Local Housing Need

Lord Shipley Excerpts

Thursday 14th September 2017 Lords Chamber

[Lord Kennedy of Southwark (Lab)]

My Lords, I declare that I am a local councillor in the London Borough of Lewisham and a vice-president of the Local Government Association. I thank the noble Lord for repeating the Statement made by his right honourable friend in the other place.

I am not in the habit of jumping up and banging my fist on the Dispatch Box, but I am deeply disappointed at the actions of the Government. We have had seven years of failure, the shambles of the Housing and Planning Act—which must be in contention for one of the worst pieces of legislation ever put on the statute book by a Government; it is an absolutely dreadful piece of legislation—and the housing White Paper. Again, I remember all the hype we had—“It’s coming tomorrow!”—and then, of course, it delivered very little.

We have a housing crisis; I think everybody knows that, and they are absolutely right. Everyone knows somebody who cannot get the home they need or aspire to. Home ownership has now hit a 30-year low, affordable housebuilding has dropped to a 24-year low, and last year just 1,000 new homes for social rent were started—directly as a result of policy decisions taken by the Conservative Party since 2010. That is seven years of failure on all fronts. The country expects much more from the Government. Even the Prime Minister knows that a big reason why she lost her majority at the general election was because of their policies on housing.

What has been announced today will be useful to help underpin the National Planning Policy Framework, albeit five years after it was adopted by the Government. New planning permissions are only a small part of the answer to the housing crisis; 300,000 planning permissions were granted last year, yet affordable housebuilding is at a 24-year low. I often tell the Minister and the House about what goes on in Lewisham. Many times we have granted planning permissions but nothing is built there, so this is not on its own the answer to the problem.

A standard method to assess housing need is sensible. There was one, as well as the National Housing and Planning Advice Unit, but both were abolished in 2010. Can the Minister tell the House when these new procedures will apply from? Will it be from 2018? The lack of a standard method does cause delay in producing local plans—part of the reason it now takes longer to approve them than it did in 2010. How much quicker does the Minister estimate these changes will make the plan-making process?

The new national formula fixes housing numbers for local areas. The Minister tells us that this is not a “hard and fast target”, yet local plans must meet the new numbers, and in more than half the country the numbers will go up by an average of a third. Is this tough new action from the Government or just warm words? Will the Minister be very clear about what he means by all this? What action will follow when an authority fails to meet these new numbers? How many authorities does he estimate will meet the new housing delivery test set by his department?

[Lord Shipley (LD)]

My Lords, I remind the House that I am a vice-president of the Local Government Association.

It is good that councils will be undertaking a more accurate assessment of housing needs in their area and working across boundaries with neighbouring authorities—perhaps better than occurs in some places. The further support through the capacity fund is welcome, although I suspect that it may prove not to be enough, but no doubt the Government will keep that under review.

The Statement goes so far but when it says that,

“we need a proper understanding of exactly how many homes are needed and where”,

there is something missing. We need to know also what tenure they ought to be. Are they for sale, and at what kind of price range? Are they for rent? Are they to be affordable or are they to be homes for social rent? A major failing in the Statement is that it does not address the issue of finance. I will come back to that in a moment.

I am interested, if the Minister happens to know, in how much the expensive consultants using their own methodologies have actually wasted. Presumably there is a figure in the department which would indicate to us how much money has been spent by consultants who are not using common methodologies. It should be a matter of concern if public money is being spent for purposes that may not be giving us a clear result. But the Statement ends by saying:

“The result is an opaque mishmash of different figures that are consistent only in their complexity”.


We need to know more about that, because the figures that are being used for planning purposes need to be reliable.

Perhaps the Minister will explain why the four times average earning planning figure is being used rather than some other number. Presumably it has been carefully worked out but another number could be more appropriate. The Government may find that they need to keep under constant review whether the three stages of assessment are actually working. They may do, but the consultation will reveal whether or not they actually do.

Is it necessary for planning authorities to have 12 months,

“to set out exactly how they are working with counterparts across their housing market area”?

In some cases they already are; in other cases where they are not, they should be doing it a great deal more quickly than in 12 months. If there was to be a faster figure, I would want to support that.

The Government have come out with the figure of 266,000 homes per year as the starting point for local plans across England. I just draw the Minister’s attention to the report by the Economic Affairs Committee of your Lordships’ House, which said that it should be 300,000 a year—after a great deal of work. Perhaps the Minister could explain whether 300,000 is the Government’s target. Presumably, to hit 1.5 million over five years, as the Statement also indicates will occur by 2022, it is closer to 300,000 a year. Unless the financial arrangements are sorted out to enable local authorities and others to build, particularly for social rent, a problem is going to arise because I do not think you can build 1.5 million houses to sell. Whether it is for a form of shared ownership or whatever, in the end we simply need more social homes for rent.

The Statement makes it clear that:

“These measures alone will not fix our broken housing market”.


That is absolutely true. But the Statement does not go on to tell us why that is. But the reason is because the financial arrangements are not in place to do it. Earlier today in Questions, I cited the National Audit Office report on homelessness, which cost local authorities £1.1 billion in 2015-16. That would have provided 30,000 new affordable homes—not necessarily homes for social rent. It is clear to me that the broken housing market will not be fixed only through changes to the planning system. The root of the problem is that the cost of renting is too high and not enough social housing is being built. The Government are at serious risk of not delivering the 1 million new homes by 2020 and the further 500,000 by 2022.

Finally, the Minister said a great deal about the regional spatial strategy. There were problems with the regional spatial strategy, but it was not quite as bad as the Statement made out. This new approach may be better, but it is still slightly top-down. I draw the Minister’s attention to a report published recently by Homes for the North, which looks at a regional approach to the provision of housing and identifying housing need. What is particularly interesting in its statement that 500,000 homes are needed over a 10-year period across the north of England is that the work is being done in conjunction with Transport for the North; in other words, there is an integrated planning system, not officially in place but unofficially in place, which I think is going to help identify need. If the Minister has not read the report, Future Housing Requirements for the North, I hope he will endeavour to do so.

[Lord Bourne of Aberystwyth]

My Lords, I thank the noble Lords, Lord Kennedy and Lord Shipley, for their contributions. The noble Lord, Lord Kennedy, was keen to tell us that he was not going to bang on the Dispatch Box but then went for a metaphorical bang on the Dispatch Box before he got out of his first sentence, I think, on the Housing and Planning Act 2016, which is a routine approach of his, I know. I take issue with him on the housing White Paper. This was widely welcomed, including by many people in the Labour Party, certainly in the other place, as being radical and forward-looking. I am not sure I would go along with his uncharacteristically churlish approach. I also remind him that 333,000 new homes have been built since 2010. On the local authority housing situation, as a Government or as part of a Government in the past five years, we have built more than double the amount of local authority housing that Labour did in 13 years. We all have challenges to face but these are irrefutable facts.

I remind noble Lords that this is a consultation. This is not the definitive word. We are opening this for consultation and the consultation is open until 9 November. I do not want to say, “This is definitely what we are going to do”. We are consulting on many of the issues that noble Lords have understandably raised. The noble Lord, Lord Kennedy, asked when this would take effect. I appreciate that there is a lot to take in in the documents but we have indicated that 1 April 2018 is the date we are looking at, or later if the National Planning Policy Framework is altered. It is whichever of those two dates is the later but of course we will want to take account of the consultation, which is not ending until nearly halfway through November. I am sure noble Lords would expect us to do just that.

The noble Lord, Lord Kennedy, also asked about what happens if local authorities do not agree with that approach. Let us presume that it goes forward after consultation in a very similar form—though, as I say, the consultation is open. If the local authority does not like a particular figure, or wants to revise it because of green belt or an area of outstanding natural beauty in its area, the policy will then go, in the normal way, as in every case, to examination by the planning inspector, who could disagree with it. That decision will be the definitive decision unless there is judicial review, if the planning inspector misdirects himself in law. There is a process there for independently ensuring that the agreed figure is carried forward.

I thank the noble Lord, Lord Shipley, for his comments on common ground and working across boundaries in the housing market areas. He questioned why the period is 12 months. I anticipate that some local authorities will say that the objective is challenging. Although we are always tempted to go more quickly, some local authorities may have not one, but various, boundaries to cross, perhaps working with other authorities to the east, west, south, and so on. It may be a taller order than is immediately apparent.

The noble Lord, Lord Shipley, also raised the issue of consultancy costs. Our workings on that show that, on average, each local authority is spending around £50,000 on consultancies. We are not suggesting that that is wrong—certainly it is intra vires within the present system—but we think that the system we are recommending will be simpler and not need those consultancies, because it will essentially be a mathematical formula. I am not suggesting that that money has been illegally spent, but it could be saved. We are proposing a uniform approach. I do not think it is top down in the way that was suggested, in the sense that we will still be giving local areas key decisions on whether to disagree with the approach, and so on. Nevertheless, it will provide a uniformity of approach. Four times average earnings is a formula we have adopted, but the consultants at the consultation may throw up other suggestions.

The noble Lord referred to our existing targets and suggested they are challenging. I accept that they are: 1 million new homes by 2020 and 1.5 million, so another half a million, between 2020 and 2022. Those will not all be homes to purchase—I correct the noble Lord on that point—some of them certainly will be for rent. The White Paper refers to the need to get the social housing sector moving as well. We are of the view that this needs a mixed approach. The figure of 266,000 may well be exceeded. We may find—we hope—that some local authorities will want to go further. They will have to justify that again when the plan goes for examination, but they could well go further, so this figure would therefore be a baseline.

The noble Lord, Lord Shipley, also referred to other issues that should be integrated. I fully accept that, and we expect to work alongside the national infrastructure framework and the £2.3 billion that we have allotted to help achieve that. I think I have covered the points that the noble Lords raised but, as always, I will write to them after the Statement concludes to pick up any points I have missed and perhaps to answer any detailed questions.