London and the Wider South East: The Housing Need Black Hole

The failure to plan properly between London and authorities across the wider South East[1] is a long-standing flaw in the system which, without solving, will prevent the Government from achieving its ambition of delivering 300,000 homes a year. Reaching a solution has proved technically and politically elusive. Will the Government’s proposed planning reforms as set out in the Planning White Paper provide a solution?

The Scale of the Problem

Representing a Consortium of developers and land promoters[2], Barton Willmore participated in the London Plan examination in early 2019[3]. The outcome of the examination was that the new London Plan will result in an unmet housing need of 14,000 homes a year. This figure assumes that the (reduced) housing target of 52,000 dpa will be achieved, but to do so will require a significant increase compared to the recent past rates of delivery within London. London’s unmet housing need could therefore be closer to 33,000 homes a year – 11% of the national target.

An increase in delivery – towards 52,000 dpa - could be supported by the Secretary of State’s direction[4] to amend the Mayor’s approach to Green Belt, allowing London boroughs to review Green Belt boundaries through their Local Plans in accordance with national policy. We have yet to see the revised new London Plan in response to the Secretary of State’s Direction.

Looking ahead up to the mid-2020s, if calculated using the Government’s proposed Standard Method figure of 93,532 homes a year, London’s unmet need could be near a staggering 60,000 homes a year. Alongside anticipated unmet housing need arising from the wider South East, currently approximately 24,000 homes a year and potentially rising to over 40,000 homes a year, Barton Willmore anticipate unmet housing need within London and the wider South East could be in the order of 100,000 homes a year.

Table 1: Housing need and delivery within London and the wider South East

Part of the reason why such substantial under provision has been accepted by the Panel examining the new London Plan is that there is no statutory obligation for the London Mayor, when preparing the London Plan, to cooperate with local planning authorities across the wider South East. As a consequence, there is currently no statutory or policy requirement for London’s unmet housing need to be accommodated beyond its boundary. On this basis, such collaboration which has taken place between the GLA and the wider south east authorities[1] has been ineffectual.

Against this background, it was reassuring that the Secretary of State’s response to the Mayor in March 2020[2] called for a commitment to maximising delivery in London including, ‘producing and delivering a new strategy with authorities in the wider South East to offset housing need in a joined-up way’. This is something Barton Willmore has called for throughout the London Plan examination process[3]. Whilst disappointing that this could not have been secured through the new London Plan, MHCLG should be congratulated for identifying this as a key requirement for the future review process. However, how this will be secured through the promised planning reforms is fundamental to planning for and meeting London’s and the region’s housing needs.

What now needs to happen to produce and deliver a new strategy between London and the wider South East? Something that has proved to be so elusive. However, whilst the government appears to be willing to imposes binding ‘top down’ housing numbers, it has fallen shy of such regional and strategic clarity in plan making. More detail could emerge through the forthcoming Devolution White Paper due this Autumn, but until then….

Towards a Solution

One option which may have merits is to review the Proposed Standard Method so that it supports the Government’s the “levelling up” agenda, redistributing need so that higher housing numbers are allocated in the north of England. This will likely need to form part of the solution, but in my view, it should not be to such an extent as to undermine the Government’s objective of improving affordability. There will always be unmet housing need, likely to be substantial in any scenario, and the planning system must find a way of dealing with this.

Previous commentary published by Barton Willmore produced a three-part approach to producing and delivering a strategy for London’s unmet need[4]. We have reviewed this in response to the Government’s proposed reforms and set out a refreshed set of recommendations:

 1.   A framework for effective strategic cooperation

 The Secretary of State has already advised the Mayor should commit to producing and delivering a new cross-boundary strategy with authorities in the wider South East. Since writing to the Mayor in March 2020, suffice to say, a lot has changed. MHCLG and the Mayor’s office remain engaged in ongoing discussions to finalise the ‘Intend to Publish’ version of the London Plan, expected in Autumn 2020. It is vital that the Secretary of State remains firm and establishes a requirement for the Mayor and the wider South East authorities to prepare and deliver a cross-boundary strategy in policy and/or in statute. We recognise that there could be a tension with this proposal and the White Paper’s proposed removal of the duty to cooperate (something we discuss in more detail under 'stage' 2, below).

 Much could be learned from the governance structures developed and continuing to develop within the Oxford Cambridge Arc. Indeed, as one of the likely main growth areas within the wider South East, the Arc could have an important role to play in meeting strategic housing and other development needs. Importantly, this experience would support the early and ongoing involvement of key government agencies and infrastructure providers/operators. This should include the prospective creation of two statutory sub-national transport bodies (Transport for the South East and England’s Economic Heartland), Highways Agency, DfT, Network Rail, EA, Natural England, water authorities. All will need to be involved.

Given the scale and complexity of the task (see below), and to ensure that rapid progress is made to inform the early stages of undertaking Local Plan reviews across the wider South East, the framework for effective strategic cooperation must be formally established from the outset. Despite its shortcomings, the existing framework should serve as a good starting point – it is the outcomes which were inadequate, not the structure for cooperation. It is concerning that there has been little or no ongoing collaboration since the London Plan Examination Panel’s Report was published in October 2019[5].

 Effective strategic cooperation should be aided by direct involvement by MHCLG and a new Regional Minister charged with overseeing this process, working closely alongside London’s Mayor. Strategic cooperation should also be more practical to manage and coordinate as more local authorities merge to become unitaries. Whilst lacking previously, it goes without say that strong political leadership will be essential.

 2.   A clearly defined process for producing a strategy for London’s unmet housing need

Amongst the many welcome proposals in the White Paper is the removal of sustainability appraisal, to be replaced with a new simplified process of assessing the environmental impacts of plans. Similarly, Local Plans are to be simplified and be subject to a streamlined process when being prepared. This all indicates that a strategy for the wider South East to deliver London’s unmet housing need should be subject to less onerous procedural requirements than at the current time.

 This type of regional strategy (there, we said it!) will likely be non-statutory and should complement other strategies including the two sub-national transport strategies for the wider South East[6]. The relationship between strategic infrastructure planning and planning for growth must be brought back much closer into alignment. In line with the White Paper’s proposals, the strategy should include maps and diagrams – it should be visual. Not to be taken as representing what a future strategy may look like but the diagram below was included within the Draft London Plan (Figure 2.15). The Examination Panel recommended its deletion in response to objections made by local authorities across the wider South East.

Timing will be critical. The proposed statutory timetable for Local Plan reviews as set out in Proposal 8 of the White Paper (something we recommended in a paper produced jointly with the LPDF[7]) requires the rapid production of plans within 18 months and their submission by Autumn 2022. To ensure that these Local Plans support the delivery of need across from WSE including that unmet in London, it will be necessary for a strategy between London and the wider South East authorities to be prepared in parallel and completed in advance of Local Plan Reviews being submitted. An indicative timetable for the respective plans and strategies is set out in Table 2 below.

Table 2: Indicative timetable for the production of Strategy for London’s unmet housing need, the London Plan review and Local Plans across the wider South East

As the timetable set out in Figure 1 above demonstrates, it is imperative that the work to prepare a strategy for London’s unmet housing need is initiated now. This should be integrated with the preparation of Local Plan reviews across the wider South East, ensuring that higher growth areas (and where infrastructure investment will be prioritised) are identified and agreed during the first half of 2022. This means that new Standard Method housing requirements which take account of both constraints and ambition will be fixed by this stage. Of course, the political wrangling which will be required to reach this milestone cannot be underestimated.

Having regard to the past failure of joined up working between London and the wider South East, and the halt of any ongoing collaboration since mid-2019, we recommend that MHCLG ensure that all parties work to a strict timetable.

 3.   A joined-up approach to delivering the strategy for London’s unmet housing need

Under the Government’s proposed planning reforms, the delivery of the strategy should be more straightforward.

It is important to recognise that the development industry will have a significant role to play in ensuring that the Government’s target of 300,000 homes a year by the mid-2020s is realised. This should be supported by the Governments proposed streamlining of the current development management regime. Securing detailed design approvals will require applicants and local authorities to work positively in order to secure the high-quality places which the Government is rightly committed to.

Landowners, promoters and developers will likely be more closely involved in the new process for preparing Local Plans and in the allocation of sites for development. We recommend that the work to justify allocations (and therefore outline planning permission) should naturally lead swiftly into the submission of applications for detailed design approval and, ultimately, the commencement of the development. The industry will need to be ready to rise to this challenge.

Having regard to the timetable for plan making set out in Table 2 above, the plan-led delivery of new homes should start to increase completions and provide for a sustainable long-term plan-led approach to housing delivery across the wider South East. This may result in making its (signficant) contribution towards meeting 300,000 homes a year; it may not. But if the Government can deliver all the above, then I for one will say that they would have succeeded.

[1] The ‘wider South East’ comprises the South East and East of England Regions.

[2] The Barton Willmore Consortium comprised Wates Developments, LIH, L&Q Estates and Cala Homes.

[3] https://www.london.gov.uk/what-we-do/planning/london-plan/new-london-plan/examination-public-draft-new-london-plan/written-statements/housing-requirement-m17#acc-i-55520

[4] https://www.london.gov.uk/sites/default/files/annex_to_letter_to_the_mayor_of_london_13_march_2020.pdf

[5] https://www.london.gov.uk/about-us/organisations-we-work/policy-and-infrastructure-collaboration-across-wider-south-east

[6] https://www.london.gov.uk/sites/default/files/letter_to_the_mayor_of_london_13_march_2020.pdf

[7] https://www.bartonwillmore.co.uk/BartonWillmore/media/Main/news/news/2020/What%20next%20for%20the%20London%20Plan/200115-Draft-London-Plan-Wider-South-East-FINAL-(002).pdf

[8] https://www.bartonwillmore.co.uk/BartonWillmore/media/Main/news/news/2020/What%20next%20for%20the%20London%20Plan/200115-Draft-London-Plan-Wider-South-East-FINAL-(002).pdf

[9] https://www.london.gov.uk/about-us/organisations-we-work/policy-and-infrastructure-collaboration-across-wider-south-east

[10] https://transportforthesoutheast.org.uk/transport-strategy/ and https://www.englandseconomicheartland.com/Pages/transport-strategyconsult.aspx

[11] https://www.bartonwillmore.co.uk/BartonWillmore/media/Main/news/intell/2020/LPDF-Building-a-Recovery-doc-6-20.pdf