The current standard method is fatally flawed - yet not as flawed as the way it has been introduced, says The Strategic Land Group’s Paul Smith
A key part of the government’s efforts to deliver 300,000 homes a year was the introduction of a standard method for calculating local plan housing targets. When it was proposed in September 2017, the intention was to speed up the plan process and provide certainty on housing targets. Replacing the plethora of approaches that were being used across the country with a transparent formula producing an exact answer would, the government believed, “take years off the plan-making process.”
Yet the wheels quickly began to fall off.
The proposed formula produced lower housing targets across the North than those which councils had been working towards - a number of local authorities ceased work on their emerging local plans (while some even proposed reviewing existing ones) so that they could take advantage of the lower housing targets.
It was a bad start - and things got worse.
When the new National Planning Policy Framework (NPPF) was published in July 2018, it came with a health warning. A new set of household projections were shortly set to be released, and they were widely expected to show a significant reduction compared to previous projections. The government anticipated that problem. On the same day that the new NPPF came into effect – including the standard method - the government confirmed its intention to review the formula as soon as those new household projections were published.
More local authorities announced pauses in their local plan processes to wait for those new projections – including the Greater Manchester Spatial Framework, the flagship of the government’s devolution agenda.
Sure enough, when the household projections were published, they were dramatically lower than the previous iteration. When fed through the standard method, the implication was that we were already building more homes than we need. At the same time, the Office for National Statistics – which produced the projections – clarified “Household projections are not a measure of how many houses would need to be built to meet housing demand; they show what would happen if past trends in actual household formation continue”. The past trend, of course, has been to under-deliver homes, constraining the rate at which new households can form.
Last month the government started a new consultation on how the standard method should be changed.
The proposals, in effect, kick the can down the road.
For the time being, an older set of household projections will be used for standard method purposes. The government has also confirmed that they will introduce a new standard method before the next set of household projections are published in two years’ time.
The result? More delays to local plans.
With the consultation little more than a week old, a number of councils have announced that they intend to halt – or not re-start – their local plan processes. The joint local plan between Stoke-on-Trent and Newcastle-under-Lyme – intended to deliver 28,000 new homes – is expected to be delayed by as much as a year.
This is the exact opposite outcome to the one the government intended.
The process falls at the intersection of two of the planning systems worst traits: endless tinkering and the impossible pursuit of perfection.
Local plans take a long time to produce. In theory, they should take about two years - the reality is it is often much longer. Often, those delays in plan production are caused by councils endlessly reviewing draft plans to take account of changes in circumstances since the last draft was produced. The intention of those reviews is to produce a “perfect” local plan. Yet local plans have to exist in the real world with all its imperfections and irrational actors. A perfect local plan can never exist – circumstances change too quickly. Yet the pursuit of this mythical state is one of the reasons only half of councils have an up-to-date plan.
Endless tinkering by government compounds the problem. Each time there is a change, councils stop to consider the implications and often adapt their draft plans to suit. The standard method is a huge change with potential implications on the development strategy of almost every council in the country. It should be no surprise that they have stopped to consider it - especially when across large parts of the North it provides political cover to reduce housing targets.
The standard method itself is a political construct, designed to push councils to pursue housing targets that will meet the government’s aim of 300,000 homes a year nationally. While that might be a sensible approach in theory, it creates a problem - whatever the inputs, the government wants the answer to be 300,000. So surely the standard method should provide a transparent, impartial mechanism for distributing that figure between local authorities rather than to try to construct a formula that always produces that answer?
The inescapable conclusion is that the current standard method is fatally flawed - yet not as flawed as the way it has been introduced.