Planning reform: the local government view

Part of Ms Rayner’s announcement was a consultation on reforms to the Right to Buy scheme. While the Right to Buy can and has delivered homeownership for many, the current format no longer works. This consultation will be warmly received by councils whose stock has diminished significantly under the scheme.

We are pleased that the government will implement some of the LGA’s longstanding asks around the Right to Buy immediately for a two-year period. Increasing the maximum permitted contribution from Right to Buy receipts to replacement affordable housing from 50% to 100%, using those receipts along with Section 106 contributions and lifting the cap on the percentage of replacements delivered as acquisitions each year (currently 50%) are all positive steps towards addressing the issues with the scheme.

The rising discounts and restrictions the government placed on councils’ use of Right to Buy receipts meant they have been selling property at a discounted rate and the money raised from the sale is usually not sufficient to cover the building costs of replacing the property. 

“Targets can only be a starting point, and there are concerns among some councils about the results of the proposed new standard methodology for determining housebuilding targets”

Last year alone, there was a net loss of 7,449 social homes due to Right to Buy sales. Councils need to be allowed to set discount levels at which homes can be purchased, as well as retain 100% of their receipts permanently if the Right to Buy scheme is to be manageable.

However, reforming the Right to Buy is only part of the solution. The government should enable the roll-out of five-year local housing deals by 2025 to all areas of the country that want them – combining funding from multiple national housing programmes into a single pot.

New research from the LGA found this would lead to 200,000 additional social homes being built over 30 years, resulting in a 21% increase in social housebuilding.

The report also suggests that by moving towards one single long-term fund, there will be significant improvement in the delivery of housing by prioritising a strategic approach over short-term thinking. It will also help to avoid the boom-and-bust cycles of housebuilding.

The findings suggest a programme of consecutive, minimum five-year housing regimes will deliver estimated net socio-economic benefits worth £31bn in today’s prices over 30 years, including by lowering housing benefit payments and decreased expenditure on homelessness services if more social housing is built.

While much of the focus of planning reforms seems to be on ways to speed up planning permission, the reality is that planning is not a barrier to housebuilding. Councils approve nine in 10 planning applications, and there are currently over a million homes allocated in local plans across England which are waiting to be taken up by developers. While these sites do not yet have planning permission, councils have formally identified them as suitable for housing. 

However, planning fees present a problem for councils, as they currently do not cover the true cost of processing applications: 305 out of 343 local authority planning departments operate with a deficit which totalled £245.4m in 2020-21. Councils should be able to set planning fees locally to meet the full costs of processing applications.

“Councils need flexibility to take account of local circumstances. Councils and communities are best placed to decide how to build the right homes in the right places in their local areas, with the right infrastructure”

To deliver more housing, councils need the proper levers to genuinely support a faster build-out of schemes. This includes urgently introducing a ‘stalled sites’ council tax premium, as well as a streamlined compulsory purchase process to acquire stalled sites or sites where developers do not build out to agreed rates. Councils should also be given powers to direct diversification of housing products on sites, to speed up overall build-out.

This new government has an opportunity to reset the relationship between national and local government, where national government recognises that while it can provide useful guidance on housebuilding and planning, it is local councils and communities that know their areas best and are therefore the ones best placed to deliver on the housing needs of their communities.

We are clear that any changes to national planning policy should be suitably flexible to allow authorities to make judgement decisions on managing competing demands for uses in their local areas.

Targets can only be a starting point, and there are concerns among some councils about the results of the proposed new standard methodology for determining housebuilding targets. Councils need flexibility to take account of local circumstances. Councils and communities are best placed to decide how to build the right homes in the right places in their local areas, with the right infrastructure.

While we will look carefully at the changes proposed to planning policy and housing targets, local government stands ready to work with national government on its detailed delivery plans to ensure practical solutions are found for these longstanding problems. 

Linda Taylor, housing spokesperson, Local Government Association