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UK Planning System is Underperforming Says NAO

A recent report by the National Audit Office is showing that the UK planning system proposed by the government is underperforming and not meeting housing demand effectively.

The government has implemented UK planning system reforms to help local authorities across England decide where what type, and how many new homes should be constructed.

An average of 177,000 new homes per year was built between 2005-06 and 2017-18. The amount has never exceeded 224,000. To meet its target, there will need to be an increase of 69% over the average number built in 2005-06. This number has gone up every year since 2012-13, with 222,000 new homes built last year.

In 2017, the Department implemented a method for local authorities to determine how many new homes they need but it has flaws and needs to be revised to ensure that 300,000 new homes are produced each year by the mid-2020s.

As of last December, only 44% of local authorities had a current plan for meeting their housing needs, although the requirement is legislated. If a local authority cannot demonstrate that it has a five-year supply of available housing land, developers have more authority to build where they want. As of November 2018, only 15 authorities have been challenged for lack of a current plan.

Infrastructure such as utilities, transport, and healthcare must be in place to create homes, but this is difficult because government departments do not have to align their investment strategies with the infrastructure plans of local authorities.

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The methods used to get developers to help with infrastructure costs are not effective, as developers are renegotiating their contributions on the basis that profit margins cannot be maintained.

Between 2011-12 and 2016-17, developer contributions decreased slightly, although house prices in England went up by 31% and top developers are seeing their profit margins increase. Without their contributions, local authorities must pay more or less infrastructure is built.

According to the Department, local authorities are processing more applications within target timescales, although this could be due to more use of time extensions instead of improved efficiency. The Planning Inspectorate is processing developer appeals too slowly, with 38 weeks being the average.

Local authorities have been spending less on planning functions. The Department has attempted to deal with a planning staff shortage by funding a bursary programme, but it lacks the data to assess the skills gap.

It is too early to tell where the changes introduced by the National Planning Policy Framework will be effective. The Department also needs to monitor the gap between what is being planned and the goal of 300,000 new homes. It also needs to work with government departments like local authorities to deliver infrastructure more effectively and research the skills gaps in planning teams.

The supply of new housing has failed to meet demand for years. The current UK planning system does not appear to be working well and the government needs to ensure that new planning policies bring about the necessary change.

Specialists in Construction Insurance

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