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What the Housing Need Formula Reveals About the Delivery Test
Published November 7th, 2017
An analysis by Planning indicates that three-quarters of authorities could be in line for potential punitive measures under the first phase of the government’s proposed housing delivery test. We now know the government’s thinking on how it intends the proposed standard method for housing need to operate. But what of another of the significant policy changes – the housing delivery test?
The test assessing housing delivery is measured using official figures for net additional dwellings over a three-year period against councils’ housing requirements. The test will highlight whether the number of homes being built is below target, provide a mechanism for establishing the reasons why, and where necessary trigger policy responses that will ensure that further land comes forward.
The February white paper had made clear that ministers intended to introduce the delivery test in November 2017 but the timetable for the publication of revisions to the framework has slipped and the government’s ‘ambition’ is now to publish a revised, updated framework in Spring 2018.
The white paper also proposed that, for local authorities without up-to-date plans, performance against the test would be measured by comparing net additions with figures produced via the standard method for assessing need from April 2018 (before then, it proposed, delivery would be measured against household projections). But there’s no concrete guarantee that the standard methodology will be brought into force next April. The publication of details of the standard methodology earlier this month, for assessing housing need gives the first indication of the number of authorities that could face sanctions under the delivery test, should it be introduced next year and the methodology as proposed in the housing white paper applied.
The analysis found that net annual additions would fall below 85 per cent of the housing requirement in 61 per cent of authorities. Under proposals for the delivery test’s first phase of sanctions, as set out in the white paper, these authorities would be required to plan for a 20 per cent buffer on their five-year land supply, if they have not already done so. Net annual additions would fall below 95 per cent of the housing requirement (but above 85 per cent) in a further 13.7 per cent of authorities. Only a quarter of authorities would face no intervention.
The requirement for authorities to plan for an extra 20 per cent buffer on their land supplies may not in practice result in additional sites being planned for. Authorities may simply opt to bring sites forward from later in the local plan period. The white paper also proposed the introduction of tougher sanctions under the test from the autumn. In the first instance, from November 2018, the presumption in favour of sustainable development would ‘apply automatically’ in authorities where delivery falls below 25 per cent of the housing requirement. However, Planning’s analysis indicates that very few authorities would be caught by this threshold.
The analysis also suggests that measuring delivery in areas without up-to-date plans against standardised housing need calculations provides a sterner test for many authorities than when delivery rates are calculated using the methodology that the government had proposed should be used ahead of the introduction of the standard method. The white paper had proposed that, if there is no up-to-date plan, delivery would be measured against latest household projections until the standardised method for assessing housing need is introduced. Planning’s analysis finds that, when delivery rates are calculated in this way, the number of authorities facing sanctions drops by more than 20 (see infographic, p11), compared to when delivery for this group of authorities is measured against standard housing need figures.