News | Published February 08 2019

Leith Planning call for reform as government housing strategy criticised by NAO

The National Audit Office has released a report entitled Planning for new homes, which criticises the method local councils use to calculate the amount of homes they need to construct. Labelling the current system as “flawed”, the NAO estimate these outdated methodologies will lead to an annual shortfall of 35,000 between what is required and what is actually constructed. Chris Plenderleith, of Leith Planning, responds to these statistics by calling for reform. 

Theresa May has pledged to build 300,000 houses per year by the mid-2020s to try and combat the growing housing crisis and the difficulties many face, especially among younger generations, when trying to get onto the housing ladder.

As reported in The Telegraph, these criticisms centre on the use of outdated information to determine housing need, leading to inaccurate predictions. 

According to the NAO report, half of local authorities will fail to meet their housing targets in the coming year, exacerbating the existing shortage of homes. 

Describing the government’s planning system as “underperforming”, the NAO estimate that if the system is not overhauled or reformed, councils will only construct 265,000 homes per year between them, well below May’s stated targets and what is necessary to alleviate the existing shortages.

These shortages were demonstrated by a report conducted by Civitas which documented the increased number of young people who are still living with their parents compared to previous generations. 

They report that 3.4 million young adults currently live with their parents, compared to 2.4 million 20 years ago.

The NAO estimates that between 2005/06 and 2017/18, the average number of homes built per year was 177,000, with this number never exceeding 224,000. Therefore, in order to reach the current target of 300,000, the department will need to see a 69 per cent increase in the number of constructed homes. 

In order to achieve this, they recommend that the housing department regularly assesses the gap between their stated targets and what has actually been planned.

Beyond these issues with quantity, the NAO also highlighted the number of councils without a planning strategy, which they estimate to be 50 per cent. 

Local authorities are legally required to have an up-to-date plan for building new homes and if they cannot prove they have a supply of land for housing that will last for the next five years, developers have greater freedoms to choose locations. 

The NAO argue that this lack of planning can open the door for riskier developments and ones ill-suited to the needs of the local area.

These issues are not uniform nationally however, and the report also stated that government plans focus too heavily on London and the South East, to the detriment of northern areas.

The head of the NAO, Amyas Morse, stated that: “For many years, the supply of new homes has failed to meet demand. From the flawed method for assessing the number of homes required, to the failure to ensure developers contribute fairly for infrastructure, it is clear the planning system is not working well. The government needs to take this much more seriously and ensure its new planning policies bring about the change that is needed.”

Responding to this, Kit Malthouse, the housing minister, said: “I recognise the challenges identified by the NAO, and the simple truth is over the last three decades, governments of all stripes have built too few homes of all types.

We are determined to build the homes this country needs... we are conducting independent reviews on build out rates and planning inquiries."

Chris Prenderleith, Chief Executive of Leith Planning, told The Parliamentary Review about the need to focus on both quantity and the breadth of the housing constructed. 

He stated that: "There are clearly claims and counter-claims as to who is to blame for the acknowledged undersupply of new homes, and the blame culture often clouds the debate.

"It is an unfortunate result of the current methodology for calculating housing need that many areas which see a large increase in their housing need requirements are those with acknowledged constraints. 

"Additionally, a number of authorities which see a large reduction in their housing need figures are in areas without many constraints and so would have the capacity to deliver more housing.

"However, the debate is not just about under provision, albeit we must build more homes. It is also about the type of housing that is built. It is about access to financing and about mortgage lending practices. It is about affordability.

"There is a collective responsibility to boost home-building so that all generations can access good quality housing. The planning system needs to be fit for purpose and that includes correctly identifying housing requirements. 

"It must facilitate the development of innovative solutions to existing and future challenges. It must facilitate the reincarnation of tried and tested solutions, which include new towns and villages. 

" However, it must also promote collaboration between local authorities and Housing Associations providing an attractive alternative to private renting. It must involve special need housing not just affordable housing. It must recognize the ramifications of an ageing population and respond accordingly.

"Delivering an adequate supply of good quality housing has proven elusive, much like the search for the Holy Grail, albeit it is too important to the welfare of the nation to give up the search.”

Authored by

George Salmon
Political Editor
February 08 2019

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