New NPPF and its implications for north Essex

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Government’s new National Planning Policy Framework, NPPF 2,[1] is now live, launched on 24 July.    Plans submitted on or after 24 January will be examined using this new NPPF.

This will lead to an odd situation for north Essex.  It is likely that our Section 1 examination, still technically under way, will drag on. Therefore north Essex plans will be examined against old NPPF at the same time as local plans submitted by councils elsewhere after 24 January will be examined against NPPF 2.   To confuse matters, though, weight will be given to new NPPF.  In addition, as the inspector noted in his letter, the greater the delay in modifying the plan, the greater the risk that the evidence base might become out of date or overtaken by changes in national policy.

There is some good stuff and some bad stuff in the new NPPF.

For north Essex, the good stuff is that there will be increased emphasis on viability, location, infrastructure, density and delivery rates of large settlements.    The bad stuff is the new housing formula, which is no more than a contrived means of spitting out a target figure of 300,000 homes.

Large scale developments

Since draft NPPF in March, paragraph 72, on larger scale development, has been beefed up and given more substance.   Our barrister, Martin Edwards of Cornerstone Barristers[2], notes that this has the stamp of North Essex Garden Communities examination.   Perhaps government is taking note:

  • Now any large development must be ‘supported by the necessary infrastructure’, ‘well located and designed’;
  • As before ‘working with the support of local communities’ is necessary;
  • If large scale development considered appropriate, ‘suitable locations’ should be identified;
  • The opportunities presented by existing or planned investment in infrastructure must be taken into account, plus the area’s economic potential;
  • The authorities must ensure that the size and location will support a sustainable community, with sufficient access to services and employment opportunities within the development itself;
  • A realistic assessment of delivery rates must be made, acknowledging the slow delivery of long term projects;
  • A reference to garden city principles has been reinstated. This was a response to lobbying by the Town & Country Planning Association.   This is tokenism.  The principles as they stand do not go far enough, failing to deal with the external factors now covered above in policy.

The bar is therefore set sensibly higher than previously.

Housing formula

Housing need calculation is now standardised. The much trailed formula will be implemented.

It seems that a determination to create a formula which churns out 300,000 homes is the driving force here.  Interestingly, government is worried that a new method of calculating the base projections which is being applied by the ONS (who now have responsibility for the job), will spit out a lower number.   As a result government has promised another review of the formula in September.

Demographic projections are the starting point and then a formula based around affordability ratios is applied.   The resulting numbers are higher for north Essex than previously. However, unless our councils choose option 3 of the inspector’s options, we are protected from the increase because our plans have already been submitted.

Viability

Government is seeking ways to ‘capture land value uplift’.Let’s say agricultural land is worth £10,000 an acre.  A land-owner could sell this for development at £1m.   That is what government wants to capture.

In plan-making, authorities will have to be clear what Community Infrastructure Levy and Section 106 contributions will be expected, including for affordable housing and infrastructure.

Under viability testing, existing use value (EUV) must now be the basis for setting a benchmark land value.  A benchmark land value will include a premium to land owners.   The premium will have to be tested against emerging policies.

It will be interesting to see how this plays out in reality.   Hope value must be disregarded but:

  • “The premium should provide a reasonable incentive for a land owner to bring forward land for development”;
  • “Plan makers should establish a reasonable premium to the landowner…”;
  • An ‘assumption of 15-20% gross development value (GDV) may be considered a suitable return to developers”.

Therefore, it will be interesting to see what sort of benchmark values emerge in reality.

A developer will no longer be able to use the argument that the price he paid for land makes the delivery of affordable homes unviable.   An inspector will base his calculations on EUV, not price paid:  “The price paid for land is not a relevant justification for failing to accord with relevant policies in the plan.” In decision-making (planning committees), planning applications should comply with the policies setting out contributions expected from development.

A few other key points about NPPF 2:

Now, instead of needing to plan for the most appropriate strategy, authorities must only create an appropriate strategy.

NPPF 2 allows much less wiggle room for authorities who wish to try to build fewer homes than their OAN.   They will have to demonstrate environmental constraints, with designations like AONB being required to limit growth.

NPPF 2 gives greater encouragement to planning for:

  • Small & medium-sized sites
  • Brownfield use, although the CPRE thinks not strongly enough.
  • Higher densities, particularly in areas where land availability is restricted and around public transport.
  • Location of developments for sustainable travel
  • Protection of town centres (sequential test)
  • Rural exception sites. It is acknowledged that some housing in villages helps to support services.   Fortunately a paragraph that was in the draft NPPF and would have allowed virtually unchecked development adjacent to villages has been removed and caveats applied to the accompanying paragraph which remains[3].
  • Neighbourhood Plans. They do afford protection against planning applications but must have been in force for two years and an authority must have a three year supply.

There are 51 accompanying planning practice guidance documents[4], which include guidance on how to calculate housing need, viability and developer contributions.  Policy is split broadly into two sections:  plan-making and decision-taking.    Plan-making is the Local Plan stuff, covered above.   Decision-taking is for planning committees – note on this to follow.

 

Footnotes:

[1] https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/6077/2116950.pdf

[2] https://cornerstonebarristers.com/barrister/martin-edwards/

[3] Paragraph 71 now caveated with a 5% maximum increase to size of settlement.  In draft was ‘proportionate’

[4] https://www.gov.uk/government/policies/planning-system?keywords=&detailed_format%5B%5D=detailed-guide&organisations%5B%5D=ministry-of-housing-communities-and-local-government&public_timestamp%5Bfrom%5D=&public_timestamp%5Bto%5D=