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Government’s housing algorithm won’t level up England, warns LGA

Words: Laura Edgar
Housing analysed / iStock-626187690

The government’s proposed new housing algorithm will lead to more homes being built in London and the South East and fewer in the North, according to the Local Government Association (LGA). 

As part of reforms set out by the government to the planning system in Planning for the Future, a second consultation was published at the same time. 

Changes to the Current Planning System suggests the introduction of a “new element” to the standard calculation for assessing housing need in an area – a consideration of the existing stock level.

This, the paper calculates, would lead to a 25 per cent or more increase in the housing requirement for 141 local authorities in England.

The representative body for councils in England and Wales says the new formula has introduced “a stark variation” in where new homes are required to be built without regard to the wider levelling-up agenda.

By comparing the two methodologies, the LGA explains that it found that the new government formula would see the highest percentage increase in new homes growth in the Midlands and the South. Northern regions will see lower growth rates.

Also, the new methodology would “disproportionately impact on rural rather than urban areas”. Some rural areas would see a requirement for a 59 per cent increase in homes under the proposed algorithm compared with the current algorithm. Major urban areas would see just a 20 per cent increase.

The analysis compares the number of homes built in recent years with the numbers calculated using the proposed algorithm. It finds:

  • London would be expected to see a 161 per cent increase in housing. A 57 per cent increase in new homes would be expected in the South East and 39 per cent in the South West.
  • Brighton and Hove would have to deliver a 287 per cent increase in housing, Dover would have to increase new homes by 294 per cent and Tunbridge Wells would have to increase by 184 per cent.
  • Proposed housing targets for the North East are 28 per cent lower than existing delivery – 8 per cent lower in the North West and 6 per cent lower in Yorkshire and Humberside.
  • 66 per cent fewer homes would be built in Newcastle, 59 per cent in Liverpool, 20 per cent in Sheffield and 16 per cent in Leeds.

The LGA has repeatedly said councils are committed to delivering new homes that have the right infrastructure around them for the communities that need them, and that they want to work with the government to make sure that a locally led planning system “provides certainty for communities, encourages brownfield development, delivers better infrastructure and increases local involvement”.

The LGA contends that as nine in 10 planning applications are approved by councils, and more than a million homes have been given planning permission in the last decade but have not yet been built, “it is the housing delivery system that is fundamentally broken, not the planning system”.

David Renard, LGA housing spokesperson, said it is positive that ministers have indicated that they are willing to work with local government to get the algorithm right and discuss their concerns.

“Under these plans, some parts of the country will have to ramp up housebuilding with existing targets doubled. Others, mainly cities in the North, will be told they need to build less, which risks reducing the number of homes they had earmarked for development and bulldozing their current housebuilding plans.

“This seriously jeopardises any ambition to level up the country. Building new good-quality and affordable housing is vital to regenerating our towns and cities, improving our health and wellbeing, creating jobs and enabling local economies to thrive and bounce back following the coronavirus pandemic.

“Algorithms and formulas can never be a substitute for local knowledge and decision-making by councils and communities who know their areas best. When decisions about housing need and developments are made locally, wider issues can be considered, such as ensuring they come with necessary infrastructure and affordable homes.

“If we are to truly fix our chronic housing shortage, the spending review needs to ensure councils have the tools, powers and flexibilities to plan for and deliver the quality homes and places our communities need."

The LGA is also calling on the government to use the spending review to allow councils to retain 100 per cent of right-to-buy receipts, as well as to be given the flexibility to set discounts locally so they can invest in new and existing stock.

Tom Beattie, vice-chair of the District Councils’ Network, commented: “The government’s planning reforms are proposing a national housebuilding fiasco based on a muddy formula cooked up in Whitehall which rides roughshod over local housing need.”

Responding to the LGA research, Beattie insisted that communities must have the powers to shape the future of their local areas. Housing, he continued, should be supported by “proper evidence, not arbitrary spreadsheets”.

“This is why planning, as with other important district council services, must be responsive to local communities. It is critical their voice isn’t marginalised through reforms to planning or in moves to reduce local influence through creating huge new mega councils.”

All of The Planner's coverage of Planning for the Future can be found here on the website.

Image credit | iStock