Planning For Homes

House of Commons Public Accounts Committee

Planning for Homes: Speeding up planning applications for major housing developments in England Thirty–third Report of Session 2008–09 Report, together with formal minutes, oral and written evidence Ordered by the House of Commons to be printed 17 June 2009

HC 236 Published on 2 July 2009 by authority of the House of Commons London: The Stationery Office Limited £0.00

The Public Accounts Committee The Committee of Public Accounts is appointed by the House of Commons to examine “the accounts showing the appropriation of the sums granted by Parliament to meet the public expenditure, and of such other accounts laid before Parliament as the committee may think fit” (Standing Order No 148). Current membership Mr Edward Leigh MP (Conservative, Gainsborough) (Chairman) Mr Richard Bacon MP (Conservative, South Norfolk) Angela Browning MP (Conservative, Tiverton and Honiton) Mr Paul Burstow MP (Liberal Democrat, Sutton and Cheam) Mr Douglas Carswell MP (Conservative, Harwich) Rt Hon David Curry MP (Conservative, Skipton and Ripon) Mr Ian Davidson MP (Labour, Glasgow South West) Angela Eagle MP (Labour, Wallasey) Nigel Griffiths MP (Labour, Edinburgh South) Rt Hon Keith Hill MP (Labour, Streatham) Mr Austin Mitchell MP (Labour, Great Grimsby) Dr John Pugh MP (Liberal Democrat, Southport) Geraldine Smith MP (Labour, Morecombe and Lunesdale) Rt Hon Don Touhig MP (Labour, Islwyn) Rt Hon Alan Williams MP (Labour, Swansea West) Phil Wilson MP (Labour, Sedgefield) The following member was also a member of the committee during the inquiry: Mr Philip Dunne MP (Conservative, Ludlow) Powers Powers of the Committee of Public Accounts are set out in House of Commons Standing Orders, principally in SO No 148. These are available on the Internet via www.parliament.uk. Publication The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the Internet at http://www.parliament.uk/pac. A list of Reports of the Committee in the present Session is at the back of this volume. Committee staff The current staff of the Committee is Mark Etherton (Clerk), Lorna Horton (Senior Committee Assistant), Pam Morris (Committee Assistant), Jane Lauder (Committee Assistant) and Alex Paterson (Media Officer). Contacts All correspondence should be addressed to the Clerk, Committee of Public Accounts, House of Commons, 7 Millbank, London SW1P 3JA. The telephone number for general enquiries is 020 7219 5708; the Committee’s email address is [email protected].

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Contents Report

Page

Summary

3

Conclusions and recommendations

5

1

Improving incentives for local planning authorities

7

2

Improving the development management process

10

3

Improving planning capacity

13

Formal Minutes

15

Witnesses

16

List of written evidence

16

List of Reports from the Committee of Public Accounts 2008–09

17

3

Summary Housing developments require the approval of planning applications by local planning authorities (Authorities) before they can proceed. The Department for Communities and Local Government (the Department) has implemented a number of measures in recent years to improve the performance of the development management stage of the planning process, in which applications are considered by Authorities, and to boost planning capacity. The measures include the setting of national targets for the speed of Authority decision-making, and the allocation of £68 million a year in Planning Delivery Grant (the Grant) to Authorities as a reward for meeting targets. The Grant, together with the setting of a 13 week target for decisions, has provided Authorities with an incentive to determine applications more quickly. Between 2002–03 and 2007–08, the percentage of major residential planning applications decided within 13 weeks almost doubled to 67%. The Department does not know, however, how long it takes on average for applications to be determined, whether the time taken has fallen over time, and whether there has been an improvement in the total time taken for schemes to progress from pre-application to the start of construction. The target regime has resulted in some perverse consequences. For example, as Authorities prioritised their efforts on taking decisions within the 13 week target period, there has been less focus on applications that have missed the target. The Department’s measures to improve the application process have met with mixed success. The Department has encouraged Authorities to hold pre-application discussions with developers, but there is a lack of clarity across Authorities about the purpose of these discussions. Some Authorities have not deployed sufficiently senior and experienced staff in the discussions, and Authorities have also taken different approaches to charging. Some Authorities have not charged fees in order to encourage discussions, whereas others have used a fee regime to assist the resourcing of such discussions. Authorities’ monitoring of developers’ discharge of the conditions attached to planning permissions has been given a low priority, partly because of the focus on meeting the 13 week decision target. Some developers and Authorities have expressed concerns about the time taken by statutory consultees such as the Highways Agency, Natural England, Environment Agency and English Heritage to provide comments on applications, thus delaying decisions. The Department’s measures to build public sector planning capacity have also had mixed success. Authorities have spent about 95% of Planning Delivery Grant on their planning functions, although the extent to which it has resulted in extra expenditure on planning is unclear. The Department’s bursary scheme for increasing the number of planners has helped to double the number of students taking post-graduate planning courses, but the numbers involved remain small. Expansion of the skills base may also be constrained by the economic recession as Authorities’ income from planning fees falls due to fewer

4

applications. On the basis of a report by the Comptroller and Auditor General,1 we examined the Department on the incentives to encourage Authorities to perform well, the changes made to the development management process and the Department’s efforts to increase planning capacity.

1

C&AG’s Report, Planning for Homes: Speeding up planning applications for major housing developments in England, HC (2008-09) 15

5

Conclusions and recommendations 1.

Through its incentive and target regime to encourage Authorities to determine planning applications more quickly, the Department has successfully increased the number of major residential planning applications decided within the target of 13 weeks from 37% in 2002–03 to 67% in 2007–08. There is some evidence that the target has created perverse incentives, with rejections being decided more quickly and applications which exceed the 13 week target receiving lower priority. The Department should consider the introduction of a new performance measure which is based on the average time taken for a decision to be made, and which enables the average time taken to reject or accept applications to be separately monitored.

2.

The Department’s ability to influence the overall time taken to deliver new housing is limited by its lack of data on the elapsed time from pre-application stage to start of construction. The National Audit Office found that the preapplication stage can be over 30 weeks, and the time between approval and start of construction almost 35 weeks, with the whole process taking on average almost two years. The Department should collect data on the average time for each stage of the planning process to better inform future actions to speed up the planning system.

3.

Pre-application discussions can improve the quality of planning applications and the timeliness of subsequent decisions, but there is a lack of clarity over their purpose and an inconsistent approach across Authorities on resourcing and funding these discussions. In consultation with Authorities, the Department should seek to clarify the purpose and expectations of pre-application discussions for applicants. It should also research whether having a formal charging regime for major applications leads to more experienced Authority staff being deployed on such activities, and to better quality applications which result in quicker decisions, and ultimately an overall cost saving for Authorities and developers.

4.

Action is needed to tackle the concerns of developers and some Authorities about the time taken to comment on planning applications by statutory consultees such as the Highways Agency, Environment Agency, Natural England and English Heritage. As part of its current review the Department should put in place processes to collect and monitor Authority and developer satisfaction with the performance of statutory consultees, covering both timeliness and quality of response.

5.

Action is needed to determine whether the current list of statutory consultees is adequate. Based on an understanding of the risks attaching to sites with potential for development, the Department should review the completeness of the list of current statutory consultees and consider, in particular, whether water companies should be added.

6.

Authorities have increased the number of conditions attached to planning approvals in recent years, but have not prioritised monitoring the proper discharge of these conditions, partly because of their focus on meeting the 13 week decision target. In revising the performance management regime for speeding up planning applications and approvals the Department should work with

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Authorities to develop measures which encourage performance improvement across the planning process as a whole. 7.

The Department’s bursary scheme has been successful in increasing the number of students taking post-graduate planning courses, but the fall in planning applications arising from the economic downturn may threaten medium term enhancement of Authorities’ planning skills base. The Department should seek data from Authorities on the impact of the economic downturn on planning department resources and determine whether further action is needed to preserve and enhance public sector planning skills to meet future requirements.

7

1 Improving incentives for local planning authorities 1. Housing developments require the approval of planning applications by local planning authorities (Authorities) before they can proceed. The process by which such applications are considered is known as the development management process (Figure 1). Figure 1: The development management process

•

The pre-application stage: during which Authorities and developers can meet to discuss how an application might be handled, including the timetable and any other issues or difficulties.

•

The application stage: during which the Authority considers whether to approve or reject the proposed development. As part of its considerations, an Authority consults local residents and other stakeholders, including certain bodies to whom Authorities are obliged by law to refer particular types of application for comment (known as ‘statutory consultees’).

•

The post-approval stage: during which the developer must seek the agreement of the Authority that any conditions attached to the approved development have been met (or ‘discharged’) to its satisfaction.

2. The Department for Communities and Local Government (the Department) has implemented a number of measures to improve the performance of Authorities in carrying out the development management process. The Department’s measures included the setting of national targets for the speed of Authorities’ decision-making in the application stage, and the allocation, between 2003–04 and 2007–08, of £68 million a year in Planning Delivery Grant to Authorities as a reward for meeting these targets. Those Authorities which performed poorly against the targets were publicly identified and received extra support.2 3. The Department introduced the incentive regime to improve the timeliness of decision making by Authorities. Authorities had not attached a high importance to reaching a timely decision, and house builders and developers have complained about the time taken to deal with major housing applications.3 4. Since the introduction of the Department’s incentives the number of major residential planning applications decided within 13 weeks, the chosen performance target, has increased from 37% of decisions in 2002–03 to 67% in 2007–08.4 This improvement in performance has assisted an increase in the rate of housing growth. Until the recent economic downturn, the housing supply had increased to 207,500 new homes a year by 2007–08, against the Government’s target of 240,000 a year by 2016. The 13 week target also gave developers greater certainty over when a decision would be made.5 5. The Department’s data only records the number of decisions made within 13 weeks. It does not know how many of the decisions in the 13 weeks were approvals or rejections, or how long it takes on average for Authorities to decide on applications. The National Audit 2

Q 57; C&AG’s Report, paras 1, 2.2–2.3

3

Qq 2, 13

4

Qq 2, 13

5

Qq 11–12, 15, 18–19; Communities and Local Government Statistical Release, Net supply of housing: 2007–08, England

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Office found that for 100 specific cases approved in 2006–07 and examined in depth, approval took on average over 25 weeks.6 6. The target regime has resulted in some perverse consequences as Authorities focus their efforts on taking decisions within the 13 week target period. For example, Authorities can give less priority to dealing with applications once they have missed the target. The National Audit Office found that, for 48 of the 100 cases it examined which were not approved within 13 weeks, it took on average almost 41 weeks in total to gain approval. The National Audit Office also found that for the 11 Authorities it visited, 98% of rejections were decided within 13 weeks in 2006–07, compared to only 49% of approvals. Nationally, an increasing proportion of decisions have been rejections. Some 34% of decisions on major residential applications in 2007–08 were rejections, compared to 26% in 2002–03. The Department did not consider that Authorities’ improved performance had been achieved only by their rejecting increasing numbers of applications. Instead, the rate of rejection reflected weaknesses in the quality of the applications received. Authorities faced the risk of an abatement of up to 20% of their Planning Delivery Grant if they rejected applications, or had them withdrawn, simply to meet the 13 week target.7 7. The Department acknowledged that target regimes need to be reviewed every three to four years to make sure they continue to be fit for purpose. The issues facing the planning system had changed since 2002–03 and timeliness of decisions was no longer the major problem. In 2007–08, the Department revised its performance regime, setting a new national objective for 80% of major applications to be decided in 13 weeks by 2011. Authorities are still required to report their performance in terms of the number of major applications decided within 13 weeks, but they have greater flexibility in setting their own targets for performance against this measure. 8. Applications where Planning Performance Agreements are successfully used are also exempt from the 13 week measure. Planning Performance Agreements are plans for the management of applications which are negotiated between an Authority and a developer before an application is submitted, and which provide a timetable and list of agreed actions for the application’s handling in both pre-application and application stages. The allocation of the new Housing and Planning Delivery Grant is less dependent on Authorities’ performance in determining applications, with only up to 8% of the Grant at risk from poor performance against the 13 week target. Over 60% of the Grant is dependent on an Authority’s record in delivering increased numbers of new homes.8 9. The 13 week target focused on the application stage as this was the part of the development management process over which the Department considered that Authorities had most control. Authorities have a role to play both before an application is submitted and after a decision is made, but the 13 week target does not cover these stages as they are largely determined by the applicant. The time taken at these stages can be substantial, but the Department did not have data on how long they took. The National Audit Office found that, for its sample of 100 approvals in 2006–07, the pre-application stage took on average

6

Qq 2–3, 90; C&AG’s Report, paras 2.6–2.7

7

Qq 5, 7, 16–17; Ev 14; C&AG’s Report, paras 2.6, 2.17, Figure 2

8

Qq 3, 5, 7, 51; C&AG’s Report, paras 2.16, 2.19–2.20

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just over 30 weeks, while the average time from the Authority’s decision to the start of construction was almost 35 weeks. Both these periods may have increased over recent years, and many house builders are currently delaying the start of construction for approved schemes because of the lack of demand.9 10. The Department does not know how long the whole development management process takes from end-to-end. For the 100 cases examined by the National Audit Office, the whole process took, on average, 98 weeks. Speeding up the whole process would assist delivery of the new homes to meet underlying housing need, estimated at 223,000 new households a year. The Department is proposing to act on the National Audit Office’s recommendation that it should collect more data on how long the whole process takes, via regular surveys of a sample of major residential applications, in order to measure subsequent changes in performance.10 11. In November 2008, the Killian Pretty Review of the planning application system recommended that the 13 week target be replaced with a new performance indicator, which measured applicants’ satisfaction with the quality of service provided by Authorities in handling applications. Quality of service would include a number of aspects of performance, including the timeliness of the application decision. In its formal response to the review in March 2009, the Department accepted the need to revise its approach to targets. It intends to work with key stakeholders to identify and test options for measuring performance in a more holistic way, and to have a new approach in place in time for the next revision of the local authority performance framework, which takes effect from April 2011.11

9

Qq 8, 29, 36, 53–54, 59; C&AG’s Report, paras 2.8–2.9

10

Qq 8, 12, 26, 84; C&AG’s Report, Recommendation 1

11

Qq 4, 62–64; C&AG’s Report, para 2.21; Killian Pretty Review, Planning Applications: A faster and more responsive system—Final Report, Recommendation 15; Government Response to the Killian Pretty Review, Recommendation 15(a)

10

2 Improving the development management process 12. Discussions between Authorities and developers in the pre-application stage can improve the quality of the subsequent application and, therefore, the speed of handling by the Authority, providing developers with greater certainty. The Department has encouraged such discussions, but in some cases there has been a lack of clarity over the purpose of the discussions and an inconsistency in the approach which Authorities have taken to them. In some cases, the Authority staff involved have lacked the necessary seniority and experience, and there has been a lack of continuity in staffing between the discussion and the application stages. Authorities have also adopted different approaches to charging for the discussions, with some not charging at all in order to encourage developers to hold pre-application discussions. Other Authorities charge for preapplication discussions as it contributes to the cost of undertaking and resourcing the discussions adequately.12 13. The Department is seeking to promote greater consistency in future through a series of regional programmes for Authorities, organised by the Planning Advisory Service, on the value of pre-application discussions and on when it is appropriate to charge for them. The wider use of Planning Performance Agreements, which provide an agreed timetable for the handling of an application, is expected to add more weight and rigour to pre-application discussions. The Department intends to set out its expectations about the pre-application stage, including a requirement on each Authority to have a clear statement on their approach to charging. Being over-prescriptive would risk making discussions a formal part of the planning process.13 14. To minimise delays in the handling of applications, in August 2005 the Department introduced a duty for statutory consultees to respond to a request for comments on an application within 21 days of receipt of the request, or longer where agreed with the Authority. The four main national statutory consultees—the Environment Agency, Highways Agency, English Heritage and Natural England—reported high levels of performance against the deadline. However, the time taken by the four main national consultees to provide comments on the 100 applications examined by the National Audit Office varied greatly. Around 20% of Authorities and 74% of housebuilders surveyed by the National Audit Office expressed concerns about the timeliness of statutory consultees’ responses. The collection by the four main national consultees of feedback from Authorities and developers on their performance and on the impact of the comments they made was variable. Only the Environment Agency regularly sought feedback, in relation to its consultation responses on flood risk.14 15. The Department is carrying out a review of statutory consultation, and plans to discuss with statutory consultees how the consultation process can be improved and how they can

12

Qq 9, 17, 29, 42–43, 55, 57, 59; C&AG’s Report, paras 3.13–3.15

13

Qq 9, 17, 54, 56, 59; Government Response to the Killian Pretty Review, Recommendation 4(a)

14

Qq 10, 41, 44; C&AG’s report, paras 3.20, 3.22, 3.23, Figures 10, 19

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obtain better feedback from Authorities. It also intends to meet representatives from statutory consultees annually to discuss performance issues and disseminate good practice. The Department is looking to develop an electronic consultation hub, which would facilitate delivery of statutory consultees’ comments.15 16. The Department last produced a statutory list of requirements for consultation in 1995. There have been several changes in guidance and legislation since then. As part of its review the Department is re-examining the list of bodies with which Authorities are statutorily required to consult and the frequency of consultation. The aim has been to keep the list of bodies to a minimum but the Department would consider whether water companies should be added for consultations on flood risk.16 17. A number of conditions may be attached to an approved application which the applicant is required to meet (or ‘discharge’) before either construction can commence, or the completed development can be occupied or come into operation. To discharge a condition, the developer must seek the approval of the Authority that the condition has been met to its satisfaction. Currently, Authorities often prioritise dealing with new applications rather than following up whether conditions attached to approved applications have been discharged appropriately, partly because of their focus on meeting the 13 week target for decisions. In April 2008, the Department introduced a fee regime for the discharge of conditions to enable Authorities to release extra resources for this work. During 2009, the Department intends to undertake a comprehensive review of planning conditions, including the processes for the discharge of conditions.17 18. A Section 106 Agreement is an agreement between the developer and Authority under section 106 of the Town and Country Planning Act 1990, whereby the developer is required to carry out specified obligations when implementing a planning permission. In recent years, as land values have risen, Authorities have increased demands on developers in respect of the planning obligations contained in Section 106 Agreements and the conditions attached to approvals. The National Audit Office found, for example, that there were on average, 17 conditions attached to each of the 100 approvals it had examined. The negotiation of planning obligations and conditions can be a cause of delay and create uncertainty for developers. The Government introduced the Community Infrastructure Levy in the Planning Act 2008 which allows Authorities to charge developers a pre-set amount to cover the cost of public infrastructure associated with their proposed scheme. The aim is to reduce the need for conditions attached to the approval of an application and to provide developers with advance notice of the contributions they will be required to make.18 19. In changing the development management process, the Department has sought to improve the certainty, speed and efficiency of the planning system without losing the community’s ability to influence development decisions. There was a need to simplify

15

Qq 10, 41, 45, 73–74; C&AG’s Report, paras 3.25–3.26, 3.29–3.30; Government Response to the Killian Pretty Review, Recommendation 9(a)

16

Qq 45, 65, 67; C&AG’s Report, para 3.25; Government Response to the Killian Pretty Review, Recommendation 9(a)

17

Q 61; C&AG’s Report, para 2.18; Government Response to the Killian Pretty Review, Recommendation 6

18

Qq 30, 49; C&AG’s Report, para 2.18

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planning language to make it easier for the citizen to understand the system and to make an application.19

19

Qq 60, 88

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3 Improving planning capacity 20. Around 2000, there was a shortage of planners within Authorities’ planning departments, and some Authorities relied on temporary staff from overseas. At one time up to 30% of planners in London came from overseas, and Universities closed planning courses because of insufficient demand. In response, the Department took a number of steps to improve planning capacity. These were: •

between 2003–04 and 2007–08 it allocated approximately £110 million a year in Planning Delivery Grant to Authorities and county councils, of which £68 million a year was dependent on their performance in handling planning applications;

•

it sanctioned increases of 25% in 2005 and 23% in April 2008 in the fees which Authorities could charge for planning applications, and

•

from 2004–05 to 2007–08, it spent £4.8 million on 513 bursaries for students on post-graduate planning courses to increase the number of qualified planners.20

21. The measures have had some success. Authorities have used Planning Delivery Grant to invest in the capacity of their planning departments, for example, by recruiting and training new staff. Reliance on temporary staff from overseas has been reduced. The Department believes that between 93% and 97% of Authorities spent their Planning Delivery Grant on their planning functions. There was no evidence that Authorities had made allowances for the extra funding when setting planning departments’ budgets by reducing contributions from elsewhere.21 22. The Department’s bursary scheme has succeeded in increasing the number of qualified planning staff. The number of students taking post-graduate planning courses doubled to just over 1,000 in 2006–07. The scheme has also encouraged more universities to offer planning courses, with 29 planning schools now accredited with the Royal Town Planning Institute. From 2008–09, bursary holders are required to spend at least two of their first five years of employment in the public sector, to enable the public sector to benefit from its investment.22 23. The economic downturn has led to a substantial reduction in the number of planning applications being made to Authorities. Authorities are being encouraged to use the opportunity provided by this reduction to complete preparation of Local Development Frameworks23 and to improve their systems, so that they are well placed to handle any increase in applications once the economy recovers. Authorities face shortfalls in income

20

Qq 14, 38, 40; C&AG’s Report, paras 3.2, 3.4–3.5

21

Qq 14, 19–21, 39–40; Ev 14; C&AG’s Report, para 3.3

22

Qq 39, 40, 86–88; C&AG’s Report, paras 3.6, 3.8, Figure 7

23

Local Development Frameworks are a set of documents, prepared by each Authority, which sets out how the Authority’s area should change over the next 15 to 20 years and identifies sites earmarked for development or conservation

14

from planning fees because of the reduced number of applications, which may lead them to reduce the size of their planning services. The Department is monitoring the situation.24 24. The Department has already taken a number of measures to help maintain planning capacity. Between 2008–09 and 2010–11, it plans to allocate £170 million a year in Housing and Planning Delivery Grant to Authorities, and to spend £4 million on a further 405 bursaries for planning students. During 2009, it intends to consult on further increases in Authorities’ planning fees. It is working closely with local government, the professions, the private sector, and academia to implement a programme to address labour shortages and skills in planning.25

24

Qq 11, 47–48

25

Qq 47, 86; C&AG’s Report, paras 3.2, 3.4–3.5; Government Response to the Killian Pretty Review, Recommendation 14(a)

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Formal Minutes Wednesday 17 June 2009 Members present: Mr Edward Leigh, in the Chair Mr Richard Bacon Mr Ian Davidson

Rt Hon Keith Hill

Draft Report (Planning for Homes: Speeding up planning applications for major housing developments in England), proposed by the Chairman, brought up and read. Ordered, That the draft Report be read a second time, paragraph by paragraph. Paragraphs 1 to 24 read and agreed to. Conclusions and recommendations read and agreed to. Summary read and agreed to. Resolved, That the Report be the Thirty-third Report of the Committee to the House. Ordered, That the Chairman make the Report to the House. [Adjourned till Wednesday 24 June at 3.30 pm

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Witnesses Wednesday 4 February 2009

Page

Mr Peter Housden, Permanent Secretary, Mr Richard McCarthy, Director General Housing and Planning, and Mr Steve Quartermain, Chief Planner, Department for Communities and Local Government

Ev 1

List of written evidence Department for Communities and Local Government

Ev 14

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List of Reports from the Committee of Public Accounts 2008–09 First Report Second Report

Defence Information Infrastructure The National Programme for IT in the NHS: Progress since 2006 Third Report Skills for Life: Progress in Improving Adult Literacy and Numeracy Fourth Report Widening participation in higher education Fifth Report Programmes to reduce household energy consumption Sixth Report The procurement of goods and services by HM Prison Service Seventh Report Excess Votes 2007–08 Eighth Report Ministry of Defence: Chinook Mk 3 Ninth Report Protecting the public: the work of the Parole Board Tenth Report New Dimension—Enhancing the Fire and Rescue Services’ capacity to respond to terrorist and other large-scale incidents Eleventh Report The United Kingdom’s Future Nuclear Deterrent Capability Twelfth Report Selection of the new Comptroller and Auditor General Thirteenth Report Department for Work and Pensions: Handling Customer Complaints Fourteenth Report HM Revenue and Customs: Tax Credits and Income Tax Fifteenth Report Independent Police Complaints Commission Sixteenth Report Department for International Development: Operating in insecure environments Seventeenth Report Central government’s management of service contracts Eighteenth Report Investing for Development: the Department for International Development’s oversight of CDC Group plc Nineteenth Report End of life care Twentieth Report Ministry of Defence: Major Projects Report 2008 Twenty-first Report The Department for Transport: Letting Rail Franchises 2005–07 Twenty-second Report Financial Management in the NHS: Report on the NHS Summarised Accounts 2007–08 Twenty-third Report Mathematics performance in primary schools: getting the best results Twenty-fourth Report Maintaining the Occupied Royal Palaces Twenty-fifth Report The efficiency of radio production at the BBC Twenty-sixth Report Management of tax debt Twenty-seventh Building Schools for the Future: renewing the Report secondary school estate Twenty-eighth Report Management of Asylum Applications Twenty-ninth Report NHS Pay Modernisation in England: Agenda for Change Thirtieth Report Ministry of Defence: Type 45 Destroyer Thirty-first Report The Nationalisation of Northern Rock Thirty-second Report Financial Management in the European Union Thirty-third Report Planning for Homes: Speeding up planning applications for major housing developments in England

HC 100 HC 153 HC 154 HC 226 HC 228 HC 71 HC 248 HC 247 HC 251

HC 249 HC 250 HC 256 HC 312 HC 311 HC 335 HC 334 HC 152

HC 94 HC 99 HC 165 HC 191 HC 225 HC 44 HC 201 HC 285 HC 216 HC 274 HC 325 HC 310 HC 372 HC 394 HC 698

HC 236

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Committee of Public Accounts: Evidence Ev 1

Oral evidence Taken before the Committee of Public Accounts on Wednesday 4 February 2009 Members present: Mr Richard Leigh, in the Chair Mr Richard Bacon Mr David Curry Keith Hill Mr Austin Mitchell

Dr John Pugh Mr Don Touhig Mr Alan Williams

Mr Tim Burr, Comptroller and Auditor General, Wendy Kenway-Smith, Assistant Auditor General and Mr David Corner, Director, National Audit OYce, were in attendance. Ms Paula Diggle, Treasury OYcer of Accounts, HM Treasury, was in attendance. REPORT BY THE COMPTROLLER AND AUDITOR GENERAL PLANNING FOR HOMES: SPEEDING UP PLANNING APPLICATIONS FOR MAJOR HOUSING DEVELOPMENTS IN ENGLAND (HC 15) Witnesses: Mr Peter Housden, Permanent Secretary, Mr Richard McCarthy, Director General Housing and Planning and Mr Steve Quartermain, Chief Planner, Department for Communities and Local Government, gave evidence. Q1 Chairman: Good afternoon, welcome to the Committee of Public Accounts where today we are looking at the Comptroller and Auditor General’s Report Planning for Homes: Speeding up planning applications for major housing developments in England. We welcome back to the Committee Peter Housden, who is the permanent secretary of the Department for Communities and Local Government. Would you like to introduce your two colleagues? Mr Housden: On my right is Richard McCarthy who is the Director General for Housing and Planning in the Department. On my left is Stephen Quartermain who is the Chief Planner within the Department. Q2 Chairman: Obviously it makes sense to try to encourage local authorities to deal with planning applications expeditiously and we read right at the beginning of the Report that you are paying £68 million a year and the idea is that that money is handed out to local authorities and it is supposed to encourage them to deal with these things as quickly as possible. However, if we look at paragraph 2.6 on page 13 of the Report we see “There are a number of drawbacks to the Department’s chosen performance measure, the percentage of major applications determined within 13 weeks. It does not record whether the decision taken was to approve or reject, so the Department has no reliable data on how quickly decisions to approve are made”. It seems to me that the problem is that you are spending all this money but you do not actually know whether this has resulted in more houses being bought for development, which is a key point, is it not? Mr Housden: Thank you for the opportunity to come to talk about this with the Committee; we welcome it. If you go back to the problem the

Department was trying to solve in 2002–03, it was one where the general performance of planning authorities was quite poor in respect of timeliness. That you dealt with applications expeditiously had not been identified as a quality of a good planning department. Q3 Chairman: I am sure the whole committee agrees with you absolutely. The only question is the way this has been carried out actually allows you to get the information you need. The whole point of this is to get more houses built on the ground. Mr Housden: Yes. The point I was getting to here is that of its time it was a fit-for-purpose measure; it did serve to focus the attention of planning departments on the importance of timeliness. It was backed up by a comprehensive regime which we will talk about now. Where we agree with the Comptroller’s Report strongly is that in 2008–09 you can now move on to a more sophisticated regime; we have moved on to a diVerent page and there is a diVerent set of issues in front of us. We have had this conversation before in this Committee. We did think hard throughout this period about burdens we were placing on local authorities because it is an easy thing for Government to demand information right across the board and then make very little use of it. We have recently looked again at the business case for a comprehensive national planning register which would give us from all planning authorities all data and would satisfy all these demands for all time. We were not however satisfied that would represent value for money. Q4 Chairman: Fair enough. In a way we may be wasting a lot of time, if we spend all afternoon asking you questions about a system which you appear to

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Ev 2 Committee of Public Accounts: Evidence

4 February 2009 Department for Communities and Local Government

suggest met its purpose but is now being reformed. Do you want to tell us what ideas you have for the future? Mr Housden: We make sure that we are in regular dialogue not only with planners but with people who use the system, developers, builders, citizens across the board. We have a number of stakeholder forums, but you will know from the Report that we recently asked David Pretty and Joanna Killian to have a systematic look at where the system might go next and there is a range of measures in their report. Government have yet to publish their response but on the report’s publication Mrs Beckett welcomed its broad thrust. A lot of it is about proportionality and taking out another substantial number of applications from the system. You will have seen over the years how we have focused the planning system more and more only on those issues which need its attention: some things about proportionality; some things about stakeholders, particularly the statutory consultees, how they are engaged with it; and a range of other movements like that. A last point, to come back to where you started, they have encouraged us to think harder about a wider range of measures which would pick up quality as well as speed. Neither they nor we think that is going to be a straightforward thing to do but we are determined to continue to look for that range of measures as we go along. Q5 Chairman: That is clearly needed. We see, again looking at paragraph 2.6 “Our examination of the Authorities’ records revealed that only 49% of approvals were made within this deadline, compared to 98% of rejections. Proposals that are clearly unacceptable can be dealt with more quickly, while those which are less clear-cut often need a lot of further work to make them acceptable”. What appears to be happening is that this target-driven approach is just encouraging authorities to reject quickly; get under the deadline and have a quick rejection. Do you think that is an unfair criticism? Mr Housden: Later on the Report does refer to some of the perverse incentives, sometimes called “gaming” in the trade, that do go on with any target regime. This does go to the point that they probably all have a shelf life; you can get some impetus for three or four years but then you do need to reflect. Q6 Chairman: These perverse incentives are dealt with in paragraph 2.17, are they not? Mr Housden: Yes. Q7 Chairman: One of them is at the top of page 16 of this Report “There was a lack of incentive for Authorities to tackle applications once they had missed the 13 week target”. They are trying very hard for 13 weeks and once they have missed it they give up. Mr Housden: Yes, there is some anecdotal evidence around that and people who are as familiar with target regimes as your Committee will be would not be surprised to see that. On your point about rejections, Steven Quartermain may be able to help from a specialist perspective. Our sense is that on

quite a lot of those applications you can see fairly early on that there is something fundamental around and that you are going to have to reject. It is the larger more complex ones where they are likely to succeed but a series of really quite significant deliberations is needed. Mr Quartermain: I suppose the view is that, if you look at the actual number of applications approved, the planning system does deliver more approvals than refusals in terms of the percentage. We have tried to address this issue about the incentive being towards approvals by incentivising delivery. It has to be seen in the round. Q8 Chairman: As I said right at the beginning, presumably what matters is actually ensuring that we get more houses built, but we read in paragraph 2.9 “These lengthy procedures . . . meant that the total time taken for these approvals, from the first pre-application discussion to start of construction, was, on average, almost 98 weeks”. That is two years and it is not good enough, is it? How are you going to try to finesse the system now so that we actually get approval through quickly? Mr Housden: We focus here very much on the local authority role in the development process. The preapplication and the post-application periods to which you refer there, those three elements which make up the total time elapsed, really are outwith the control of the local authority. They will be led by the developer as they are thinking about the type of scheme they want, then, when they have their approval, what they will decide to do with it. You will see in the Report the interesting information about the proportion of approvals that actually go on to any development, so there is quite a thin relationship there. What this piece of work was focused on was to get the bit of work local authorities could control as timely, eVective and quality as possible. I think the Report gives some fair indications of the success we had in that objective. We do think it is important, however, that we know about the overall process as you describe. There is a recommendation here that we ought to look periodically through surveys at that type of timeelapsed issue so that we understand it. We think that is sound and we will do that when it is appropriate. Q9 Chairman: We, as Members of Parliament, get many people coming to see us in our surgeries about planning applications. It always seems to me that the most important discussion to encourage is actually an oV-the-record type of discussion between the local authority and the developer so that we can get these applications right. There seems to be a lack of consistency about this. I just wondered how you can try to ensure this. Some charge, some do not charge, some encourage it, some do not encourage it, some are very formal and some are much more informal in their approach. I know from my own constituents who come to see me that some find it very diYcult to get through to the planning department; they cannot have serious discussions.

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Mr McCarthy: The issue about pre-application discussions is an important one. You may be aware that also came out through the Killian Pretty Review and it is an issue we are concerned about. It is fair to say that there is an inconsistency of treatment. The danger is in being too prescriptive about it, actually locking it in to being a more formal part of the planning process. What we are doing is, through a series of regional programmes, working with the Planning Advisory Service to advise local authorities about the value you can get from them, the importance of those in the planning system enabling that process to take place, when it is appropriate to charge and we are also looking at issuing further guidance. Without constraining authorities to have an appropriate pre-planning conversation—and that is the point, therefore it is informal, it is guiding people—we want to enable people to do that on a more consistent basis. You are right that it is an area where we have to make further improvements and that is an issue we are looking at and are involved in right now in our engagement with individual planning authorities. Q10 Chairman: You mentioned the statutory consultees. House builders often complain about the performance of statutory consultees such as English Heritage and the Environment Agency. There appears to be a lack of feedback and consistency. Are you working on this? Mr Housden: Yes and we do have some measures of their performance which on the surface look quite reasonable. We listened particularly to the Killian Pretty testimony around this and want to talk to each of those consultees, particularly the four major ones, about how we can learn more from the processes. You will have noticed, for example, the Environment Agency actually does survey applicants to get feedback but we feel we could, with profit, draw more on what those agencies are getting from their own feedback and get the system working more eVectively. Q11 Chairman: Everyone is talking about the current economic situation. In this context what are your conclusions? What research have you done? How is it going to aVect your targets for getting these houses built? Have you done any work on this? Mr Housden: Indeed; it is an abiding preoccupation for us at the moment. Richard may want to talk a bit about the housing side. On the planning specifics, the sorts of issues which are dealt with in this Report, there has of course been a substantial reduction in the number of planning applications going into local authorities. Many of them are expecting that they will slim down their services to match that demand. The new fees regime has helped a bit there but nevertheless authorities are facing shortfalls of an income which is built into their budget. The upside of this is that it is allowing a bit of space in planning departments to do two things: firstly, to do some of this systems work, to be sure they have a very eYcient system. Also, and we have talked about this with you before, to work on local development frameworks. There are many local authorities who

have more work to do to get their plans in the right place. There is some crossover of skills, not complete but some crossover of skills which will allow some authorities to move into that area. There certainly is a dip in work in the planning sector, as you might imagine. Mr McCarthy: The housing market conditions are extremely challenging, as you will know in this Committee. As a consequence, again as you will know, we have made it very clear and Mrs Beckett has made it clear that our targets are extremely challenging. The most important target of all is getting up our net supply of new homes to 240,000 new homes by 2016 and that target remains in place. We had achieved 200,000 homes a year by 2007–08, so we were getting more homes through the planning system and they were being built. The fact is that those numbers are going to be lower this year and next; that is a reality. We are doing everything we can to focus our eVorts. Q12 Chairman: Do you have a figure for that? Mr McCarthy: The figure for last year, 2008, will probably be between 140,000 and 160,000; we have to wait for those to be confirmed. We do not have a figure for the current year. What matters is that we do everything we can to stabilise market conditions, that our interventions maintain supply where we can across 10 years and that across Government we tackle the issues of credit supply, the availability of mortgages to ensure that we can continue the flow of housing to meet our unabated household growth. Households are growing at 223,000 households a year; that is the latest data we have from the ONS. The reality is that we may be constraining people’s housing ambitions quite significantly during this diYcult period but the households are still growing and we need to meet that housing need for social and economic reasons. Q13 Keith Hill: I ought to begin by making a declaration of interest since I happen to have been the Housing and Planning Minister of the nation from 13 June 2003 until 7 May 2005; in other words, it occurs to me that I ought to be sitting at that table there. I want to start by asking about the target regime. My recollection is that when we brought in these targets and indeed when we brought in the planning delivery grant two things were happening: first of all there had been, in the years before 2003, a huge growth in planning applications, mainly householder applications, which were threatening to submerge many local planning authorities. At the same time, the length of time taken in dealing with major housing applications was the object of huge complaint by house builders and developers and the 13-week target was a response to those criticisms. Am I right about the context of this? Mr Housden: Yes, that is correct. Q14 Keith Hill: Would you not say that the doubling of the percentage of decisions taken within 13 weeks has been on the whole a worthwhile achievement?

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Mr Housden: It is easy to say yes to that; I genuinely do actually. What we saw from the evaluations which were commissioned of the work was that this was not simply about disposing of applications quickly; they were also being disposed of well and the planning delivery grant the Chairman referred to was actually being used to invest in serious improvements in capacity. One of the bits we need to pick up here is that departments were actually very short of planners, were they not? There was an overall shortage of planners, many of those did not have the requisite skills, the Antipodean brigades, and also the work showed that the planning and organisation within those departments, just the simple processing of those applications, was nothing like as good as it could be. We looked at the best authorities and sought to spread their practice and expertise around the place and surprisingly often found it was a question of leadership, the way a council believed that planning was an important public service, important to the economy, put some impetus behind it and all the rest flowed. We saw the way the grant addressed all those things and we used that lead indicator about major residential applications with the 13 weeks not as saying this is all that matters but that it was a good proxy for a council that did well. Q15 Keith Hill: There is no doubt that, given the complexity of many of those major housing applications, a doubling from 30% to 60% in terms of 13 weeks reflects extraordinarily creditably on local planning authorities and also on the eVectiveness of the incentive provided by the planning delivery grant. In terms of whether it is a rejection or an acceptance within the 13 weeks, would I not be right also in recalling that it was a contention of developers and house builders that they would prefer to get a refusal within a timely period rather than have to be uncertain over a much longer period? Mr Housden: Essentially that is right and the planning performance agreements go to that question about certainty. If you are a developer bringing a complex proposal to a local authority, you accept that fact that it is going to need to be examined carefully and this will take time. You do want to know how long and through what stages you have to go. We are seeing this as those agreements become prevalent. Q16 Keith Hill: If there is an implication, which I think there is in the NAO Report, that local planning authorities have been tempted to reject an application simply to meet the deadline, am I not right in thinking that we inserted into planning delivery grant a disincentive which penalised local planning authorities who actually proved to have a poor performance in dealing with appeals? Do you not remember that? Mr Quartermain: That is correct. There was an abatement in the planning delivery grant that, if it was felt that authorities were refusing things or indeed having applications withdrawn so they could be resubmitted to meet the timetable, it was a matter

which was considered and I believe the figure was a 10% abatement in terms of the planning delivery grant. We can check that.1 Q17 Keith Hill: I think that is right. In other words, the performance measure does take account of the quality of the decision contrary to the assertion made in the NAO Report. Mr Quartermain: Your earlier comment about developers rather getting approval over a longer period than a refusal in eight weeks or 13 weeks is valid and that is the case now. One of the things we have been trying to do is encourage the planning performance agreements, which will enable the timing of the application to be agreed. We have also been trying to encourage pre-application discussion to get the application to be the best it can be and that is an issue which you need to bear in mind. The planning process has two players: there is the planning authority in this and then there is the applicant. If the applicant delivers a first-class application, they can expect it to be determined in accordance with timetables. If the applicant delivers a poor application, then they cannot be surprised if it takes longer to deal with. One of the things we have been trying to do is to encourage the quality of the application in the first place and a lot of work has been done on that. Keith Hill: That is an extremely important observation. I have my views on the quality of some house builders and developers but I had better not go into those here. Chairman: Please do. Q18 Keith Hill: I do not think so on the whole. Let me ask you the obvious question. All of this, both the target and PDG, was designed to increase the number of housing starts. Did it have that eVect? I warn you that is one of those questions you get as a minister in oral questions when you know the other side knows the answer. What is the answer? Mr McCarthy: The answer is that during the period of planning delivery grant we saw a very significant and high rate of housing growth both in starts and completions. It would be inappropriate to say that was purely down to changes in the planning system and clearly market conditions and the availability of mortgage finance contributed to that. We would have constrained that supply if the system had not improved, so it is a reasonable assertion to make that our improvements in the planning system have enabled and assisted that rate of housing growth. Q19 Keith Hill: That is a very fair way to put it; you cannot really say it is entirely down to 13 weeks, you cannot say it is entirely down to the enhanced performance of the planning authorities. However, the fact is that we started with 150,000 housing starts in England in the year before this programme began and after three years we were up to 184,000. Actually it certainly did not prevent an improvement in performance. May I now turn to Part 3 of the Report which deals with the impact of the initiatives and 1

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first of all to the releasing of the extra funding, the planning delivery grant? In paragraph 3.3 the NAO observes that while the Department reckoned that 95% of PDG was spent on planning “The extent to which this funding resulted in extra expenditure on planning is unclear”. Is there any reason to believe that councils did cut spending on planning as a result of PDG? Mr Quartermain: Some survey work was done by consultants who looked at the expenditure of PDG by planning departments and the result of that research was very encouraging. I think it was 97% of PDG, but I can confirm that, was actually spent on the planning service.2

Mr Housden: We use it as an umbrella term to cover from one end socially rented housing, council or housing association—

Q20 Keith Hill: The NAO observes that the Department did not investigate whether there were cuts in other sources of funding in planning departments but the Department had no reason at all to believe that those cuts were taking place and therefore there was no reason to carry out such investigations. Mr Quartermain: There is always a question to be asked about whether, in setting finances in local government, they adjust budgets to accord with unexpected income and whether less money goes in from core budgets. There is no evidence of that, in fact one of the issues which arose from planning delivery grant was not so much that budgets were cut and services were expanded on the basis of PDG and local authorities really needed to think about exit strategies because PDG was never a long-term contribution, it was always going to be a fixed-term issue and local authorities needed to think in the long term about how they were going to carry this forward.

Q25 Mr Mitchell: It is not whether support is available, it is what the price of the house is when it is sold, is it not, that makes it aVordable? Mr Housden: We use the term to describe a basket of policies that we have. “AVordable” can also have the meaning you described.

Q21 Keith Hill: Nevertheless, in its time it was regarded by planning authorities as the best thing since sliced bread and it did lead to very serious quantitative and qualitative improvements in local planning performance by and large. Mr Housden: Your point is borne out by the survey in 2008 which is in Appendix 5 paragraph 4 “Respondents rated Planning Delivery Grant extremely highly in terms of its eVectiveness in helping to improve development management, with 83% rating it as eVective or very eVective”. It is also true that over this period the overall funding which was available to local authorities across the whole range of its functions was rising. This was not simply an oasis in a desert. You saw authorities investing in these services and moving forward in the way you describe. Chairman: Thank you for your personal knowledge. We should thank you on behalf of Austin Mitchell and David Curry for taking them on a visit last week. Thank you for organising that; we are very grateful. Q22 Mr Mitchell: How do you define aVordable houses? It is used in so many contexts but what does it mean? 2

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Q23 Mr Mitchell: That is the rental sector. Mr Housden: That is at one end. It goes right through to the range of opportunities which is available for people who want to buy a house with support. Q24 Mr Mitchell: That is the price presumably. Mr Housden: Yes, there is a range of support available to first-time buyers, key workers and so forth to get them into the market.

Q26 Mr Mitchell: What is aVordable in London is a palace in Grimsby. Mr Housden: One of the big things which drove the Government’s drive on housing was that those ratios of aVordability are getting worse and worse so people, not just in the south east, were finding that house prices were getting further and further away from average incomes. So the planning reforms were part of a suite of measures the Government put in place to try to arrest that rise in ratios. Q27 Mr Mitchell: Is there not a restriction? Say a house is built at what you deem an aVordable price. Who buys it? Can I as a parliamentary millionaire step in and buy aVordable houses in London. Mr McCarthy: Sadly not. We impose serious restrictions. There are income limits; it also has to be your principal home. The aVordable housing fundamentally is defined through where the stake provides some form of subsidy, be it cash or delivered through the planning system or both and where we do that we set out rules to ensure that housing reaches those who are unable to compete in the market. Q28 Mr Mitchell: They can buy it and sell it on or somebody for whom it is aVordable can buy it and sell it on. Mr McCarthy: If someone wants to buy a home in which they have an equity share, they cannot have an income above £60,000, they cannot choose to whom they sell their equity share, they can either staircase out and buy the home and recycle the money back into the housing association which can then produce more aVordable housing or they have to agree to sell to someone who is eligible for the scheme, who has been assessed by the local housing association. Q29 Mr Mitchell: I am glad to hear that. The period defined in which a planning decision must be taken looks to be vitiated by the fact that it takes so long before and after the planning decision. I see from paragraph 2.8 that it takes 30 weeks beforehand and

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35 weeks afterwards. Have those periods grown longer as you have tried to tighten the period of decision making? Mr McCarthy: Unfortunately those periods will vary significantly, in part due to market conditions. The period post-planning approval and someone going on site is going to be more conditioned by market conditions and access to building contractors than it is going to be to do with anything the planning system works. In the period beforehand, if anything, there is some pressure which has extended that time period; the world is a more complex place now and that is why we are encouraging developers to have informal preplanning discussions with our local planning authority and it is why we are asking planning authorities to improve and to speed up their delivery of local plans. Ultimately everybody wants a sense of certainty in the planning system. The more you know that you can oVer a planning scheme for approval, one that will meet local community needs, that the authority will accept, the quicker it will go through. Q30 Mr Mitchell: Yes, but I have had builders complain to me—not many—that the haggling in this period is getting tougher and longer as the local authority tries to impose more conditions. Would that be the case? Mr McCarthy: We have seen a period, as values have risen, where authorities’ demands through planning applications have grown. One of the things you may be aware of is that in the 2008 Planning Act we have now legislated for the new community infrastructure levy (CIL) and that is to try to get authorities to be much clearer and much more certain about the contributions individual developers make for their development towards wider infrastructure needs in their locality. Where people do adopt to go into a regime with CIL, then their planning obligations will be more tightly defined. We are trying to create more sense of certainty; we are trying to ensure that everybody understands the cost of development and that those costs are proportionate and fair. Q31 Mr Mitchell: Now they complain, for instance, that the proportion of houses which must be aVordable in a development has been edged up to the point where it makes the whole development less profitable and therefore they cannot get the money from the banks. Mr McCarthy: We are aware of that complaint. Q32 Mr Mitchell: Are you aware of that fact? There are always complaints from the building industry but what is the reality? Mr McCarthy: The reality is that through local planning authorities we achieve high levels but variable levels of aVordable housing on housing developments right across the country. There is no doubt that some very high levels have been achieved in certain parts of the country. Q33 Mr Mitchell: Is there evidence of it stopping developments?

Mr McCarthy: Certainly there are some developers who have argued that to be the case and in some appeals we have seen some levels of aVordable housing reduced. What you have to be very careful about in answering this sort of question is to recognise the importance of local circumstances. We provide broad planning guidance and it is down to the local planning authority to set what it considers reasonable limits, to be able to evidence why those are there and to bear in mind viability. One of the things we have to do is to advise our inspectors to consider viability as well as need when assessing individual appeals. I am afraid then you are down to the individuals. Q34 Mr Mitchell: It is up to the local authority to decide what it can get away with. Mr McCarthy: No, it must do a needs assessment; it must be clear what its needs are and it must then apply those to the planning system. Q35 Mr Mitchell: The needs of the area. Mr McCarthy: The needs of the area. It must then apply them in a way which does not undermine viability. Q36 Mr Mitchell: I see it is 35 weeks on average after the decision. Is that period getting longer? Builders can walk away from a development, can they not? Having got planning permission they can do nothing. That must now be more common, given the financial diYculties the building industry is in. Mr McCarthy: Yes, it is entirely reasonable to assume that period is currently getting longer. That is just a fact of the world with which we are now faced. House builders are not starting schemes with planning approval because they do not see the demand there or a demand that people can exercise because of the constraints which exist. Q37 Mr Mitchell: Can you give us some figures on it? Mr McCarthy: We can provide you with some data about the total number of planning approvals which exist and I think we do have some evidence to show that number is growing. We will happily provide that back to the Committee.3 Q38 Mr Mitchell: I get the impression that planning departments are understaVed. Is the problem that we have not trained enough or is the problem how much they are being paid? Mr McCarthy: There has been a problem about staYng levels, particularly in the past. We are making some real improvements about staYng levels but those need to be balanced by the right skills. Steve may want to say something about this as our Chief Planner but we have been investing in bursaries to improve the number of qualified planners. It is very important that a planning department is really clear when a qualified planner is required and when assistance can enable minor applications to be prepared for consideration by committee or by more senior oYcers. 3

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Q39 Mr Mitchell: David Curry raised an interesting point when we went round the housing development last week which I could confirm personally because my sister-in-law—a loud-mouthed Australian— worked in one of the London planning departments. It seemed that the number of itinerant Antipodeans, who provided a lot of planners for local departments, has been drastically reduced because they have been sent back home after two years. Mr McCarthy: The reason they are reducing is because we are training more planners. There was a period around the turn of the century when— Q40 Mr Mitchell: If departments are understaVed you can employ both. Mr McCarthy: I was referring to the last century, so I am only going back eight years, when we found planning schools were closing and they were not full. Our planning schools are now full; we know there is some pressure to increase the number of people who are trained to become planners. It is a little bit like the GP issue that actually it takes a number of years to train a planner. What we now see is more trained planners coming through the system and that is very encouraging news but we need more of them. Mr Quartermain: The only thing to reiterate is the fact that you do need to have the right skills. The capacity has started to be addressed. You are absolutely right that there was a time when up to 30% of planners in London were from foreign parts. That has been addressed. I think on the site you went to the chief planner was talking about the fact that they have grown their own, they have brought people in and there are now far less people on temporary contracts. Q41 Mr Mitchell: I should add, just in case she reads this, that my sister-in-law is a very good planner. When you have statutory authorities like the Environment Agency involved why do they not get feedback in all the cases? If they say there is a problem here of flooding, they need to know what has happened afterwards. Why do they not get feedback? Mr McCarthy: There are variable levels of feedback. We are going to be talking to all the statutory consultees about improving their knowledge and the feedback that we provide through the system, assessing their own value and input. I would add one other thing. Through the planning portal we are also looking to develop an eHub because we want to consult with our statutory consultees using electronic means to speed up the time in which they can get their responses back into the planning system and try to head oV some of those complaints you may have heard from some developers and authorities who fear that the response from statutory consultees can come in rather late. Q42 Mr Curry: Most of our constituents come to see us in order to stop developments, if you have development control. Local authorities talk about development control and business is terribly keen on the development and constituents are usually terribly keen on control. They may well be in favour

of the development in principle, but usually not where it is intended, which happens to be quite close to where they live. So most of the pressure is actually anti development in the UK rather than pro development. You mentioned pre-development discussion. At what stage does that process become a chargeable process as far as a local authority is concerned? Is this a disincentive? Mr Quartermain: It is entirely for the local authority to decide which discussions it wants to charge for and when it will trigger it. Very often you will find those authorities which are charging for preapplication discussions do not charge for householder applications, for example, but will charge for major applications. That is usually set out in a schedule. Q43 Mr Curry: The reason I ask the question is because of a personal experience where I wanted to see what I could do with a barn which would be acceptable and asked Uttlesford District Council if they would have a look. They were going to charge about £350; a huge disincentive to try to lubricate that process. Local authorities at the moment are extraordinarily cash strapped and they are going to remain even more cash strapped because a lot of the particular revenues are declining because of the recession but the temptation will be to whack up the fees. That actually militates against the easy process you want, does it not? Mr Quartermain: Yes. That is why some authorities have not charged at all or charged on diVerential scales because they do not want it to be a disincentive. What they are trying to achieve is that quality of application. In terms of cost up front, if you can get an application through the system in time and be on site quicker, then that money you pay upfront is money well spent. You are absolutely right: you do not want charging to be a disincentive to the application. Q44 Mr Curry: Can we look at the statutory consultees? You could have quite a complex development. You could have a complex development with about half a dozen statutory consultees. The obvious ones are Highways, Environment Agency, English Heritage, if that is relevant, but there are some smaller ones as well. You then add to that a 106 agreement and, coming in down below, the community infrastructure levy. The two would go side by side because 106 delivers the social housing; 106 delivers more than half the social housing in this country; we do not build many houses without 106s. It is actually quite a big ask to do all that in 13 weeks. If we look at the performance of the statutory consultees on page 36 it does diVer really quite sharply, does it not, between the main ones there? You would expect the Highways Agency probably to be engaged in the most consultations, would you not, I guess? Is that because of the volume of their consultations? The disparity in performance is really quite significant there is it not?

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Mr McCarthy: It would be influenced by volume; it would also be influenced by regional distribution and complexity and Killian and Pretty made this clear. We are interested in finding ways of speeding up that process. Q45 Mr Curry: One focuses on the local authority but one does need to get the best performance out of the consultation processes which are statutory processes as well. We need to look upstream as it were as well. Mr McCarthy: I agree. First of all, in response to Killian and Pretty we are looking—and we will say more about this in the formal response—at the extent to which statutory consultees need to be consulted as much as they are. Secondly, I talked about the e.Hub; it is all paper based at the moment and that does slow down the process. We want to see how we can sharpen up the process to ensure that what you get back gives you a greater sense of certainty. We need to see how we can sometimes involve major statutory consultees in the preapplication discussions. For example, if you think it is appropriate to build on an area of flood plain, it might be more sensible to engage with the Environment Agency early on rather than wait for their response at a later date. Q46 Mr Curry: You mentioned the importance of the availability of mortgage finance. My constituency has the Skipton Building Society, which is one of the big boys and has just taken over the Scarborough one I think. The mutuals are very brassed oV. Having contributed nothing to the crisis, they are now in the position of being levied to help solve it. Those levies mean there will be less money to spend on mortgages. It does not make sense, does it, to levy the mutuals, who are innocent, with the consequence that they will therefore be able to spend less money on mortgages to people when we are desperate to improve mortgage availability? I am sorry it is a political question. Mr McCarthy: It is both political and Treasury based so it really would be inappropriate for this Department to comment on that aspect of fiscal policy and the extent to which costs are borne by the financial sector in response to the assistance given to banks. What I can say is that we are engaged, we are kept informed and we work with Treasury colleagues and will continue to work with them on the development of proposals and ideas to free up mortgage finance. Without getting into a long discourse about that matter, it is extraordinarily challenging out there and, as you will be aware, access to wholesale funds to support the mortgage market has completely dried up. Q47 Mr Curry: Yes, they have disappeared completely because they are provided largely by foreign institutions. I just leave that on the table. It does seem not to make sense and you can quantify the impact of that in terms of the bottom line of the building societies and hence the amount of money which they may wish to put into the marketplace. At some stage we will be out of the recession, one hopes,

and you said planning departments have probably been scaled down because of the reduced demand and local authorities are under a pretty heavy cash problem, so the tendency will be to try to slim down their bureaucracies. What assurances do we have that when things start to pick up we do not fall straight back into the problem we had before of lack of capacity, particularly in planning departments? Mr Housden: This is a very important preoccupation of ours at the moment right across the board and planning is but one element. The actual industry and its supply chain concern us equally. On the specifics of the planning question, we are looking now. It is fairly early days. There have been several instances. We are dealing here with anecdote and conversation rather than any firm data. We do know that the number of applications has gone down and you can predict that authorities will want to keep an appropriate balance between the number of planners and their capacity and the number of applications they are dealing with. It is a bit early to say but we are watching carefully and we have a range of possibilities around this and we are examining how you can preserve capacity and maintain that. Mr McCarthy: We are asking local planning authorities to take the opportunity of reduced development control activity to get their local development plans completed and to ensure that their processes are as clear as they can be. Q48 Mr Curry: You want them to give their departments an MOT. Mr McCarthy: There is a good opportunity to shake down and make sure they are ready to come out stronger when the applications come back in and that is our mantra across the piece. Q49 Mr Curry: Mr Quartermain must be an optimist because he supports Norwich City. We have a community infrastructure levy which has come in and the obvious application of this is CrossRail. That is a levy which by definition may well apply across local authority boundaries. Using 106s can be quite a complicated business. What are we doing to try to make sure, when we are talking about infrastructure levies, where the infrastructure may be needed in a diVerent local authority or diVerent county to where the development is to take place, that does not act as a brake on the development processes? Mr McCarthy: We are at the very early stages of CIL and we are currently developing for consultation in the autumn the regulations around CIL. What we are concerned to do is ensure that regulations permit local planning authorities to work across boundaries where that is appropriate and that we provide planning authorities with guidance, both written but also through the planning advisory service and through seminars and other assistance that we can provide. The purpose of introducing CIL is to try to give the landowner, the developer, the local planning authority, a greater sense of certainty. What developers want to know is how much it is going to cost in regulatory impacts when they buy a site and

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develop it for whatever they want to develop it for. The greater the sense of certainty, the greater the opportunity for the land price to reflect at least part of that cost. As you will be aware, we have debated this for many years, we have explored a number of options and with the benefit of strong stakeholder input from business and from local planning authorities and from the RTPI, we have coalesced around the introduction of CIL. I hope that you will see—and I suspect you will have us back to talk about this at some point in the future—that we develop a system which is user friendly, does not choke oV supply that actually allows you to set a fair level, remembering that viability test, and to give that greater sense of certainty as well as clear contributions to local infrastructure. Q50 Mr Curry: We look to see that with interest because we presumably have some war games being played on CrossRail, in every sense of the word I suspect. Can we just look at outline planning permission? Three years is a guideline period on outline. It is an awfully long time in the present economic circumstances. Would it be a good idea to bring that in a bit? Mr McCarthy: I have to say that developers tell us completely the opposite. The pressure from the industry is for us to extend that because it is diYcult for developers across all forms of development to proceed with schemes they had intended to proceed with at the present time. We are looking at what guidance and what our response to that might be but what I can tell you is that authorities do already have the freedom locally to extend where that is appropriate. What I can tell you is that you are certainly the first person—Steve may be able to confirm this—who has talked about reducing the time rather than extending it. People will not build against market forces. Q51 Mr Curry: The purpose of the question is that it is diYcult to see why there should be a standard period, if you have emphasised all the time that you just look at local circumstances. Would it not make sense, within a wider limit, to allow local authorities to decide what would be a sensible ask for the development to take place? Mr Quartermain: They can now; they can set the time limit they think appropriate. For any application, if they wanted to set a longer period, say five years, they could do so. If they felt it was imperative to set a one-year target, they could. The issue for us at the moment is to look at those applications which already have permission and certainly we are being asked to look at whether or not those cannot be extended. Q52 Mr Curry: Maybe we can all finish with a huge sigh of relief that the lunatic planning gain levy never came into existence. I wish you would repeal the legislation which allows a possibility of having life blown back into it. Mr McCarthy: Our answer is that we have legislated with CIL.

Mr Curry: But you have not de-legislated for planning gain. Q53 Mr Touhig: The proportion of major residential applications decided within 13 weeks has doubled to 67% in 2007–08. Progress, but is it not really a fig leaf because it is not telling the whole story? A number of my colleagues have already touched on the issue of the pre-planning-application stage. I think the C&AG’s Report tells us 30 weeks. Why is it taking so long to deal with the pre-planning-application stage? Mr Housden: Your first point is important. The target is based upon the development stage controlled by the local authority; that is a real progress improvement. The pre-application stage basically, in the jargon, is developer led. It will be driven by the interests, concerns, ambitions, appetite of the developer. Q54 Mr Touhig: What evidence do you have that it is developer led and not obstruction from the planning authority? Mr Housden: In the sense that it is the developer who brings the proposition to the table and will be exploring with the local authority the likelihood of a particular application being successful, how it fits with local development frameworks and so on. The strength of your point is that we, through preapplication agreements, have been trying to put some more rigour and shape to that process and to encourage the planning authority to say to a developer “Yes, in the light of the shape of the application you are thinking about we think we can process it in this timescale and in this way. That is something which the Comptroller and Auditor General’s Report commends as a good way of working and shares our ambition to see that used more comprehensively. Q55 Mr Touhig: What do you know about some of the problems developers are having with planning authorities where planning authority oYcers were not engaged or they were not given an early indication or it was diYcult to fix up a meeting or get any guidance at all about the likely success of an application? Mr Quartermain: Yes, anecdotally you do hear those worries and sometimes people produce the evidence. It is interesting that in the example you visited earlier in Stockwell the planning agreement there, which was between the developer and the planning department, actually agreed a period of eight months for the pre-application discussion. That was what they agreed; between them they said it was going to take eight months to get the application in. When you talk about the period before the planning decision starts it always seems to be “Is that a problem in the planning department?”. The point is no, if you sit down and talk to the developer and the planning department about how long it takes to get the application to a stage where it is ready, they are saying it is eight months and there is that evidence.

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Q56 Mr Touhig: Surely all these targets are about trying to reduce the timeframe in order that we can get houses built and you say you have anecdotal evidence but have you not investigated this? Do you not have a proactive policy to try to reduce this huge time span prior to the application being formally submitted? Mr Quartermain: My point was that even when you look at the time period which is agreed between developers and planning authorities it can be as long as eight months. What we are trying to do through the planning performance agreements is to put more rigour into the performance management of the system to ensure that timetable is not only robustly evaluated to start oV with but is also challengingly delivered so that if you have milestones you need to meet them. Q57 Mr Touhig: If no pressure is put on local authorities or planning departments you are not going to speed this up at all. I have plenty of evidence in my area where it is diYcult for developers to engage with the planners who just do not seem to be interested or prepared to at certain stages. I am not saying they are not interested but they will not have meetings on this, will not discuss that and the whole thing goes on and on for ever. Mr Housden: The whole purpose of this regime was to tackle those types of issues. In some cases it was just poor organisation that was preventing these things being done properly or a shortage of planners and the delivery grant enabled authorities to tackle those issues, but there was also, in our jargon, a failure regime. So we called them standards authorities and where people had a consistently poor record in processing applications appropriately, then that was made visible in the local authority world, it was known that those authorities were receiving support and in a structured way they were helped to improve their performance. It was a rounded type of process. One thing about the speed that the Lambeth visit brought out for me was they had had outline permission there and yes, it did take quite considerable time for them to bring forward detailed proposals because they were consulting with a large number of residents in a very crowded area. Q58 Mr Touhig: I entirely accept that. Mr Housden: That seems to me to be a good reason for taking due time. Q59 Mr Touhig: Yes, that makes sense. The point is that I think your 13 weeks are just a bit of fiction. If you have endless time before it actually gets to the planning submission stage, then you are not going to reduce the waiting times to get planning consents. I am sure you have attended many planning meetings; I have when I was a councillor. I remember on one occasion a planning application being turned down and the members could not think of a reason so they asked the oYcers to invent one. On another occasion a planning application was turned down because the leader of the council said the applicant’s eyes were too close together and a man like that could not be

trusted. That is after the pre-planning stage. Really it ought to be a major target to try to reduce that time down. Mr McCarthy: I did mention earlier but just to remind the Committee, if I may, that we are doing more about the pre-planning-application process because we are looking at issuing more certainty with greater guidance; we are speaking at a regional event with the planning advisory service to inform local planning authorities of the benefits they can get as well as developers and communities from good pre-application discussion. You have a better chance to get a better scheme which can be more clearly delivered in a faster timescale through investment of time and resource in a pre-planning process. You get yourself into great diYculty if you start to set dates because you will have schemes which require no extensive pre-application process, but we do want to give greater guidance and greater certainty. We have more work to do here and we are doing that. Q60 Mr Touhig: Is the whole system not too rigid in a sense? I have a major employer in my constituency, an American/Canadian now British company, and they tell me stories of when they had developments in the States and how much easier it was and how the authorities cooperated much more rapidly on making decisions. Are we just too bureaucratic about it? Mr McCarthy: I do not think so. I think this country should be proud of its town and country planning system. It is there both to facilitate development but to ensure development fit in the local environment and to meet needs in a country which has significantly less land than somewhere like the United States. We have much to be proud of but we also must never be complacent. We are looking for ways to improve certainty, speed, eYciency and proportionality within the planning system without cutting out the community voice in that process. We are making real progress, we are accepted here, we know that we have further to go but we are building on some real evidence as this Report demonstrates of some real progress. Q61 Mr Touhig: The Chairman made the point earlier on and Table 4 on page 14 shows the total process pre, then determination then post to be 98 weeks. I would guess local authorities have very little control over the post; the developer has planning consent and when he or she goes ahead with it within certain timeframes does not matter to them. Am I right in saying that there is very little you can do with the post-planning period but there are things you could do? Mr Quartermain: We can do some things. For example, we can look at the way local authorities discharge conditions and ensure that they deal with those quickly and do not sit on them. There is a temptation that once planning applications have been determined they are on to the next one. When someone then comes back to discharge a condition or to seek compliance it does not get the priority it

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deserves. You hear that story. We need to make sure that is not the case, that conditions are not discharged quickly. That is one thing we can look at. Q62 Mr Touhig: The Chairman talked earlier about this whole period and he also referred to the Killian Pretty Review. The recommendation there is for a new performance indicator based on satisfaction. You are looking at that. I was not quite clear when you expected to have an announcement on it. If you did go down that line, does that mean the 13 weeks and all that would go and you would have a satisfaction indicator as a method of trying to accelerate the planning process? Mr McCarthy: It would be inappropriate to tell you what ministers have yet to decide. Mr Touhig: Do not worry, I do not mind. Chairman: Just among ourselves give us your advice to ministers. I know you love doing that sort of thing. Q63 Mr Touhig: We promise to keep it between us in this room. Mr McCarthy: That is very kind of you. However, what I will tell you is that I hope ministers will be in a position to issue their response to Killian and Pretty at the very latest by early spring. What we have to look carefully at is the balancing of satisfaction with the benefits you get from clarity about dates and times and the ability that has to focus people on getting the job done. Those are the issues we continue to look at in our work on the Killian Pretty Review. Q64 Mr Touhig: If that were to be implemented, would you abandon the 13-week targets? Mr McCarthy: Not necessarily. I will say that much: not necessarily. Q65 Mr Bacon: You tempt me to start with what I was going to finish with, that is Mr McCarthy’s comment about how much you have to be proud of but I shall not stray into those waters yet even though I wish to. I should like to ask specifically about statutory consultees. I have had long discussions with my own local authority, specifically the environmental health people rather than the planners, about water. I met with them and the chairman of the Environment Select Committee here about this subject some years ago. They are repeatedly coming to me with the point that because water undertakers are not statutory consultees, although the local authority might have an obligation on it to consult them, the water undertakers do not have an obligation to respond and therefore often they do not respond. The result is that people might assume that there is not an issue or a problem when in fact there is. The environmental health people are in constant arguments with planners where they say “You mustn’t build here; you mustn’t give permission to do this because it will flood”. The planners turn round and say they do not have any evidence that it will flood. Why? Because the water undertakers did not respond. Why did they not respond? Because

they were not obliged to respond because they are not statutory consultees. I think I am right in saying that if they were, like the four main national ones referred to in the Report, they would respond. At least if they did not respond within the 21-day threshold there are sanctions which can be taken. Is it likely that the changes which are afoot in this new guidance will include consideration of water undertakers and possibly making them statutory consultees? Mr McCarthy: We will look at that as part of the process of statutory consultees, although I have to say that the pressures are not to extend the process. Q66 Mr Bacon: I understand that. Mr McCarthy: You illustrate the point with flooding. Advice on flooding is received from the Environment Agency. Q67 Mr Bacon: Yes; I shall come on to them in a minute. Mr McCarthy: You will be aware of their advice. I hope you will be aware that we significantly strengthened planning policy through planning policy statement 25 on flooding and introduced a flooding direction to ensure that the Environment Agency had a very powerful input to the planning system and to ensure that where we do need to provide for development on the flood plain, it is in the areas of least risk and it is appropriately designed. I have to say that I am not aware that the Department or departmental ministers have come under any pressure to extend statutory consultees to other water providers and authorities beyond the Environment Agency, certainly in the context of planning. Q68 Mr Bacon: The Environment Agency is not a water undertaker, is it? Mr McCarthy: But it deals with the issue of flooding. Its responsibilities are about flooding. Q69 Mr Bacon: Yes, of course its responsibilities are about flooding, but the people who know about water, and water is what causes flooding, are water companies surely? Are they not or have I missed something here? Mr McCarthy: Theirs is not a concern about flooding. The issue for water companies will tend to be about the provision of water supply to new homes and new developments which are provided. Q70 Mr Bacon: Actually it is not just, it is also surface water drainage into their sewers. Mr McCarthy: It is down to the local planning authority to consider ways of managing surplus water. You will be aware of the increasing application of something called SUDS, which is sustainable urban drainage systems, where we try to ensure and we use the planning system to ensure, that surplus water which drains into the mains drainage system is limited in its scale. That already rests within the planning system and rests with local

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planning authorities. I am happy to say that we will, in our work on statutory consultees, take away your point and review that. Q71 Mr Bacon: Ofwat did a letter recently to regulatory directors of all water and sewerage companies and indeed water-only companies on the external review of the sewer flooding risk registers. They ask the consultees what a definition of a sewer flooding should include and what it should exclude. The question was “To ensure that investment is focused on flooding that sewerage companies are clearly responsible for, how should the boundaries between sewerage company responsibilities and those of other stakeholders be addressed to define sewer flooding more clearly?”. They asked this question of water companies but they did not ask it of local authorities. My local authority found out about this consultation by accident and the environmental health people at my local authority asked their own professional body, the Chartered Institute of Environmental Health, and they did not even know the consultation was taking place. Very important people in the system are not being told what is going on. Mr McCarthy: We would find that regrettable as well. I cannot say that I am aware of that consultation either. Q72 Mr Bacon: Can I carry on with you about the Environment Agency? I have a constituency case involving a lady who lives in a house which sadly has flooded. It is basically ruined because of the backfill of sewage. When it was built a neighbour, who lived not in the house next door but a long way away because she had a long garden, and the equivalent spot would have been at the end of her garden but next door, said “No, no, no; don’t build here, it will flood”. She was dismissed as a NIMBY, although she was not. She said “Pity the poor person who buys that house, it will flood”. It got built and it has flooded. The water company gave their permission; that is to say they signed oV and said it was okay to build there and so did the Environment Agency. The planners said “In these circumstances, the Environment Agency having signed oV that it is okay to build here, we, the planners, have no good ground to refuse this application because if we did we know we would lose on appeal even though the Environment Agency’s assessment as to whether this spot would flood or not was not based, like the lady next door, indeed any of the neighbours who could have told them, on local knowledge, it was based on a desktop exercise from an oYce 50 or 100 miles away. I have stood in this garden with this lady watching her facing somebody from the Environment Agency, somebody from the water company and somebody from the planners as the discussion went between them backwards and forwards and she was looking backwards and forwards like somebody watching a tennis match. She just burst into tears in the end because every time it rains her house, in her words, is a bowl of sewage. The Environment Agency have this planning trump card at the moment. The moment they tick it oV and

say it is okay, there is nothing the local planner can do to prevent building going on there even though it ought to have been prevented. Mr McCarthy: It sounds like a very diYcult case and not to take anything away from it— Q73 Mr Bacon: I am not highlighting it because it is a constituency case but because it illustrates a generic problem. Mr McCarthy: The only thing I can say to you, in the context of that illustration, is that the local planning authority is the ultimate arbiter. It decides whether it considers a development is appropriate or not. Q74 Mr Bacon: It also knows when it will lose on appeal. Mr McCarthy: It makes its own judgments about that. It considers and must take into account responses from statutory consultees. Finally, it must decide itself whether that development is appropriate or not. Mr Quartermain: The story you describe is not unfamiliar to me. The question is whose water is it? People are tending to say it is the water authority, the Environment Agency or indeed the internal drainage board. Seeking statutory consultees’ advice you do tend to rely on it. What is the point of consulting them if you are not going to listen to what they tell you. I have to say, again anecdotally, I have had examples where if people live in a street which is called Water End they might expect that there might be some flooding. It is our responsibility to try to make sure that if a new development is proposed we take account of the advice we get and if we think there is going to be flooding, we can refuse it. You are quite right that local planning authorities tend to rely on the external advice they have on this matter and if the Environment Agency or the water authority say there is no risk then they will seek to approve it. That does not mean to say that the local authority cannot put conditions on which would seek to mitigate the risk. Q75 Mr Bacon: In my experience, when they do put conditions on builders sometimes ignore them and then they do not do any enforcement. But that is another issue. Can somebody tell me how many people are homeless in this country? It used to be 400,000 but I think it is lower now. Do you know the number oV the top of your head? Mr McCarthy: No. Q76 Mr Bacon: Does anybody? Rather than saying no, does anybody know? Mr McCarthy: I cannot do it oV the top of my head but I can happily tell you that the latest quarterly figures show the statutory homelessness acceptances have continued to fall as they have done for at least the last two if not three years. It is down to about 20,000 to 25,000 homelessness acceptances each quarter.

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Q77 Mr Bacon: I am not interested in that, I just want a global figure. It used to be 400,000. What is it now roughly? Does anybody know? Does anybody know? Mr McCarthy: The number of people who are— Q78 Mr Bacon: The answer is yes, you know or no, you do not know. I am sorry to be impolite but I have very little time left. I just want to know how many people are homeless. You are the Director General Housing. Do you know how many people in England are homeless? Yes, you know, no, you do not know. Mr McCarthy: I am trying to do my best to answer your question. Q79 Mr Bacon: It is a number. Mr McCarthy: I will now interpret that as the number of people who have been accepted as homeless who are in temporary accommodation. Q80 Mr Bacon: In total. Mr McCarthy: That number is approximately 75,000. It is falling from over 100,000 and we are on target to hit our 2010 figure of 50,000 households in temporary accommodation. Q81 Mr Bacon: If that is true, I am delighted. I should be interested to see whether Shelter have a similar figure. I thought the figure was a lot higher. Mr McCarthy: Those are the statutory homeless figures. Shelter may sometimes quote what they consider to be homeless figures beyond the statutory numbers.4 Q82 Mr Bacon: Okay; fair enough. Do you have somewhere to live? Mr McCarthy: Yes, I have somewhere to live. Q83 Mr Bacon: Mr Housden, do you have somewhere to live? Mr Housden: Yes. Q84 Mr Bacon: And Mr Quartermain, do you have somewhere to live? Mr Quartermain: Yes. Mr Bacon: I think frankly for 50 years the system has failed people who do not have anywhere to live. It is all very well if you have somewhere to live. It is not the fault of the present Labour Government; it is not the fault of any one particular previous government. The system has failed for 50 years. I was interested to hear you say that you are very proud of the town and country planning system we have. I think that since 1947 the town and country planning system has basically failed. It has sustained a structural imbalance between the number of people who would like to have somewhere to live and the number of houses that are available. Most of the built environment which is worth preserving, protecting and keeping was built prior to the 1947 Town and Country Planning Act. 4

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Chairman: That is a very interesting historical thought but let us leave it at that. Q85 Mr Bacon: It is not a question by the way so you need not answer. Mr McCarthy: I should quite like to but you probably do not want to hear my response. Q86 Keith Hill: Actually, if you look at those who are statutory homeless, almost all of them live in what you and I would deem to be a normal house, a normal flat with a roof and four walls. We are not talking about people who are on the streets or living even in very unsatisfactory forms of accommodation; it simply happens to be temporary. Also, I have to disagree with you about the failure of the town and country planning system in this country. If you go to Ireland, if you go to Italy, the Veneto, if you go to the US or Canada, go round the Gaspe Bay Peninsula on the St Lawrence seaway you will see urban and residential sprawl such as we do not experience at all in the UK. It has been a great success in my view. However, that is absolutely nothing to do with the issue I want to raise which is really about the 2004 bursary scheme, which I introduced and of which I have always been inordinately proud. The NAO paints a rather dim picture of it but actually, to be more precise, in paragraph 3.9 the NAO paints a picture of a largescale potential shortfall in the number of planners “unless further action is taken”. They acknowledge that present economic circumstances may make a diVerence. That does seem to contrast very much with the very upbeat account which Mr McCarthy gave us of the state of local planning authorities at the earlier point of our exchanges. Mr McCarthy: The reason for being upbeat is because we have turned a very important corner. The extent to which the malaise had appeared in the planning system, with planning schools closing, was a very serious point. My own piece of history: I am a geographer and when I studied geography in the late 1970s the best geographers went on to be planners. That was one of the cream professions to go to. What we have now done is turned a very significant corner. You have seen that the number of people who are now going through our bursary schemes is a very significant number. We have now seen planning schools full and I believe new ones opening. We have though, and we recognise it, a need for more professional planners. A slight irony is that the reduction in planning applications is also taking a little bit of pressure oV local authorities at this time. However, the continued need to maintain the development and training of future planners, to encourage children and students and others considering a career to look again at planning and to look at the excitement it can bring them as they help shape places as well as deal with real planning applications is an exciting one which is sadly still one we need to promote further. I would like to say that our position and my position is one where we are upbeat but we are not complacent. We have a lot more to do.

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4 February 2009 Department for Communities and Local Government

Q87 Keith Hill: Do you think this doubling of the number of students doing planning, the expansion in the number of universities oVering planning courses, has any kind of interaction with the bursary scheme? Mr Quartermain: As a geographer who studied in the 1970s and went on to become a planner I do not know quite what to say. In terms of the bursaries being oVered, that has definitely been 29 schools now credited with the RTPI and the bursary scheme has been a real bonus to them. In fact only this week we have been talking to one of the universities which currently is not able to take advantage of it, but has changed the way in which they teach planning and will now qualify for bursaries. It proves to me that there is an incentive to teach planning because the bursary scheme is there and it can bring students to you. Q88 Keith Hill: I suppose I ought to declare an interest in this regard that I persuaded a niece of mine, who is a very good geographer, to take a bursary at University College London and she is now a planner and enjoying it very much indeed. Finally, may I just ask about what I read to be a decision, which is that henceforth those who benefit from the bursary schemes will be required over a period of five years to work in the public sector for a couple of years. What has led to that? Has there been a kind of dissatisfaction about the way in which the bursary scheme has panned out, notwithstanding its overall beneficial eVects? Mr Quartermain: That is a measure we have introduced. I am not aware of any feedback from that. It is accepted that is part of the package. Mr McCarthy: There was a slight concern that the public sector was not getting the full benefit of its investment in people to become professional planners and it seemed a reasonable value-formoney criterion to put on to the scheme.

Mr Curry: Moving away from Mr Hill’s This is Your Life, could I make a plea that we try to demythologise planning and we start by using expressions which have meaning in the English language? Could we get rid of the “regional spatial strategy”? I have not the faintest damned idea what a regional spatial strategy is. If it means land use, can we say land use? Can we use Anglo Saxon? I do not know whether it is about Britain’s attempt to get back into space or how many jumpers I can get in my cupboard, but whatever it is I do not have a clue what it means and most of my constituents do not know what it means. It is part of this “mythologisation”, apparatchik-speak. Can we have English language please? You do not have to reply, just work on it. Some future Mr Hill will make his name by turning planning into a comprehensible science. Keith Hill: It is impossible that there could be a future Mr Hill. Q89 Chairman: Just say yes. Mr McCarthy: Yes. Q90 Chairman: Gentlemen that concludes our hearing. When it still takes 26 weeks for applications for major residential schemes to be approved that is far too long. One of your most interesting answers was when you gave some inkling of what the Minister might say. Is it early March that you are looking for an announcement? Mr McCarthy: I said by early spring. Chairman: It strikes me that there is not much point producing our Report just a week before the Minister makes her announcement so we may have to delay our Report for a few weeks until the Minister makes her announcement and we may have to incorporate it. Thank you very much for this afternoon.

Supplementary memorandum from the Department for Communities and Local Government

Question 16 (Keith Hill): Point of clarification Keith Hill MP asked whether he was correct in thinking that there was a mechanism within the allocation criteria for the award of Planning Delivery Grant which penalised local planning authorities who actually proved to have a poor performance in dealing with appeals. In the answer, Chief Planner Steve Quartermain confirmed that there was an abatement mechanism whereby if it was felt that authorities were refusing applications to meet the targets, there was a 10% abatement from that authority’s planning delivery grant allocation. The 10% PDG abatement alone applied only in 2004–05. From 2005–06 onwards there was a 10% abatement if an Authority’s appeal performance was at least 40% worse than the national average and a 20% abatement if that performance was at least 50% worse. Question 19 (Keith Hill): Planning Delivery Grant Keith Hill MP asked if there was any reason to believe that councils did cut spending on planning as a result of PDG. In the answer, Chief Planner Steve Quartermain replied that research showed that around 97% of authorities spent their PDG on planning. The actual figure is that over the course of the PDG allocations (2003–07) the proportion of authorities who spent all the PDG in the planning service was between 93% and 97%. The research did not find any evidence that councils cut the base funding to planning services because of PDG.

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Committee of Public Accounts: Evidence Ev 15

Questions 36–37 (Mr Mitchell): Planning Application Pipeline Austin Mitchell MP asked about the number of planning approvals that had not yet been started. Richard McCarthy advised that he would forward on the information. The “planning pipeline” for England shows the housing numbers at various stages of the planning process: the “housing requirements” in regional plans (Regional Spatial Strategies), numbers in local plans (Local Development Frameworks) and local authorities identifying suYcient land supply and granting planning permissions. Key information demonstrates that: — there are 940,000 houses with “planning permission but not yet started” at March 2007; — 6,234 new planning permissions granted for major housing developments (10 or more units) in 2007–08—however, rate is recently declining: 5,612 granted in 12 months to September 2008; — at December 2008, 210,000 houses per year have been specified as the planned requirements for the next 10 years in Regional Spatial Strategies (current and draft) This compares with 150,000 per year identified in previous round of regional plans and local plans; and — 90% of local planning authorities reported that they had identified suYcient sites to supply the housing planned for the five years from April 2007. There is not a “one to one” relationship between the numbers at each stage of the process since, through the plan-led system, applications for planning permission are determined in line with policies in the development plan unless material conditions indicate otherwise. The development plan consists of the Regional Spatial Strategy and the Local Development Framework. Question 75 (Mr Bacon): Numbers of homeless Richard Bacon MP asked about the number of homeless. On 30 September 2008 72,130 households were in temporary accommodation under homelessness legislation, 3% lower than at the end of the previous quarter and 13% lower than the same date in 2007. The numbers of households in temporary accommodation has now fallen for 12 consecutive quarters, and is 29% lower than the peak during 2004. During July to September 2008, 14,340 applicants were accepted as “owed a main homelessness duty”, which was 13% lower than during the same period in 2007. 19 February 2009

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