The Government’s planning system is ‘underperforming’ and struggling to deliver on its aim of building 300,000 homes a year, auditors have found.
The Ministry of Housing, Communities & Local Government has implemented reforms to the planning system to help local authorities increase the rate of house building.
However, according to a report published today by the National Audit Office, these reforms have not yet helped the Government reach its target of 300,000 homes a year by the mid-2020s.
Between 2005-06 and 2017-18, 177,000 new homes per year have been built on average and the number has never exceeded 224,000.
In 2017, the Ministry of Housing, Communities & Local Government developed a standard method for local authorities to assess the number of new homes needed in their area.
When compared with former housing need assessments, however, this new method reduces the need for new homes in five out of nine regions — which, the NAO says, could ‘hamper local authorities’ plans to regenerate’.
The National Audit Office also found that, as of December 2018, only 44% of councils had an up-to-date local plan setting out their strategies for meeting the need for new homes, despite it being a legislative requirement.
The auditors also criticised the Government for only doing a ‘rough estimate’ of the infrastructure funding required for new homes. This has created ‘uncertainty’, according to the NAO, which has been compounded by the fact that the systems to get developers to contribute to infrastructure costs are not working effectively.
The MHCLG reports that local authorities are increasingly processing planning applications within target timescales.
However, according to the NAO, this might reflect a greater use of time extensions rather than increased efficiency.
The Planning Inspectorate is slow to determine appeals from developers whose applications have been refused and acknowledges its performance is unacceptable, the audit revealed. The time it took to determine an appeal increased from 30 weeks to 38 weeks between 2013-14 and 2017-18.
Total spending by local authorities on planning functions, such as processing planning applications, fell 15% in real terms between 2010-11 and 2017-18.
‘For many years, the supply of new homes has failed to meet demand,’ said Amyas Morse, the head of the NAO.
‘From the flawed method for assessing the number of homes required, to the failure to ensure developers contribute fairly for infrastructure, it is clear the planning system is not working well.
‘The Government needs to take this much more seriously and ensure its new planning policies bring about the change that is needed.’
Responding to the report, the minister of state for housing Kit Malthouse MP said: ‘I recognise the challenges identified by the NAO, and the simple truth is over the last three decades, governments of all stripes have built too few homes of all types.
‘We are determined to build the homes this country needs, and planning plays a key role in our desire to build more, better, faster.
‘But we should also acknowledge that more than 222,000 homes were delivered in 2017-18, the highest level in all but one of the last 31 years.
‘We’re conducting independent reviews on build out rates and planning inquiries.
‘And through multi-billion pound funding, planning reforms and giving councils the freedom to borrow more to build homes, we’re helping to make the housing market work for everyone.’
Cllr Philip Atkins, County Councils Network spokesman for housing, planning, and infrastructure, said: ‘Whilst the Government’s emphasis on building more homes is welcome, CCN has argued for a long time that its planning reforms do not go far enough and bolder change is required to deliver the number of homes the country needs.
‘If we are to build the right homes, in the right places, with the necessary infrastructure, then we need to move towards strategic planning on a county scale, working in strong collaboration with district partners and neighbouring councils.
‘To that end, we would encourage more ‘Housing Deals’ outside of city areas and for rural areas to have the same planning powers that are currently only on offer to urban metro mayors to help deliver more houses in England’s counties.
‘A closer alignment of planning and co-ordinated infrastructure provision across a county-wide geography will enable us to overcome the current fragmented approach to the planning system and build more homes and genuinely sustainable communities.’
Responding to the report, Cllr Martin Tett, Local Government Association’s housing spokesman, said: 'Planning is not a barrier to housebuilding. Council planning departments are doing an incredible job with extremely limited resources, approving 9 out of ten applications, with the majority processed quickly.
'Councils are committed to ensuring homes are built where they are needed, are affordable, of high-quality and supported by adequate infrastructure and services, but it is vital that they have an oversight of local developments.
'We remain clear that the Government’s housing needs formula does not take into account the complexity and unique needs of local housing markets, which vary significantly from place to place, and imposes unfair and undeliverable targets on communities.
'This risks leading to a housebuilding free-for-all which will bypass the needs of local communities and could damage public trust in the planning system.
'By lifting the housing borrowing cap the Government has accepted our argument that councils must play a leading role in solving our national housing shortage.
'With hundreds of thousands of homes in England with planning permission but yet to be built, it also needs to give councils powers to make sure developers build out approved homes in a timely fashion, and use the Spending Review to adequately fund planning departments and allow them to set planning fees locally so they can cover the cost of processing applications.'