Revised National Planning Policy Framework: Proposed reforms

The much-anticipated revised National Planning Policy Framework (NPPF) was published for consultation on 30 July, with the consultation running until 24 September.

The consultation document extends more widely than changes to the NPPF itself, centred around the three pillars of stability, investment and reform.

This article looks at the proposed reform. It should be said at the outset that much in the NPPF remains as before and the reforms might be regarded as tweaks.

The more radical reforms will require legislation, which is to follow.

Looking at the NPPF changes first:

Calculation of housing requirements

The removal of the December 2023 changes to the NPPF and the return to “mandatory” housing targets has been much heralded.

However, the change to the way in which housing requirements are calculated will, arguably, have a greater impact as the government sets a target of 370,000 new homes a year.

To achieve this, it is proposing to move away from the current standard method for identifying local housing need based on ONS 2014 figures for household projections and replace it with a method that takes as its baseline starting point 0.8% of existing housing stock in each local authority area.

This 0.8% figure reflects the average growth in housing stock across all local authorities in the last 10 years.  An affordability adjustment is then applied to this when, as before, house prices are more than four times higher than median earnings, based on a three-year average so that it is readily capable of being updated.

However, this multiplier has been increased to 0.6% to reflect the government’s focus on affordability. A 5% buffer is then applied to the resultant figure. Unlike the previous method, there will be no cap on the increase.

The consultation also refers to the possibility of including rent levels within the price–earnings ratio, but does not currently do so. Views are sought on this.

Alongside the consultation, the government has published a spreadsheet that shows the impact of the changes on each local authority.

Deputy Prime Minister, Angela Rayner, had suggested that this new methodology would produce some “surprises” and the table certainly does that.

While there are reduced figures for those areas previously subject to the 20% urban uplift, the large increases are not confined to the South East. The guidance note issued with the draft NPPF expressly references that the changes are designed to ‘better reflect the growth ambitions across the Midlands and North’. This feels like a real, practical move to rebalance the country, potentially driving regional growth, development and boosting the economy.

Taking an average of increase in stock as the starting point should avoid the wild fluctuations and uncertainties that using household projection figures caused but, as ever, it is yet to be seen whether this method achieves results that better match the need in each area.

Local plans

The transitional arrangements are set out in Annex 1. The revised NPPF will apply to all new local plans one month after publication, subject to certain exceptions.

Where local plans that have been submitted no more than one month after the revised NPPF was published and are more than 200 dwellings below the new housing need figure, they will be required to commence a new plan “at the earliest opportunity”.

Given the number of plans that have been approved with a requirement for an early review which did not take place, the government will have to consider more active intervention than has previously been the case if local plans are going to help deliver its ambitious targets.

The deadline for submission of plans under the current regime has been pushed back from summer 2025 to December 2026. After that, all local plans will need to be prepared in accordance with the procedures set out in the Levelling Up and Regeneration Act.  

Green belt land

Paragraph 124c (now 122 c) strengthens the brownfield first approach – proposals for development should now be regarded as acceptable in principle.

However, where housing, commercial or other identified needs cannot be met, authorities are now required to review their green belt boundaries and must allocate land to meet needs in full “unless there is clear evidence that alterations would fundamentally undermine the function of the Green Belt across the area of the plan as a whole” (paragraph 145, now 142).

The emphasis on looking at the function of the green belt over the whole area covered by the plan is a step-change that requires a more holistic approach than has often been the case in the past.

Where land is to be released, the emphasis is on sustainable locations, with priority given to previously developed land (PDL), followed by “grey belt” and green belt last of all. 
Grey belt is defined as land which was previously developed and other parcels and/or areas of green belt that make a limited contribution to the five purposes of the green belt. 

The PDL definition remains unchanged, essentially land occupied by a permanent structure. It is not clear what including this in the definition of grey belt adds, given the emphasis on PDL, followed by grey belt and only then green belt.

What is clear is that no matter what the state of undeveloped land, it will not be grey belt if, looking at the plan as a whole, it plays an important role in meeting at least one of the five green belt functions.

Significantly, housing, commercial and other development in the green belt (not released through the local plan) will no longer be considered inappropriate if it utilises grey belt land and provides at least 50% affordable housing if a housing development; makes improvements to local and national infrastructure and provides new or improved accessible green space; the authority cannot demonstrate a five-year housing land supply or delivery is below 75% of the housing requirement or it is demonstrably required for local, regional or nationally important development.

To ensure that the 50% affordable housing and necessary infrastructure are provided, the government is proposing that benchmark land values are adopted for viability testing, based on existing use value and “a reasonable and proportionate premium for the landowner”. This means that if a developer paid over the benchmark value for a site and cannot deliver what is required, planning permission must be refused. Late-stage viability testing may be an option if land was bought below the benchmark, but still cannot deliver.

Other reforms

The following are heralded in the consultation but will require legislation:

• Planning fees: increase fees for householder applications, with possible increases for other applications and other planning services but still no proposal to ring-fence. The government are also looking at allowing local authorities to recover their Nationally Significant Infrastructure Project-related costs.
• Nationally Significant Infrastructure Projects: increasing the scope of commercial projects covered, but also raising the thresholds for some renewable energy projects to account for improved generation.
• Strategic planning: it will be coming back, including in non-Mayoral authority areas. This will be welcomed, but it did take a long time to get plans in place last time.
• Climate-change: policy is likely to be strengthened but the government wants ideas on how. There are hints that a more proportionate approach may be taken to flood-risk although the NPPF remains unchanged at present so it remains a consideration.
• Local plan intervention: remove or revise the existing intervention criteria? Either way, if the government is going to drive-forward the changes it is requiring and get anywhere near to delivering its housing targets, it is going to need to take a far more robust stance towards some authorities than has been the case previously.

The changes proposed have been widely welcomed by the real estate industry, but delivering much of this will require proper resourcing across a whole swathe of sectors, not just local authority planning officers.

For example, the renewed emphasis on the provision of affordable homes for social rent comes with a cost - one of the reasons given by Homes England for falling short of its target delivery under the current Affordable Homes Programme.

Skills shortages in the construction industry and the sheer cost of providing national infrastructure projects are all matters that the Government will need to consider and address. It is a promising start, but delivery may not prove as easy.