In July 2024 the Government commenced its consultation on changes to the National Planning Policy Framework (NPPF), which amongst other things included its revised approach to calculating the Standard Method of housing need.

In previous commentary [Government kick-starts much-anticipated NPPF consultation and planning reform] we summarised the detail of key changes and provided our initial thoughts on what it may mean for the planning and development industry.

We consider the revised standard method, and its effect on plan-making in the context of the transitional arrangements set out in Annex 1 of the proposed NPPF below.

Regionally, the revised method gives rise to the following changes to housing need when compared to the current standard methodology:

1. North East: 99%
2. North West: 76%
3. Yorkshire and Humber: 47%
4. South West: 43%
5. South East: 35%
6. East Midlands: 32%
7. West Midlands: 28%
8. East of England: 28%
9. London: -18% 

A map of the regional increase can be found below.

Whilst the North East is subject to the largest regional increase, eight of the ten Local Authorities subject to the most significant increase are situated within the North West. As the only region potentially facing an overall decrease, it is unsurprising that all but one of the ten Local Authorities subject to the largest decreases in need are situated in London. The top ten increases and decreases are:

To aid the understanding of the regional impact of the revised standard method we have mapped both the current and proposed standard method figures at a local authority level.

• Current Method
• Proposed Method
• Percentage Change

We now look at how some Local Authorities within the regions are responding to the revised standard method and the effect it is already having on plan making, despite only being at a draft stage.

North West 

Liverpool City Council is the only Authority within the North West where the calculated need decreases – with the requirement  down 3% from 2,167 to 2,090 dwellings per annum (‘dpa’), albeit the removal of the urban uplift needs to be considered in the context of this ‘decrease’. 

Conversely across the River Mersey, Wirral Council’s housing need would rise 141% from 723 to 1,755 dpa. A figure that is significantly higher than the 800dpa currently planned for through the emerging Wirral Local Plan, which has thus far been found unsound by the examining Inspector. These figures represent just one example of many, whereby LPA’s are subject to significant differences between what is being planning for, and the proposed standard method need. 

Wirral Council intend to progress with the emerging Local Plan, as pursuant to Annex 1, Para 226(c) of the proposed NPPF that confirms that the plan at an advanced stage would continue to be examined under the current NPPF. Should the plan be adopted, the effect of Annex 1, Para 227 of the revised NPPF would mean that the Authority would have to immediately begin preparing a new local plan to address the significant shortfall. To do so, the Council would need to adopt an approach contrary to the brownfield only approach of the emerging Local Plan and would need to undertake a strategic review of and revisions to the Borough’s Green Belt – an approach to spatial planning that is subject to significant political and public opposition across the Wirral.

Another Authority pledging not to release any Green Belt for development as it progresses its emerging Local Plan is Stockport Metropolitan Borough Council (‘SMBC’). However on 8th August 2024, in light of the revised standard method figure and changes to the NPPF, SMBC postponed its planned Local Plan consultation (due to take place in September and October 2024). This represents the third postponement of Local Plan consultation since September 2023 (the first being due to political uncertainty, the second being because of the General Election).

Having previously withdrawn from the Greater Manchester Spatial Framework (now known and adopted as ‘Places for Everyone’ due to proposed Green Belt release, the revised standard method increase from 1,097 to 1,906 dpa (an increase of 74%) will likely mean that standard SMBC will now need to revisit its approach to delivering the homes it needs and undertake a strategic review of its Green Belt. In the face of an absence of a 5 year housing land supply, the increased housing need provision only adds to the pressure that standard SMBC already face in respect of its housing supply.The impacts of the revised standard method on plan making in the Wirral and Stockport, is reflective of the challenges faced by many other authorities across the Country. Despite the significant uplift and drive for growth, the viability challenges that affect so many parts of the region will also continue to represent a challenge to delivering the residential development needed across the region.

North East and Yorkshire

The North East is subject to the largest proportional increase in housing need, whilst Yorkshire and The Humber is subject to the third largest proportional increase.  As a result, most authorities across these two regions would face substantial increases in housing need. Most notably, Redcar & Cleveland’s housing need would increase by a staggering 1,337% - the largest increase faced by any local authority, albeit from a relatively low base. The removal of the urban uplift  would have a negligible impact upon the main urban centres (Newcastle, Sheffield, Leeds, and Bradford) which would see only limited increases or decreases. 

Most authorities across the two regions are currently at an early stage in plan preparation and, in the context of Paragraph 226 of the draft NPPF, would need to start preparing new local plans against the revised housing need requirement should the proposed amendments be taken forward. However, as with the North West, there are a  small number of authorities that have local plans at an advanced stage which may be affected by the proposed changes.

The City of York Draft Plan was submitted to the Secretary of State in 2018 and has been through an extensive period of examination. The Draft Plan sets out a housing requirement of 822 dpa, 429 below the 1,251 dpa identified through the revised standard method. Whilst the Draft Plan would be allowed to continue to adoption, pursuant to Annex 1 Para 227, work on a new local plan would be expected to begin immediately due to the increase in housing need.

In South Tyneside, the Draft Plan is due to be submitted to the Secretary of State in September 2024. It is now at risk of delay due to the significant gap between its housing requirement  309 dpa and the revised housing need figure of 706 dpa (397 dpa).

The challenge for many authorities in the North East and Yorkshire will be  delivering such a significant uplift in housing and meeting new housing targets given the viability challenges that affect so many parts of both regions. It is anticipated that (based on past delivery rates) those authorities constrained by Green Belt will face particular challenges in meeting their revised housing needs. 

Midlands

The East and West Midlands see an increase in housing need despite the removal of the urban uplift and consequent reductions in housing need across the regions’ largest cities (Birmingham, Coventry, Derby, Leicester, and Nottingham).

The revised standard method results in a 28.4% increase in housing need across West Midlands, with the largest increases affecting Tamworth (261.1%), Redditch (242%) and South Staffordshire (203.6%). South Staffordshire, for example, is an authority area of which 79% of land is designated as Green Belt, and similarly other authorities subject to significant increases such as Bromsgrove (89%), Solihull (67%) and North Warwickshire (61%) predominantly comprise Green Belt land. 

The proposed changes to the standard method have been reacted to by some LPAs within the West Midlands, with South Worcestershire (Worcester City, Malvern Hills and Wychavon Districts) publishing a joint statement on 9th August acknowledging the 80.3% increase (from 1,193dpa to 2,151dpa) in its jointly calculated housing requirement which, in line with the transitional arrangements set out in Annex 1 of the NPPF, would require a new plan to be prepared immediately after adoption to address the significant shortfall. Likewise, South Warwickshire (Stratford-on-Avon and Warwick Districts) published a press release on 12th August recognising the need for flexibility to potentially accommodate the revised standard method in the emerging Local Plan for South Warwickshire.

The challenges in meeting housing needs to date is reflected in Leicestershire, where a Statement of Common Ground (SoCG) was collaboratively published by all 8 LPAs in the County in 2022 and seeks to resolve the issue of Leicester City Council’s demonstrated unmet housing need. As a result of the proposed removal of the urban uplift from the standard method, the City’s annual housing requirement drops by 30.6%, from 2,435 dpa, to 1,690 dwellings per annum. At first glance, the reduction in need appears to be a relief for Leicester, however the revised figure remains considerably higher than past delivery rate, which measures at 1,014 dwellings based on the average annual net additions from 2020/21-2022/23. Likewise, while the urban uplift has been removed from Leicester’s requirement, the calculated standard method need for Leicestershire authorities increases as a whole from 5,568dpa to 6,035dpa. With the Examination Hearings into the draft Leicester Local Plan due to commence in October, it will be interesting to observe the potential implications of the revised standard method on the distribution of unmet need across the County which remains upheld by the SoCG. In particular, there may be uncertainty as to the position of neighbouring authorities, all of which with the exception of Charnwood are at an early stage of reviewing their Local Plan and see an increased housing requirement that would need to be accommodated as a result of the revised standard method.

Political resistance to Green Belt release and development represents a significant hurdle LPA’s will have to overcome to meet the revised standard method need. When taken alongside longstanding delivery and viability challenges that will be faced in certain areas, it brings into question the feasibility of dealing with the revised housing need 

London and South East 

One of the most discussed impacts of the proposed standard method changes has been to London, which would result in a decrease in its overall housing target of 18.3%, to 80,693 homes a year.  The 80,000 homes per year, however, is a greater contribution to the overall needs figure of 370,000 than London has delivered previously - equating to just under 22% of the country’s housing requirements.

24 of the 32 boroughs would see a decrease ranging from 58% to 2.6%, with the largest decrease being in Tower Hamlets (-58.1%) and Barking and Dagenham (-56.5%). That said, Tower Hamlets has recently approved its draft Regulation 19 Local Plan for consultation this autumn.  The decrease in housing targets does not tell the whole story, however, of the 24 boroughs with a proposed reduction in housing targets, 21 still have a housing target above their average annual net additions from 2020/21-2022/23. 

The largest increase for a London borough was the Royal Borough of Kensington and Chelsea (RBKC), with a proposed increase of 209.2%, from 1,381dpa to 4,271dpa.  RBKCs Conservative Lead Member for Planning has, however, pushed back against the proposed increase. The final borough-level targets are intended to be set by the Mayor, which may result in modifications to the finalised housing targets for each borough. Though overall the target has decreased in London, development in the capital would need to continue at a fast pace to address past under delivery.  
In the South East Green Belt authorities have been significantly impacted by proposed changes to the standard method. As an example, planning authorities in Surrey have an average increase of 65% in their revised annual housing targets, with none of them having a decrease in the proposed targets. 

We are aware that Green Belt authorities have already paused their emerging Local Plans due to the proposed changes.  On 15th July Tonbridge and Malling Borough Council announced a pause to its Local Plan process due to Rachel Reeves’ announcement of amendments to the NPPF. The changes to the standard method propose to increase the LPA’s housing target by 28.8%, from 820 to 1,057 dpa.

Elmbridge BC also published an update on the 5th August which stated that its draft Local Plan Examination was being paused due to the proposed NPPF changes on the methodology for calculating housing need, which proposes to increase the target by 121%, from 653dpa to 1,443dpa.

South West 

At a regional level, the South West sits middle of the pack in respect of its increased housing need. Under the revised standard method, the need increases by 43%, from 28,203dpa to 40,343dpa.

Bath and North East Somerset and Cotswold are the two districts which see the largest change between the current and proposed method in the Southwest, recording increases of 104% and 94% respectively. Conversely, the two districts with the lowest percentage change were Bristol, following the removal of the urban uplift, and Gloucester, with decreases of -9.5% and 10.3% respectively. 

Government statistics on dwelling completions show that Bath and North East Somerset completed 6,130 dwellings from 2013/14 to 2022/23, equating to an average delivery per annum of 613 dwellings over the ten-year period. This average is some 853 dwelling per annum (dpa) short of the 1,466 dpa needed as per the proposed standard method. Whilst this shortfall is not insignificant, it is even greater in Bristol. Over the same ten-year period, Bristol delivered 7,230 dwellings with an average 723 dpa. Whilst Bristol would see their need decrease under the proposed method, average delivery over the period is 2,334 dpa, well short of the 3,057 dpa required by the proposed new method. The two districts have a shortfall in housing delivery in common which is likely to continue to present a significant challenge to their capability to meet their housing need. Inevitably, changes to the boundaries of districts Green Belt will likely be required to assist towards meeting need.

Within 24 hours of the launch of the Government’s NPPF consultation, North Somerset Council announced that it would not be proceeding with the final consultation on its draft Local Plan (Reg19), which had been scheduled for September. The Council published its draft plan in October 2023,with a local housing target of 14,902 dwellings for the 2025-2040 period, at 993dpa (already less than the current method figure of 1,324). Following the new proposed standard method, the housing requirement for North Somerset would be 1,587dpa. The pre-submission plan was only agreed by the Council on 17 July 2024 and contained  no strategic allocations in the Green Belt. The Council have announced that they will now work hard to review their draft plan  and hope to progress it as quickly as they can.

Wiltshire Council is currently at Regulation 19 of their Local Plan preparation. Whilst they have yet to announce any delay to the proposed submission of the plan, they are one of 10 local planning authorities in England that may have to rework their plan due to a significant under provision of housing when compared to the revised standard method. In Wiltshire’s case, the Housing target in their draft Plan is 1,470 dwellings per year, and under the proposed standard method would be 3,476 dwellings per year, a 136% increase on their draft Plan target, requiring an extra 2,006 dwellings per year.

Wiltshire is also one of eight LPAs that currently benefit from the reduced four-year housing land supply provision which is proposed to be scrapped. This would place them at risk of facing the presumption in favour of sustainable development. Wiltshire’s current HLS is 4.16 years, which is likely to decrease given the proposed rise in their annual housing requirement. 

Concluding Remarks

The results of the revised standard method are significant at both a regional and local level. Despite only being draft and at consultation stage, the proposed changes are already having a consequential effect for LPA’s in their plan-making efforts.

Pursuant to draft Paragraph 226 (Annex 1) of the revised NPPF there are examples across the regions whereby LPAs intend to proceed towards adoption of a local plan with an annual requirement more than 200 dwellings below the published revised standard method figure. However, if these plans are adopted draft Paragraph 227 (Annex 1) requires the LPA to commence plan-making in the new plan-making system at the earliest opportunity to address the shortfall in housing need. The significance of this cannot be understated and will have sweeping implications for those authorities. In effect, under the revisions proposed, it appears that despite adopting a plan found sound by examination, an LPA would immediately be at risk of challenge on the basis of housing need until a new plan based on the new standard method figure is adopted and likely lead to more speculative applications and appeals on the basis of the absence of a 5 year housing land supply.

Given the significance of the increase faced by some LPAs, the pertinent question is how they can plan to accommodate the increased housing need of the revised standard method, particularly in those areas heavily constrained by the Green Belt. The proposed relaxation of some of the restrictions that currently apply to ‘Previously Developed Land (‘PDL’), the limited infilling of land in the Green Belt, the widening of appropriate uses, and the insertion of ‘Grey Belt’ would, to some extent, help towards delivering development in response to the increased need in sustainable locations. Furthermore, the incentivisation to enable LPA’s to amend Green Belt boundaries to meet its identified needs in full (unless the review provides clear evidence that such alterations would fundamentally undermine the function of the Green Belt across the area of the plan as a whole) could in theory go a long way towards helping identify and allocating land to meet the revised standard method. However, it is envisaged that any attempt to do so would likely face significant and sustained political resistance, the likes of which we are already beginning to see through LPA’s responses to the consultation on proposed changes.

The opportunities and implications of the proposed changes to the Green Belt, together with the insertion of the ‘Grey-Belt’ is something that we will explore in further commentary given its significance.

Likewise, whilst this piece focuses on the regional impacts of the revised standard method of housing need, it is necessary to highlight that this is just one of a number of changes proposed by the newly formed Labour government in a bid to kick-start economic growth and ensure that the UK is a stable place for business to invest. Amongst the changes proposed are reforms to planning policy to build the infrastructure needed to power the economy, support investment and construction of key modernised industries (i.e. data centres, gigafactories and laboratories) to support economic growth. We will be exploring the changes proposed to Chapter 7 of the NPPF in the bid for planning policy to drive the economy in detail in the commentary piece to follow in the coming weeks.

It can be concluded that numerically the changes proposed incentivises the delivery of the homes proportionate to the existing size of settlements and seek to rebalance the national distribution of residential development to better reflect the growth ambitions. However, given the significance of the changes proposed it will be interesting to see how LPAs respond to the challenges the revised method creates, and how development is delivered against the revised standard method.

For more information, please contact a member of our team below.