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27/07/2020

MPs propose that planning fees should be set locally 

Words: Laura Edgar
Social housing / Shutterstock_199093037

The Housing, Communities and Local Government (HCLG) Committee has recommended that the ability to set planning fees should be devolved to local authorities, with a national minimum rate. 

Building More Social Housing states that it is “imperative” that local planning authorities have the right resources to deliver the social housing needed in England and so they can guarantee that private developers deliver “sufficient” social housing on new developments. 

The report finds that 90,000 social homes will be needed every year to meet demand. Delivering this number would also help the government to meet its target of building 300,000 homes a year by the mid-2020s. 

But current social building levels are in the low thousands, the committee explains. A “significant” increase in funding support for local authorities and housing providers – as well as broader reforms to make land more affordable and allowing local authorities to use all right-to-buy receipts – would aid “the necessary uplift” to meet demand.

HCLG Committee outlines the statistics

  • 83,700 households are in temporary accommodation, 82 per cent more than in 2010.
  • 165 per cent – the percentage by which the number of people sleeping rough has increased in the same period. 
  • Since 1981, over a million homes have been lost from social housing stock and in 2019 only 6,827 new homes were built. 

According to the committee, local authorities and social housing providers are at the limit of what can be achieved using current funding mechanisms, with the impact of Covid-19 – socially and financially – likely to increase the burden on “a social housing system that is already under significant strain”. 

Although the HCLG Committee welcomes the removal of the borrowing cap, it thinks it “will not have a sufficient impact”. Instead, £10 billion in extra grant funding is required to deliver the homes needed.

To reduce spending from the public purse, the government should reform land value capture, assemble and use public land for social housing, and redistribute expenditure from existing budgets.

The report says investment in social housing provides a social benefit, an economic boost that pays for itself over time, and an increase in housebuilding would provide a jobs boost during the current economic uncertainty.

Chair of the committee Clive Betts commented: “The collapse of social housing building since the 1980s has had terrible consequences on our ability to provide adequate housing for those who need it. The last decade has seen a surge in families living in temporary accommodation and people rough sleeping, while at the same time we have come to rely on the private rental sector to shore up the creaking social housing capacity.”

He said the committee believes that building 90,000 social homes a year is achievable.

“We believe this target can be reached in five years, but only if the government gives providers sufficient financial backing and reforms the wider landscape that social housing providers operate in. They must ensure that the money is there to build, that land is available to build on and allow flexibility to buy surplus housing where it is not needed in the private sector. The system must ensure that any housing sold via right to buy is replaced like-for-like, and that local authorities are allowed to retain all the receipts produced to enable them to achieve this.

“This must be a long-term commitment to creating a social housing system that meets long-term demand. It will be challenging but it is achievable.”

The recommendations include:

  • The government should link local incomes to a definition of affordability, rather than using ‘affordable’ as a synonym for below market rent or market value.
  • Reform the Land Compensation Act 1961 – something the committee said is “well overdue”. It should be amended so that local authorities and development corporations have the power to compulsorily purchase land at a fairer price. The present right of landowners to receive ‘hope value’ reduces revenues and opportunities for social housing. Compensation paid by landowners should be determined by an independent expert panel, which we expect will deliver a fairer deal than the current model.
  • The government’s public land disposal strategy needs a wholesale redesign, not more of the same. The government needs to think less about disposal, and more about assembly. Homes England should take a central role in coordinating public land to be used for social housing, by being tasked with identifying suitable land, including a joined-up approach with land owned by local authorities, as well as purchasing private land suitable for social housing. With the committee’s suggested reforms to the Land Compensation Act 1961, this land would be easier to purchase and more affordable.
  • The government should publish annual net addition targets for the following tenures: social rent, affordable rent, intermediate rent and affordable homeownership. This will improve transparency and accountability of the government’s record on affordable housing. It will also make clear the contribution affordable housing will make to the government’s 300,000 new homes per year target. This is “crucial”, the committee explains, as housebuilding in England has only ever surpassed 300,000 in a year when social housing has made a significant contribution. 
  • First Homes should be added as an affordable housing scheme under annex 2 of the National Planning Policy Framework (NPPF), so that local planning authorities can set out policies for which affordable tenures, including First Homes, best meet the needs of their local communities. The current proposals have the potential to negatively impact on social housing delivery. Furthermore, significant regional variations in the value of planning obligations, which are especially low in the north of England, would mean on some development sites, First Homes might squeeze out all other tenures or by itself make the development unviable. 
  • Local authorities should receive 100 per cent of right to buy receipts. The time limit for using these receipts to fund a replacement should be extended to five years, rather than three. Councils should also be allowed to combine receipts with other pots, like grant funding, to maximise flexibility. Receipts must be used to fund like-for-like tenure replacements: a sold social rent home should be replaced with a new social rent home. Without these changes, right to buy will make achieving the development of the desired 90,000 properties per annum unachievable.
  • In line with the five-year period that covers discount repayment, the government should prevent right to buy homes being privately let within five years of purchase. This will require legislating to implement a covenant against letting for a five-year period. This is not without precedent: help to buy properties include a covenant that prevents private renting. The government’s justification is that help to buy is designed to assist you to move on or up the housing ladder, words that could apply just as aptly to right to buy.

Reaction:

David Renard, housing spokesman for the Local Government Association (LGA), said: “We are pleased the committee backs our call for tens of thousands of social homes to be built every year, and for this to be supported by an increase in funding for councils, and reform to right to buy.

“We also very much support the committee in asking that the government works with the LGA to ensure right to buy does not lead to a reduction in social housing.

“Housing must be a central part of the national recovery from coronavirus. Now is the time for a genuine renaissance in council housebuilding that reduces homelessness, gets rough sleepers off the streets for good, supports people’s wellbeing and is climate-friendly.”

Crispin Truman, chief executive of countryside charity CPRE, said: “It has never been more important to deliver better-quality and genuinely affordable homes for everyone and that needs to include rural communities. Not only are decent homes vital for our health and wellbeing, but affordable and socially rented homes make communities more resilient. Our recent analysis revealed a shocking 96 per cent of rural areas are unaffordable for care workers on private rents. Investing in genuinely affordable homes in rural areas will ensure more key workers can live in the areas they serve and services in those areas can recruit the key workers they need.  

“But the dismal building rates of good-quality social housing in rural areas is a scandal that has been ignored by the government for too long. We welcome the committee’s report and urge the government to make social houses for key workers a key part of the recovery from the coronavirus pandemic by ramping up building rates of well-designed, truly affordable and socially rented housing in rural areas as part of the levelling-up agenda. Only then will a fair recovery to the coronavirus pandemic in the countryside be in our sights.”


Building More Social Housing can be found on the UK Parliament website (pdf).

Image credit | Shutterstock

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