Matthew Pennycook Minister of State (Housing, Communities and Local Government)
With your permission, Mr Speaker, I would like to update the House on our plan to build the homes our country so desperately needs.
This Labour Government were elected five months ago with a mandate to deliver national renewal. Standing on the steps of Downing Street on 5 July, the Prime Minister made it clear that work on that urgent task would begin immediately, and it did. Within our first month in office, we proposed a bold set of reforms to overhaul a planning system that is faltering on all fronts after a decade of piecemeal and inept tinkering by the Conservative party. Today I confirm to the House that we are delivering the change we promised by publishing an updated national planning policy framework, meeting our commitment to do so before the end of the year, and supporting our ambitious plan for change milestone of building 1.5 million new homes in this Parliament.
The case for grasping the nettle of planning reform in order significantly to boost housing supply and unleash economic growth is incontrovertible. England is in the grip of an acute and entrenched housing crisis, and as you, Mr Speaker, and every Member of the House will know, its detrimental consequences are now all pervasive: a generation locked out of home ownership; 1.3 million people languishing on social housing waiting lists; millions of low-income households forced into insecure, unaffordable and far too often substandard private rented housing; and, to our shame as a nation, just shy of 160,000 homeless children living right now in temporary accommodation. Our economy and the public services that our constituents rely on are also suffering, because as well as blighting countless lives, the housing crisis is consuming ever larger amounts of public money in the form of a rapidly rising housing benefit bill. It is also hampering economic growth and productivity by reducing labour mobility and undermining the capacity of our great towns and cities to realise their full economic potential.
The Government are under no illusions about the scale of the task before us or the challenges that must be overcome and the pitfalls avoided if we are to succeed. But we are absolutely determined to tackle this crisis head on. The previous Government, of course, took a different view. Not only did they fail to meet, even once, the target of 300,000 homes a year that they set themselves, but in a forlorn attempt to appease their anti-house building Back Benchers, they consciously and deliberately chose to exacerbate the housing crisis by making changes to national planning policy that have contributed to plummeting housing supply. We know that the changes required to start putting things right will be uncomfortable for some. We know we will face resistance from vested interests. But this Labour Government will not duck the hard choices that must be confronted to tackle the housing crisis, because the alternative is a future in which a decent, safe, secure and affordable home is a privilege enjoyed only by some, rather than being the birthright of all working people.
Let me turn to the changes that we are making to the framework. We received more than 10,000 responses to our consultation, alongside which my officials and I have held extensive engagement with private house builders, affordable housing providers, local authorities and other organisations from the sector. The views shared with us have been invaluable in helping to refine our initial proposals so that we are able to introduce an effective package of reforms.
Before I set out a number of important areas in which we have made changes, let me touch briefly on some of the proposals that we intend to implement unamended. First, we have reversed the anti-supply changes introduced by the last Government almost exactly a year ago. From the abandonment of mandatory housing targets to the softening of land supply and delivery test provisions, the policies that gave local authorities the freedom to plan for less housing than their nominal targets implied are no more. Secondly, we have made explicit the importance of growth supporting development, from labs to data centres, to supply chains and logistics. In the same vein, we have made clear that the default position for renewable energy deployment should be yes. Thirdly, we strongly promoted mixed tenure development, reflecting robust evidence that attests to the fact that such developments build out faster and create diverse communities. Fourthly, we have made a series of changes to bolster affordable housing delivery and enable local authorities to determine the right mix of affordable housing for their communities. That will support our commitment to deliver the biggest increase in social and affordable house building in a generation.
There are four important areas where we have refined our proposals, and I will turn first to housing targets. As we made clear when launching the consultation in July, restoring a mandatory standard method for assessing housing needs is insufficient if the method itself is not up to the job. As the House will know, we proposed a bold change, increasing the total annual national target from 300,000 to 370,000, ending the reliance on decade-old population projections, and removing the arbitrary 35% urban uplift that resulted in a skewed national distribution that was disproportionately focused on London to the detriment of the rest of the country. We fully intend to maintain the level of ambition outlined in July, but we heard through the consultation a clear view that we should do more to target housing growth in those places where affordability pressures are most acute. We have therefore made the method more responsive to demand, redistributing housing targets towards those places where housing is least affordable, while maintaining the overall target envelope.
Next, let me turn to our reforms to the green belt. As the House knows, ours is a brownfield-first approach to development. As a result of a number of targeted changes we are making to the framework, and our proposals for a brownfield passport, we are prioritising and fast-tracking building on previously developed urban land wherever possible, but we know that there are simply not enough sites on brownfield land registers to deliver the volume of homes that the country needs each year, let alone enough that are viable and in the right location.
In the summer, we proposed that local authorities take a sequential approach to releasing land to meet their housing need: brownfield first, followed by low-quality land in the green belt and only then higher-performing land. To identify low-performing sites we proposed a definition of grey-belt land that reflected the fact that there are areas currently designated as green belt that contribute little by way of aesthetic, public access or ecological value. That approach received broad support through the consultation, but a strong desire was expressed to limit the room for subjectivity. We have therefore set out a clearer description of how to assess whether land meets the definition of grey belt, and we will be providing further guidance to local authorities in the new year to support them with green-belt reviews.
At the centre of our green-belt reforms lies our golden rules, which are designed to make sure that where green-belt land is released, the public derives real benefit from development on it, including more affordable housing to meet local need. In the consultation, we proposed a flat 50% affordable housing target, but we recognise that because land values vary across the country, the limited use of viability assessments should be permitted. Through the consultation, we have recognised that that approach risked uncertainty. If flexibility was needed in some parts of the country because land values were lower, the precise amount of affordable housing to be secured would become a protracted site-by-site negotiation. If a local authority did not allow flexibility, there would be a risk that sites were rendered unviable, with the result that no houses, affordable or otherwise, would get built.
Our final policy therefore takes a different approach to managing variation in land values. Rather than a single 50% target, we are introducing a 15 percentage point premium on top of targets set in local plans, up to a maximum of 50%. Because that means the target itself will be responsive to local circumstances, we will be restricting the ability for site-specific viability assessments until such time as we have amended viability guidance in the spring of next year. By prioritising pragmatism over purity, the golden rules we are putting in place today will give communities the confidence that they will be met and will maximise the number of affordable homes delivered across the country.
Another area where we have made changes is to the presumption in favour of sustainable development. The presumption sits at the heart of the national planning policy framework and means that where a local authority has under-delivered or an up-to-date local plan is not in place, the balance of decision making is tilted in favour of approval. We are determined to ensure that where the presumption applies, it will have real teeth. At the same time, we are clear that development consented through it must be consistent with the clear requirements in national policy relating to sustainability, density, design and the provision of affordable homes. The changes we have made deliver on both those fronts.
Finally, in the consultation we sought views on how our changes apply to local authorities at an advanced stage of plan making. Our proposed transitional arrangements aim to strike a balance between maintaining the progress of plans at more advanced stages of preparation, while maximising proactive planning for the homes our communities need. The core of our proposal—that we only hold back a draft plan where there is a significant gap between the current proposed housing requirement and the new housing target—was well supported. However, we are making three changes.
First, we have taken on board concerns that the transitional period was too tight, so we will provide local planning authorities with an extra two months to progress their plans, extending the transitional period from one month to three. Secondly, and again responding to an ask we heard repeatedly from councils, the transitional arrangements will apply where the draft housing requirement in the plan meets at least 80% of local housing need, rather than the numerical 200 homes threshold we originally proposed. In those instances, the plan will not be held back. Thirdly, where plans are adopted under these arrangements, and where there are existing plans based on the old targets due to run for a number of years yet, we want to see the level of ambition raised sooner rather than later. As a result, from 1 July 2026, we will expect authorities with plans adopted under the old standard method to provide an extra year’s worth of homes in their housing pipeline, helping to accelerate the delivery of new homes.
We recognise that we are asking much from many local authorities, and we are determined to support local leaders trying in good faith to deliver homes for their communities. That is why across dedicated local plan funding, the planning capacity and capability support announced at the Budget and income from raised fees, we will be injecting more than £100 million into the system in the coming year.
We are confident that the revised framework that we are introducing today will support significantly higher rates of house building and sustained economic growth. We have listened carefully to the views expressed in the consultation and adjusted several areas of policy accordingly; now it is for others to do their part. Developers must turn supportive words into action, bringing forward new sites and building them out at pace. Local authorities must embrace the challenge of higher targets and push for more and better development in their areas.
We have moved fast. We have not held back. We have not shied away from controversial decisions, or wavered in the face of those who have sought to chip away at our resolve. With focus and determination, we have pushed on to ensure that we are putting in place a planning system geared toward meeting housing need in full and unleashing economic growth. Change will take time as homes are not built overnight and our dire inheritance means that the climb out of the trough we are in will be a steep one, but by implementing this revised framework today, we have taken another decisive step toward a future in which everyone will enjoy a decent, safe, secure and affordable home in which to live.
John Whittingdale Conservative, Maldon
The Minister intends to impose thousands more houses on my constituency, when there are already not enough school places, not enough doctors and congested roads. Will he at least look at ways in which financial arrangements can be established that would mean that developers can be made to fund necessary infrastructure ahead of house building and sale, rather than waiting for months and possibly years after completion?
Matthew Pennycook Minister of State (Housing, Communities and Local Government)
As I have said, we are giving a considerable amount of thought to what more we can do, in addition to the changes being made today, to ensure that the right infrastructure comes forward. I am happy to give the right hon. Gentleman’s point serious consideration.
Please see below for a clip of Sir John’s question:
