towns are essential. In contrast, the standard method spreads targets indiscriminately across every area. It leads to endless incremental add-ons to existing settlements until they begin to lose their identity altogether. In rural areas such as mine, the standard method has an inherent tendency to create low-density suburbs. Not only do they tend to be more expensive houses, but they use two or three times as much land as they strictly need to.

[Martin Wrigley (Newton Abbot) (LD)]

I thank my hon. Friend for securing this valuable debate. Does he agree that, as well as causing the issues he described, incremental building contributes to problems with the sewerage systems? If a developer builds 50 houses here, 50 houses there and 50 houses elsewhere, and each one is considered on its own merit, it does not warrant an upgrade to the sewerage systems, so the water companies do not upgrade, systems become overloaded and we start getting sewage in the water.

--- Later in debate ---

[John Milne]

Yes, it makes strategic planning very difficult. Provision of infrastructure, particularly in rural areas, is a major problem and not sufficiently built into the planning system to compensate for it. It is easier in urban centres where the infrastructure is already in place.

This is the reason we have contrived to have perhaps as many as 1.5 million unbuilt permissions nationally, at the same time as a national housing shortage. That is because too many of them are permissions for unaffordable and, therefore, unbuildable homes. There is a degree of land banking but, for the most part, developers build as fast as they can sell. If they are serving only the top end of the market, that will be slowly. As Oliver Letwin described in his excellent 2018 report, sadly unacted on by the Government of the day, we need far greater variety in housing type.

As much as 80% of housebuilding is aimed at the top 20% of the market. The fastest way to fix that is to build a guaranteed quota of social housing. My party is asking for 150,000 a year. I guarantee they would be snapped up like hot cakes, as fast as they could be built. There is a fundamental difference between permissions and actual, physical houses. If all we ever think about is permissions and alleged impediments to permissions, we will never get to grips with the problem. Wrong permissions do not increase supply, they suppress it. Wrong permissions bake high land prices into the system. Handing out more permissions like confetti simply chokes the system with unbuildable sites that will hang over the market for a generation. There are lots of ways the standard method could be reinvented, but any future form must empower local authorities to deliver social housing in significant numbers from day one. How we do that is up for grabs, but somehow it must be done.

[Wera Hobhouse (in the Chair)]

I intend to give the lead Member two minutes at the end of the debate at 3.58 pm. I will call the spokesperson for the Liberal Democrats at 3.28 pm. I will not impose a formal speech limit for the time being. I hope there is time for everybody to come in.

--- Later in debate ---

[John Milne]

I thank the Minister for his reply and all Members for their very interesting contributions. One thing that is really striking is that we see the same problem up and down the land. It may manifest itself locally, but it is a national problem.

Like many Members of this Parliament, I come from a local council background—I was the cabinet member for planning in Horsham district council—so I have personal experience of trying to get what we needed for the community out of the plan and developers. It was a battle. My reaction to the changes made to the standard method and to the Planning and Infrastructure Bill, which is currently in Committee, is to say, “Would that have given me the tools I needed to do the job? Would it have improved my chances?” I feel that the answer is, “Not really, no.” That is the standard by which I judge it.

Changes to the standard method could really enhance—make or break, actually—what the Government are doing in the Planning and Infrastructure Bill. It is not just a technicality on the side, but a crucial interface. I realise that the Minister will be a bit distracted, given that the Bill is going through Parliament right now, but I hope that in the fulness of time he will take a closer look at the measure, because it can be revised at any point and does not require legislation. I again thank everybody for a very good-natured debate.

Question put and agreed to.

Resolved,

That this House has considered reform of the standard method for assessing local housing need.

Parking Regulation

John Milne Excerpts

Tuesday 6th May 2025 Westminster Hall

[Martin Wrigley (Newton Abbot) (LD)]

It is a pleasure to serve under your chairmanship, Mr Efford. I congratulate the hon. Member for Derby South (Baggy Shanker) on leading this debate, which has been a collaborative effort and is beautifully well attended.

Many private parking companies aim to make their record-making profits from the demands they issue via penalty charge notices, not being satisfied with their advertised parking fees. There is no incentive for them to operate fairly, to make PCN rules straightforward or clear, or to run a genuine appeals process. This model has worked on intimidation and threats, with the companies knowing that a fair proportion of people will be intimidated into paying. The process rapidly escalates into debt collection threats and solicitors’ letters. This cycle of threatening letters, which are often referred to as threatograms, tends to continue regardless of appeals or evidenced facts.

The companies will point to their own independent appeals processes; however, such processes are neither independent nor fair. In fact, they are run by the trade associations: the British Parking Association and the International Parking Community. These organisations are directly funded and directed by the private parking companies, the biggest of which are owned by US private equity groups. For too long, this industry has been allowed to set its own rules and mark its own homework, always at the expense of the motorist, and the RAC and AA agree.

There is a legitimate need for parking management to prevent abuse, but costs and tactics are out of proportion to any legitimate aims. Primary legislation already exists to create a truly independent regulator. We urge the Minister to progress the consultation on the existing draft code of conduct and set up the new regulator that is clearly necessary. These private parking companies are out of control, causing misery for far too many motorists. It has to stop.

[John Milne (Horsham) (LD)]

In Horsham town, in my constituency, we have a central car park outside a Sainsbury’s, which is operated by a third-party contractor. The number of disputed tickets is out of control. Does my hon. Friend agree that the voluntary code of practice, which was introduced last year, seems to have made absolutely no difference? I can detect no reduction in the difficulties being created.

[Martin Wrigley]

I agree with my hon. Friend.

I have spoken to a former employee of one of these private parking companies who was dismissed for whistleblowing. In my constituency of Newton Abbot, I have received numerous complaints about the behaviour of some private parking companies and the tactics they use, which include breaching data protection rules by hiding data and failing to comply with subject access requests. They have created a culture of “charge first, think second” and their default position is to refuse appeals. They also use equipment that is designed to be awkward or even to fail, such as machines that will not take cash or card payments, and then they deny appeals, arguing that drivers could have paid by app. They “double-clock” people coming in and out of car parks more than once, even if they have paid for tickets. One victim of this practice appealed and won because the company involved could not provide evidence to support the charges that had been made, but it took the company a further six weeks to cancel the charges.

Other tactics include deliberately targeting people who do not respond to their threatening letters, which are often issued with the wrong address or similar, and selecting them for court action. The companies know that these people are the most likely not to turn up, thus obtaining a default judgment, and that the cost of setting aside a county court judgment is greater than paying it off. There is also a constant use of trumped-up bailiff charges, many times the price of a normal parking fine.

In my constituency, Norma, an elderly driver, forgot to display her blue badge. She received a PCN for £100, which she paid but appealed. She was not offered the discount rate applicable under the company’s own code until I intervened.

Residential Estate Management Companies

John Milne Excerpts

Tuesday 22nd April 2025 Westminster Hall

[Gideon Amos]

My hon. Friend is absolutely right. It is time for this shocking behaviour to be rectified and for legislation to be introduced. I will continue to work for the residents of the properties in my constituency that I have mentioned, and to get the legislation that we need.

Those who suffer from poor management can, of course, be leaseholders or freeholders. There are 4.8 million residential leasehold properties in England, which is equivalent to a fifth of the housing stock. That system is a relic of the feudal period. Its abolition has long been sought by Liberals and Liberal Democrats. The abolition of residential leasehold could be one of the most important carried-forward pieces of business from the last Liberal Government of about 100 years ago, which goes to show how long overdue it is.

[John Milne (Horsham) (LD)]

In my constituency of Horsham, we have many similar examples. Would my hon. Friend agree that although we certainly need legislation, the industry could act right now by introducing a voluntary code of practice? The industry does not have to wait for legislation; it should hear the call from across this Chamber.

Planning and Infrastructure Bill

John Milne Excerpts

2nd reading
Monday 24th March 2025 Commons Chamber

[John Milne (Horsham) (LD)]

First, I wholly respect the intention behind the Bill; it is a serious attempt to solve a serious problem. I also recognise that what was happening under the Conservatives did not work, and never could have worked even if we had given it 1,000 years. All it achieved was to fuel house price inflation, which has now created a destructive division into a nation of haves and have-nots. But I judge this new Planning and Infrastructure Bill through the lens of my own constituency—will it work for Horsham? Will it deliver affordable homes in the right places and with the right environmental standards? I think the answer is no.

The main reason is that the Bill is based on the same mistaken premise as the previous system. The problem lies with how housing targets are worked out—not the national target, which gets all the publicity, but local targets. Why are targets so hard to meet? The reason is that the Conservatives invented a catastrophically bad formula for calculating housing need, which is called the standard method. It measures the ratio of local house prices to local wages, and the bigger the gap, the higher the target goes. The idea is that communities just keep building houses until the price comes down. The only problem is that it does not work. It turns out that in Horsham—as in many places—the average price of a new house is higher than the price of the existing stock, so the more we build, the worse the ratio gets and the higher the target goes. That is the exact opposite of what the theory says should happen.

Unfortunately, this new Labour Bill takes the same flawed Tory standard method and pours rocket fuel over it. Targets control planning permissions, but that is not the same thing as actual houses; Horsham already has 13,500 unbuilt permissions, including the emerging local plan. That total could double under Labour’s new targets. Does that mean that we are actually going to build tens of thousands more homes? No, it does not. We could cover every inch of Horsham district in permissions, but it is not the lack of permissions that is holding back the market. Houses do not get built faster, because developers cannot sell them any faster. Some 80% of what we build today is aimed at the top 20% of the market—all of this was described very well in Sir Oliver Letwin’s analysis back in 2017. The housing market does not behave as one market; it is like six parallel markets, and the houses we are building are largely serving the top two.

I am desperate to build more affordable homes in Horsham, but clogging up the system with unbuildable permissions is not the way to do it. The best way to build more homes is to build more consent. I said that I would judge this legislation on whether it would work for Horsham, and the answer is that it will not.

English Devolution and Local Government

John Milne Excerpts

Wednesday 5th February 2025 Commons Chamber

[Angela Rayner]

I thank the hon. Member for raising the important issue of the challenges that Surrey faces. That is why we have put Surrey within the priority programme, but we do need a reorganisation first, because it would be a single council, so we would have a single council mayoral area, which is not what the devolution agenda is about. The reorganisation is about recognising the challenges that Surrey faces and working with local leaders to deliver services to local areas. At a later date, we can then look at whether we are able to take that forward, but we do recognise the unique situation that Surrey is in, which is why we have put it in the priority programme.

[John Milne (Horsham) (LD)]

I refer Members to my entry in the Register of Members’ Financial Interests.

In my constituency, we are lucky enough to have a district council that is very well run and very well funded. For that reason, we have been able to preserve, for example, a theatre that is run and owned by the council, which would surely have been lost if it had been exposed to the bottomless pit of SEN budgets and adult social care. I am concerned that the loss of a two-tier system means that our wonderful institutions will be at risk unless they receive some kind of protection. Can the Secretary of State offer us anything for the future when we become a unitary?

[Angela Rayner]

As I have said, local government reform is about supporting local areas and making sure they can deliver good public services. I recognise that areas have faced significant cuts and that it has been a challenge for them to keep local heritage and local community assets, as I said in a previous answer. That is why we are bringing forward other legislation and support to protect those things as well, but we will continue to engage with local areas to make sure that local government reform delivers better services for the hon. Member’s constituents.

Cross-Boundary Housing Developments

John Milne Excerpts

Thursday 28th November 2024 Commons Chamber

[Mr Bedford]

The hon. Gentleman is absolutely right. I will go on to address some of those points, particularly in relation to the use of infrastructure.

Markfield village sits in the local planning area of Hinckley and Bosworth borough council, but under the current framework, Markfield parish council and Hinckley and Bosworth borough council have very little say or influence over such decisions, as they are made in the adjacent Charnwood borough. It is obvious that the new Markfield residents will use services in Hinckley and Bosworth, Markfield and the surrounding areas, but those areas will see very little benefit, because those benefits will go to other villages. Worst of all, such developments are going ahead without constructive or binding input from the local parish council or the adjacent borough council.

Another example is in Glenfield village, in my constituency, which sits in Blaby district council, adjacent to Leicester city council. Steve Walters, who heads a local action group, has raised the issue that the city council plans to build several hundred homes on the edge of Glenfield village, but because the village does not sit within the city council boundary, it will see all the detriment of that development but have very little input in the decision-making process. Indeed, Steve has campaigned many times against the urban sprawl of the city affecting villages such as Glenfield. He is working constructively with me and local councillors to try to get progress on the issue.

[John Milne (Horsham) (LD)]

In my constituency of Horsham, we are almost entirely surrounded by other areas that, for one reason or another, have constrained housing targets—they have areas of outstanding natural beauty, are in national parks or are already built up. As a result, under the duty to co-operate, Horsham has to take a very unfair proportion of housing to serve the whole area. Does the hon. Gentleman agree that the duty to co-operate system needs to be revised to stop freak results happening in constituencies such as mine?

[Mr Bedford]

I absolutely agree with the hon. Gentleman. He gives an example in his constituency, but I have seen the same in Leicestershire and, from speaking to other hon. Members, I know there are similar examples in other constituencies.

So where are we heading? We have a Government that are steadfast in their plan to concrete over our green and pleasant land, especially in rural constituencies such as mine. In July, the Secretary of State for Housing, Communities and Local Government said that she believed the national planning policy framework

“offers extra stability to local authorities.”

Is that really the case?

The Government’s approach is to alleviate the pressure on housing in UK cities and force additional housing on rural areas, without providing sufficient support to the communities that will impact. That was seen by the Government’s plans to reduce housing targets for cities by an incredible 35% in the NPPF. In the village of Ratby in my constituency, predatory developers such as Lagan Homes are taking advantage of the current situation, forging ahead with proposals to bulldoze over The Burroughs, despite a staggering 900 households in that village writing to the borough council to oppose that ecological vandalism. I am sure Leicester city council was jumping for joy at the news that it would have to build 31% fewer homes by 2030, but that meant rural areas such as mine and my residents’ would have to see additional housing, as it is pushed further and further out.

In truth, the reduction is why the decision to build houses on the edge of Glenfield leaves such a sour taste in the mouths of local residents, particularly in Glenfield and Blaby district. What does it look like in context? The city council has been asked to produce fewer houses, whereas rural areas, such as Blaby and Hinckley and Bosworth, have been asked to dramatically increase their target, by 69% and 59%, respectively. Unfortunately, the planning reforms do not really take into account the cross-boundary implications, so what should we do instead?

The Government should foster a co-operative relationship from the top down. Our local authorities should be encouraged to work alongside one another to prevent situations such as those I have described. That can be done by allowing adjacent borough and district councils to have a say in housing development policies through their various local plans, particularly where that will have an impact on the neighbouring authority. There should also be an ability for residents in adjacent boroughs to view and comment on plans in other local planning authority areas. Furthermore, the increased arbitrary housing targets for each borough council area simply do not take into consideration the impact of the adjacent targets. There is surely a better method for developing sustainable housing county-wide, rather than local authorities parking houses next to their own front lawn.

Finally, and probably most importantly, under the current regime there is no requirement for financial compensation for local authorities that are adversely impacted. No thought is given to that. Section 106 agreements and community infrastructure levy contributions are paid by developers to local authorities to mitigate the impact of specific developments. They are well-intended negotiated agreements that force developers to give something back to the community, whether that be funding for infrastructure, improvements or green spaces. However, they fall short in cross-boundary considerations, as we have seen in the examples I have given from Markfield and Glenfield.

Charnwood borough council has made it explicitly clear that the section 106 moneys for the developments along the boundary of Hinckley and Bosworth would go to its own borough. How can spending all those allocations for a development on the edge of Markfield, to the benefit of Loughborough and Barrow, be in the interest of Markfield residents, who sit in a different borough? That undermines local buy-in to the planning process. Instead, there should be a more practical approach whereby section 106 agreements go to the authority where the services are actually being used. Another anomaly of cross-boundary development is the distribution of council tax precepts, with the new residents in Markfield, for example, paying into Charnwood borough council rather than their own.

I am not a nimby. I called this debate to raise the issue posed by cross-boundary planning applications. I believe there should be a collaborative, holistic approach, as mentioned by other hon. Members. I encourage the Government to listen to the debate and consider bringing about the changes and proposals that I have outlined.