Tag Archives: government

Big numbers for the big players

There is never a quiet week in housing policy, but perhaps we should have known something would happen at this week’s national housing federation summit. And lo Theresa May came down from the mountain bearing many warm words and a policy intervention or two. Oh and what looks like a huge sum of money and a sensible amount of time to spend it.

Now, I’ve spoken before about politicians bearing cheques with lots of numbers on. You’ve got to be careful to understand what sort of a scale we are looking at, how it fits into the wider framework and if this is new money. To paraphrase what we know so far, it is £2 billion over 7 years, starting in 2022 and is expect to deliver around 40,000 affordable homes across this period. So £285 million a year and an average (although it will be skewed towards the end of the period) of 5,700 homes a year. That’s all very good, but it won’t set the world on fire, particularly if high land values persist.

We don’t know where the money is coming from because 2022-2029 is part of the next spending review. Essentially what the Prime Minister has done is earmarked part of government spending in the next long term period. So in one sense the money cannot be “old” in the sense of transferred from somewhere else as the entire long term budget of the government has yet to be decided. The spending review will move money all over the place and like most magician’s tricks you won’t be able to tell where the card in your pocket came from. So a slamdunk “this came from reducing x fund” won’t happen in quite the same way. Sorry.

Nothing I’ve said above hasn’t already been discussed a huge number of times already and at first I was content to take my daughter to the park rather than repeat what everyone else is saying. But one thing I’ve noticed hasn’t been discussed much is what this change might do to the housing association sector.

The funding has been announced as an extension of the “strategic partnerships” the government has already undertaken with many of the very big housing associations. I can only imagine that this will continue, perhaps with some smaller proportion going to the simply big and medium sized organisations and a small amount to the actually small ones. The big organisations will be the ones who can deliver on the scale the government are looking for, who can speak the same language as the government and articulate a large vision. They are likely to share social contacts with ministers or senior civil servants. They will often have a greater degree of financial security and an ability to speak to the markets in a language they will understand. My point is, it is the big boys (gender intentional) who will win at this game. That’s the way the funding is structured.

What does this mean for the smaller housing associations? What should they do. Their options are:

  1. Rely on other funding. Keep purchasing sites from developer’s section 106 agreements or using whatever other affordable homes funds we all expect will exist in the next spending round (even if it is smaller).
  2. Act like a bigger organisation. Get in a management team who can talk the talk (and might need paying to do so) and go to the right conferences, summits and soirees.
  3. Become a bigger organisation. Do what the big players have done and conglomerate, start acting more like a business, maybe look at poaching a manager from one of the larger organisations (perhaps one that already has a deal).

None of this means that a couple of smaller organisations may get deals, but I strongly predict that they will be the exception rather than the rule. For all of the talk about the housing associations’ Victorian beginnings, this looks like another step towards having fewer, bigger, more commercially minded and deal orientated organisations. Whether that is a good thing or not isn’t really my place to judge, but this is something boards will need to think about as they prepare for 2022.

And what does this mean for the homes that will be built? Well, that’s really left to the organisations and the government to decide between themselves, on a rolling basis. This is in part going to respond to housing needs, but let’s face it, it will also be a carve up between the associations and government. If housing associations are designing whole schemes containing market, “affordable” to buy, “affordable” to rent, shared ownership and social housing then their ability to balance these out will be the key factor on how big a difference this can make. But there will be an economic logic- it will have to depend on what they have paid for the site. The bigger, more commercial organisations may also have to balance out any losses made elsewhere.

So what I’m coming to is that there will be a pressure towards the top end of the market- either a greater proportion of market prices or the supposedly affordable homes. Social rented homes will get squeezed unless the government is forceful about demanding these in high enough proportions. Even with the much warmer words on social rent (by which I mean “tepid” compared to Cameron/Osborne’s “absolute zero”) the plethora of price points open to housing associations plus the economic logic as a site’s costs inevitably increase mean we may see fewer social rent units than anticipated.

In conclusion, if I had been an the summit I would have perhaps clapped, but I wouldn’t have got on my feet. This is a large but limited amount of money, may quicken the change of the housing association sector to an oligopoly and may mean there are fewer social rented homes than if the money had gone into the affordable homes programme. It doesn’t do anything to affect land prices and will be very limited for councils, who (to repeat myself for the umpteenth time) really only need a single accounting rule to be changed to get on with building new council houses.

What it really means in totality won’t be known until we see the spending review. That’s not for a while yet and who will be standing at the dispatch box to deliver it may make all the difference.

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And still high rise

High rise blocks. For good or ill they are on the agenda. The tragedy at Grenfell has highlighted that at least some recent re-furbs have been done poorly and in a way that increases fire risk. But many thousand people live in high rise blocks across the country and, whatever some Birmingham Conservatives might think, the buildings are likely to be here to stay in the long run.

So, getting away from the need to ensure they can contain fires (something bare concrete blocks are actually quite good at!) what is the issue with high rises, particularly council and housing association blocks? Firstly, we have to admit that a minority of blocks were poorly designed and constructed and that no amount of refurbishment apart from complete gutting or demolishing will make them adequate to live in. Those blocks should not stand the test of time. Bodged refurbishments need to be improved and if risks have increased by refurbishment (as it appears they were at Grenfell) then this need to be reverse quickly.

Moving on from this, the upkeep of blocks is best described as “hit or miss”- some communal areas in blocks are well looked after, both by the tenants and the housing management and some, well, aren’t. Crucially, the need to foster both an active community spirit and adherence to fire regulations in communal areas is key to making blocks livable and safe.

Next, when blocks were built there was fewer qualms about families with children living high up. Most point blocks were built with at least two bedrooms with the expectation that a family would be living in them. Nowadays families with children quite rightly won’t usually seek this kind of accommodation and are likely to reject it if they are offered it, or stay there for a short time before moving to somewhere more appropriate. To be fair to the Brum Tories, it does sound like there is an issue with children being accommodated at height in the second city, but their approach seems to be knock them down and start again, rather than relocate and consider what else can be done with the blocks.

Thirdly, if families aren’t going to use the blocks then who will? Recognising the problems relating to families quite a few councils started putting single people into two bedroom high rise flats, but along came the bedroom tax and put anyone in this situation claiming benefits at a disadvantage. Who knows how long the bedroom tax will be in existence. Unlike the blocks themselves they are simply legislation- a government could overturn it very, very quickly if it chose to. But until that happens single claimants of working age are rightly pretty concerned about creating a liability they cannot afford.

Next and on to a more general point, but amplified by people living cheek by jowl and with communal spaces in high rises, is that with significant demand for affordable housing someone (usually under choice based lettings a computer) has been deciding who qualifies for the next available house. In many areas, this means most if not almost all lettings are to people with one form of priority need or another. Filling a dense space with people who, for one reason or another, have a vulnerability and many of whom who have experienced homelessness (in one form or another) is possibly not always great housing management.

Finally for this sketch, quite a few of the older high rise blocks were built in the middle of larger council estates. If people are tempted to move into them they either have to have no issues with that or overcome those issues, potentially by experience of the area at its best.

Over time these issues have interacted in order for some blocks to see a vicious circle. Families moved out and only those topping the housing queue could get a house. Those bidding (or, pre-CBL, those being placed) were likely to be relatively desperate for a home. Communal areas were neglected or vandalised, if not cleaned up then they would get worse. The sort of tenants who may act with community spirit eventually became and exasperated and moved out. Most flats were filled, but with the advent of the bedroom tax it became hard for working age people to consider moving in, so some were left empty. Empty flats led to concerns from neighbours, some of whom moved out. And so on.

It is worth remembering that a significant amount of money has been spent on many high rise blocks, firstly to get them up to decency standard and then to make them nicer places to live. But the logic I have until now outlined potentially shows that there is a need to treat high rise blocks as a bit of a special case that needs some special answers.

What I’m about to say next isn’t new and I certainly don’t want anyone thinking it is my idea. But there is an answer staring us in the face for at least some of the blocks. If households with children and single working age people cannot be accommodated, who does that leave?

I’ll ask another question: who is sitting in larger properties that could be used by families, perhaps as they have children who have moved out, who may have gardens they want to maintain but struggle, who would like to take part in communal activities close to their home and would by and large respect and maintain shared spaces? Who doesn’t need to worry about the bedroom tax?

Indeed there are plenty of examples of councils and housing associations using recently refurbished blocks as general accommodation for older people. Absolutely fundamentally, what doing this means is that you have to ensure the lifts keep going at all costs (lift engineers can be expensive!) and maintain communal spaces so that people can live and socialise under the same roof.

This shouldn’t be about forcibly moving people out of their homes, rather creating exactly the kind of private living space with communal facilities that many private providers are showing many older people want. If you can make high rise blocks desirable to live in for older people then you can free up other homes, provide a decent and long term place for people to live and ensure the co-location of services around those who need them and social activities for those who want to take part in them.

Another option (again, not my idea) is to let people be a bit more free with who will be renting with them. Allowing house-shares for younger people actually fits with what the government were trying (badly) to achieve with the bedroom tax. Yes, this doesn’t necessarily get away from some of the issues I’ve listed above but it does offer another opportunity rather than letting blocks dwindle away until a politician decides it is time to knock them all down and start again.

So let’s be clear, there are clear opportunities for what to do with high rise blocks that break the vicious circle. Just because they are not suitable for families doesn’t mean that they need to come down and be replaced. With a bit of lateral thinking and investment early in the process high rise blocks (excepting those too poorly built to last) can be something to be saved, lived in and cherished.

Assessed need and its objectification

It must be Christmas because I’m talking about planning again! Not only that, but going back to the topics of one of my first posts– the attempts to estimate of how many houses we need.

Reading Inside Housing the other day I came across a slightly strange article title: ‘More than 30,000 new homes were in areas where they were not needed, according to government formula’. Is that true, I thought to myself and, frankly, what could it possibly mean? Follow me on a little circle and I’ll try and explain, hopefully trying to demystify quite a lot of planning-speak as we do so.

First off it is worth reminding ourselves where we are. For a longer explanation, feel free to look at my earlier post. Under the current rules, local authorities have to investigate their own housing need and convince an inspector that the methodology they have used to calculate housing need (and the answers that follow from this) are accurate. Some authorities convince inspectors, some don’t. There are very few hard and fast rules to this, other than bring as much evidence as you can and explain why you did or didn’t include everything you can think of. The total amount for the country is therefore an accumulation of what each local authority has decided.

The government are proposing a new methodology that is consistent across England and can be worked out fairly quickly and easily. Crucially, instead of accumulation, the government has effectively sought out a way to distribute a national figure for housing growth (between 225,000 and 275,000 a year, more on this below) and then worked out a methodology that achieves this and spreads the national figure over the country.

So the first and absolutely clunkingly obvious thing to point out is that these methodologies are different. They may try and measure the same thing, but they go about it in completely different ways and we shouldn’t be surprised if they come to different national and local conclusions. One seeks to try and make each local area right, probably with a bit of leeway and then accumulate them nationally to something possibly right-ish with lots of leeway. The other tries to take a national view and then spread it about the country, using a crude (but therefore easy to understand) measure of affordability to do so. It is consistent and easy to understand, but as a consequence of being crude, more likely to be wrong for each individual local authority area.

Is there one that is more right and one that is more wrong? Well, in terms of trying to work out how many households there will be in, say, 15 years time, there probably is. Indeed, you only need to look at the work of Andrew Lainton to see an impressive attempt to try and find an even better, consistent, relatively easy to understand methodology.

But even the most spreadsheet happy statistician would have to accept that all they can try to achieve is a good estimate. Frankly, we may only know which was more right when we get there and even then the outcome is likely to be predicated on the actions taken until that point (because creating homes can also create households!).

Let’s put that another way- the numbers the government are using are a little bit fudgey. To begin with, the 225,000 to 275,000 range is quite large; 50,000 homes a year difference between them! The figures come from February’s white paper, with a footnote stating where these numbers come from. This includes the 13 year old Barker Report, which even Kate Barker herself has incredulously commented upon it still being used.

I’m not saying these numbers are wrong, I’m saying there is a 22% difference between 225,000 and 275,000. But what matters isn’t that the number is exactly right, but that local authorities have an idea about the housing need in their area that is seen as required and are actively doing something to meet it in a reasonable and plan-led way.

I’d much rather a good but not perfect guess now, rather than an exact answer some time in the future. And yes, that goes for distribution across areas as well as well as for the national figure.

The alternative approach, the one we have had for the last few years, is to have argument on top of argument about what the actual number, down to the last digit, should be. Local plans have been kept in a form of hiatus for years as these arguments progress. What this has meant, as I’ve detailed in my previous post, isn’t no development, but development where housebuilders want (apart from the green belt) at a rate that suits them.

But what about these 30,000 homes that “weren’t needed”? What the report goes on to say is that this is the difference between the additions to housing stock in the last year and what the same local authorities would have as their targets under the proposed new methodology. Hopefully, you’ll be able to see where the mistake (known or otherwise) is there.

Firstly, the new methodology hasn’t been implemented yet (the government are looking at the consultation responses) and even if they were almost all local authorities haven’t had enough time to update their plans based on the new proposals. Secondly, these were almost certainly homes that were needed in one sense or another not least because the housebuilders, who effectively control the market for new completions, knew they could sell them. Thirdly, the targets are really minimums, with a reasonable amount of over-supply having the potential to offset other years that might be leaner. An area that only just meets its target every year is in for a shock in a low year!

So I can’t quite see what the issue is with the fact that in some authorities some homes are being built. There is much to be critical of the government for in strategic planning. Most notably, making local authorities wholly responsible for builders failing to deliver new homes whilst denying (or at least kicking the can down the road of giving) them the powers to actually do anything about this. Such powers inevitably include letting councils actually build new social homes for rent at a scale that would help alleviate some pressure.

In essence the long discussions about housing numbers have got in the way of delivering homes and taken up a lot of conversation time that could have been spent looking at what could actually help deliver homes, particularly affordable homes (for sale or rent), where they are needed most.

But hopefully what I’ve gone some way to showing is that whilst assessments of need are more or less arbitrary -and the government’s proposals are at the “more arbitrary” end of that- what really matters is that there is a clear and achievable challenge for everyone involved in housing supply to meet and time and space to come to real and actual ways to achieve them. The alternative is essentially a parlour game, where anyone with a spreadsheet and a set of range calculations can have their two pennies.

I’m happy to take part in that game, but would also like to see some decent homes built at the right prices in the right places first. If setting a clear figure and empowering people to get out and build according to a plan can achieve that then let’s get on and do it.

Delving into devolution

Never plan ahead unless you are prepared to throw away. That’s a lesson I have had to learn over and over again.

As I’ve said elsewhere, I had a plan to talk about the trend of government “doing deals” instead of offering the same policy options to everywhere, both through devolution and for new council housing.

Never mind that the letters were falling off from behind Theresa May, her housing policy proposals didn’t once mention the deals government have been working on with some councils for many months now.

I don’t think that means that the deals are not going to happen, just that government thinking has bypassed them for now. Rather than hark on about something that is on the back burner, I will try and talk about devolution more widely, in particular a wide view of what it could mean for the country (and by that I mean England) as a whole.

Now that the dust is settling on the first tranche of devolution deals, with elected metro mayors in a number of larger city regions, I think we need to calmly and reasonably look at where devolution could be leading us as a country and comprehend what this new multi-speed system is going to look like.

We should first take a couple of steps back. Right back to 1974 in fact and forward through many acts to the creation of many of the local government systems we see today. What we need to understand is that England is already a diverse system, with London having its own rules and the rest of the country being split into unitary systems, two tier systems, metropolitan boroughs, non-metropolitan boroughs. Some authorities have a committee system, some a cabinet system and some elected mayors.

The impact of these different systems and the negotiations that brought them about means that councils can be big or small, self contained or not. In just one example, Leeds City Council covers a huge, diverse area. You can walk around the edges of the Leeds district, only very occasionally interacting with something that isn’t countryside or a village. Even the urban join with Bradford isn’t that wide, when you look at it or walk it. Manchester City Council covers a much smaller area, is bordered by Salford and Trafford, both themselves large urban areas part of what the layman would call “Manchester”, although be careful doing that in some parts of Salford!

The reasons behind this are tied up with history and practically ancient politics. Yes, it happened that Manchester and Salford centres grew up next to each other, and Newcastle and Gateshead for that matter. There are historical and political reasons Herefordshire is a unitary authority and Worcestershire isn’t and why it is Herefordshire and Worcestershire, not “Hereford and Worcester”.

The point is, the structure of local government has evolved to both reflect and create very different areas and has done so because government has usually been remarkably pragmatic and open to what they perceive to be the requirements of the local area. But most powers given to councils have been across the board, with only tinkering or one off payments between them. Authorities have often been able to come to their own conclusion on how they wish to run services, but not which services they choose to run.

This was even the case in local authorities that opted to have elected mayors; it was simply another way of administering the same services. In the early 2010s two things changed. One is very techie but could be important in all number of ways- in 2011 councils became able to do anything an individual could do. So they could set up companies more freely, take on other non-statutory responsibilities and were generally more free to act. It is worth pointing this out because really there is nothing apart from finances stopping many authorities from doing what they want- as long as it isn’t creating taxes or go to war. But finance is the key one and we will come back to it!

The other was wider devolution- multiple authorities working together to create a combined authority. This is especially true as this often meant taking responsibility for central government functions and delivering them locally. The list of potential responsibilities is long, but let’s for the sake of brevity state that anything apart from taxing and warring was on the table. Everything was up for grabs, but that’s where the deal comes in. Each different set of authorities taking part had to come to an agreement first with each other and then secondly with central government about what they would like to control and how they were going to be measured on whether they have succeeded.

This means, especially as more areas catch up with the outriders on devolution, that different places have different deals. One place may have a deal to look after health and social care funding, whilst another may not. One may put the oversight of Police into the metro mayor’s hands, another may stick with a police and crime commissioner (for as long as they last). One may have an intricate deal on new housing delivery, another may have just received a cash amount to unlock housing sites. A third may not have considered housing at all in their deal. Many may soon try to franchise bus services, but others may choose to leave that alone.

All this means policy making at the national level will have to become a lot more cautious about what and where central government can make changes- law and guidance will have to be clear about where it applies- which probably means exemptions coming out of your ears. It also means people moving from one devolved area to another will not necessarily have the same entitlements, support or interactions with their local representatives.

Areas that do not have a deal will still be covered by policy decisions made at Westminster, but with fewer and fewer areas covered (particularly populated areas) this is going to mean a very different type of policy making. It could, over time, mean that some Westminster policies and debates become quite tailored to the needs of some of those areas. Assuming it will mostly be rural and semi-rural areas left un-devolved it may mean that some debates in Westminster become focused on those areas.

Indeed, this could even mean that smaller urban areas not in devolution deals will be ignored because the “non devolved areas” are seemingly represented by the views of rural and semi-rural areas. It may also lead to some strange variant of the West Lothian Question- why should Greater Manchester MPs vote on a topic that doesn’t affect their area?

Those on the outside of devolved areas may well look at the extra funding being received with envious eyes. Indeed, this is arguably one of the reasons the Leeds City Region has ended up in the quagmire it has. Those who want to say “me too!” or “me as well!” need to have their cases looked at, but there needs to be some clear and consistent direction from government about who can be involved in devolution and who cannot.

In whatever scheme there will be places outside of devolution. Jonn Elledge’s piece on Herefordshire neatly illustrates that they can and probably will feel left out and something may need to be created for them- I’m suggesting calling it devo-min.

To put that another way, if devolution isn’t for everybody (and that is the mood music out of the government) then the government does have to be clear how the world will work for those left outside the devolved areas as well as accept that their decision making power has been reduced for large parts of the country. Politically, it would be better if this looked like an offer rather than telling them “things will stay the same”, but that’s for the politicians to decide.

I want to come back to finances, because it is clear that the next step for devolution is going to be fiscal. Metro mayors are not going to be happy with a begging bowl approach for long- they are going to want to set taxes. Given the rather terrible state of council tax this isn’t exactly unreasonable; practically anything save a poll tax would be better than further tinkering with council tax.

So we may see different tax rates and indeed different tax styles in different areas. Maybe a land value tax somewhere and an additional income tax somewhere else. This doesn’t necessarily mean the overall tax burden will increase, but there will be pressure to allow metro mayors to levy their own funds to pay for the services they feel people want.

I can imagine the Treasury in particular will try hard not to accept this, but past a certain point it is going to be hard to resist. It will be fiscally hard to control (isn’t that the point?) but could lead to significant buy-in if people recognise the links between their payments and the services they receive. I suspect as a final statement, the Treasury will argue that any authority with fiscal powers should be allowed to fail.

So a system where devolution has reached its apex will be characterised by diversity, but we have to remember that we had a diverse system to begin with. We’ve coped with it well enough so far. Policies in one place may simply not apply in another- I think we can probably cope with that, although newspapers will no doubt be up in arms about postcode lotteries. It certainly won’t look federal, because there will be swathes of the country where devolution doesn’t apply. Those areas may feel hard done by unless they have some individual offer-whether it is a form of control or a guarantee of only their MPs setting the rules for those areas.

If the government doesn’t like the look of that they could try and put the genie back in the bottle by limiting the ambitions of devolved areas. If that’s the case, we could see something much more like the old metropolitan county councils, which would be a crying shame. This would be a two-tier system, with perhaps limited additional powers (the current agreements plus a few more, if they’re lucky), but mostly just conglomerated powers from the existing councils underneath them.

Diversity is not a bad thing, it can lead to experimentation and finding out what works. Areas that are not the same shouldn’t be treated the same (that would be an oversimplification). Some slight form of competition might be beneficial.

But we do need to have a sensible discussion about where we want to set the limits and what we need to do with the areas where devolution doesn’t apply. If nothing else, that will let the areas ripe for devolution go for it without being held back by a small number of interested parties.

You break it, you OAN it

It’s almost as if someone in DCLG was reading my blog. No sooner had I written on how the government made planning significantly more complicated by “simplifying” the regulations and guidance on objectively assessed housing need (OAN), do they turn around and announce they are proposing to change the way housing need is calculated.

There are effectively two problems I am going to look at in this post. The first is societal- not enough homes being built, in the places where people want to live in them, for a price they can afford to buy, or in many cases even rent. One of the positive things to have happened in politics in the last couple of years (and this is through significant campaigning from organisations and journalists) is that this is no longer any serious political disagreement on this point.

The second problem, as I mentioned in my previous post, is that the assessment of housing need is currently mired in ambiguity and complexity and can lead to bitter and acrimonious disputes lasting years and taking millions of pounds of public money to resolve, and then only temporarily.

I’m going to argue that resolving the second problem is a step in the right direction, but without other significant changes it will not go far enough to relieve the real-world problems caused by a lack of housing supply.

To properly understand this issue, we need to understand what roles councils currently play in creating new housing. Sometimes media reporting on this issue suggests that councils are going to be “forced to build more homes”. For Local Authorities demanding to be given the powers to actually build a decent amount of council homes that’s a pretty hackle raising misunderstanding!

Local planning authorities (for the most part local authorities, but there are some National Parks and the Council of the Isles of Scilly thrown in for good measure) have, as part of the local plan process, to objectively assess the amount of housing need required in their area. As I’ve already spoken about, they weren’t given clear direction on how to do this, so many went off and did the best they could with limited information from central government. What they were given was a thorough inspection by the independent Planning Inspectorate and then the Secretary of State at the end of the process. Councils who had picked a number out of the air or used a dodgy methodology were sent away to have another go, at considerable expense.

This open ended process meant that any Thomas, Richard or Harold could, with the help of the back of an envelope, come up with what they believed to be a convincing methodology and assessment of need. On the other hand, many community groups go to significant lengths to come out with something just as detailed and intricate as the local authorities, just with a different end result. The housebuilders, unsurprisingly, often had their own ideas about how many homes were needed in an area and the resources to employ both demographers and legal representation at the Inspection. Inspectors were therefore having to consider, reflect upon and decide whether the Local Authorities version was sound, or whether someone else had come up with something better.

The system (or lack thereof) didn’t work, it created acrimony wherever it went. A large number of authorities, particularly in rural areas, simply played for time to avoid getting round to making a decision.

Councils also had to make sure that there was enough land available (effectively set aside for housing) to build the proposed new homes. But this wasn’t just their own land and indeed there are lots of landowners who would be happy to see a significant increase in the price of their land if it was designated for housing. Community groups were, by and large, less happy with development in their area and generally wanted development limited to only the most obvious places, such as brownfield land.

But planning decisions haven’t been on hold through this period and developers, as is in line with their economic interest, have been using the uncertainty and disagreements to push forward on planning permissions for sites that aren’t currently designated for housing. In actual fact, the ambiguity in methodologies and vulnerability of authorities when they don’t have a plan means precisely that developers have had more power than they would have otherwise. I’ll leave a question here for later- if that’s the case why doesn’t that mean more homes are being built?

The new proposals replace the process of each planning authority setting its own methodology with one unified way of setting the objectively assessed need. It’s still complex, but you need GCSE level algebra to understand it, rather than the highly specific postgraduate education required to understand some of the methodologies under the old scheme. It only requires statistical information that is publicly available, so anyone can double check a council’s working out.

It matters that the government have used affordability (the ratio between house prices and average full time earnings) in the area as one of the key determinators of the new numbers. In all honesty, I don’t think this is a methodology that would have passed muster with the inspectors under the current scheme. It is very definitely a very different calculation and comparisons between these and the current figures aren’t really possible. This means it’s not that the old figures were “wrong” and these are “right”, they have just been calculated differently.

The government’s proposal flat out states that this is to boost overall homebuilding across England to over 266,000 new homes a year. They’ve worked backwards from this, using household growth statistics and the affordability ratio to come to the figures they have announced. They’ve effectively distributed the 226,000 around the country based on household creation and a proxy for housing affordability.

What this way of doing it means is that the government can publish (and indeed have published) their own estimations of what this means for each local authority. It makes for interesting reading.

(I’ve had a little play with some of the information. There is a little bit of complexity with the data in that some of the authorities current needs are ranges. In these cases I have taken the higher amount, as I somewhat cynically believe this is what developers would be arguing for at appeal.)

Because of the way the government have compiled the statistics, local authority areas that have relatively low house prices and/or higher relative incomes end up needing to provide fewer houses than they may have thought. This is particularly clear where authorities have previously used employment growth as part of their methodology, as it plays no part in the new proposed calculations. Big decreases in compared to the previous plans are seen in the outer London Boroughs of Hillingdon  (2,846 a year lower) and Croydon (1,036 a year lower). Large towns and cities with growing economies and people commuting in such as Birmingham (Council- not the whole city, 837 a year lower), Oxford (854 a year lower, halving their housing need) and Leeds (1,011 lower a year) also have big reductions as employment growth is no longer a direct consideration.

The areas with major increases are mostly in London and the South East. The top 11 authorities for increases are in London, from Brent (an extra 1,029 homes a year) to Greenwich (a whopping 2,967 more homes required a year). As you’d expect, high house prices and mixed incomes seems to be the order of the day as you look at the areas with large extra allowance. It’s a quirk of the methodology that Croydon is in the areas with the biggest reductions, but neighbouring Bromley has one of the highest gains.

It’s also worth stating that there are a fair few authorities that don’t see a significant change. Around 130 authorities (out of the just over 300 that are countable) have a change that is less than a hundred homes per year, either as an increase or decrease.

Overall, there’s a mixed picture, with approaching half of the authorities actually seeing a decrease. More Northern areas are seeing an decrease and those in the South East particularly are looking at an increase. This isn’t hard and fast, but it is noticeable enough when you look through the list. So we have to ask if trying to push more and more homes into a limited space in the South is a sound policy, especially when compared to working harder to rebalance the economy so demand is more spread through the country.

But what does this mean for housebuilding? Well, local authorities will still have to allocate sites to meet this new housing need. This is still going to lead to upset amongst local communities and it may fracture joint working between community groups. Under the proposals there would be no way they could work together to claim the OAN is wrong. It’ll be a case of which land should be allocated. The residents of Petertown and nearby Paulville will be in competition to avoid housebuilding in their patch, not working together.

But even then, if land allocations and planning permissions go through the roof, does that mean we’ll see new housing?

My short answer is no. Planning permission in England is a right, not a responsibility. Buying a book doesn’t mean you have to read it. Gaining planning permission doesn’t mean you’ll build homes immediately on a site. Other countries do it differently and I wonder if we should be more willing to look at what has evolved elsewhere, rather than tinkering at the edges of our own system.

Back in the bookshop, you might find there’s an offer on and buy quite a few of the larger tomes. You won’t worry that you can’t read them all at once, they can sit on the shelf until a time of your choosing. Similarly, get the principle of development agreed for a site and you can sit on it for as long as you like, until one day, when the time is right, you can cash it in.

Indeed, there’s plenty of reasons housebuilders don’t build at the rate the country needs. Some of them are wholly justified- land remediation, skills shortages, capacity of the individual company and whole sector.  Anyone looking to develop the site would have these issues.

Some of the reasons are totally logical and rational from the point of view of the company- they want to maximise their profits, they want a long term pipeline of developments so they can plan ahead, they bought when there was a sale to be had and will build when the price is right.

To put it another way, land supply is a factor of housing supply, but it isn’t the only one. With relatively few very large housebuilders the housing market looks nothing like the “perfect” competition found only in economics textbooks. This means an increase in a factor of production won’t necessarily mean anything to the amount of new homes actually brought to market. Housebuilders control the supply and housebuilders have a significant incentive to keep prices high in order to maximise their profits. What about this change is going to affect that?

What’s more, because house prices are part of the proposed calculation, by building slowly and keeping prices high they will be able to keep the floodgates of planning permission open. I’m not saying this will make a massive difference, but this change tips the balance even further towards the developers.

The need to actually build homes discussed, at length, in the government’s White Paper from earlier this year.  The White Paper sketched some minimal ways of trying to do something about the issue, including using applicant’s track record on similar sites to make a decision and some compulsory purchase powers for councils to use when sites are stalled. These ideas, as minimal as they are, are not included in the current consultation and it will be interesting to see if they think they can bring them forward at the current time. The consultation does ask for ideas for what they can do to achieve this, so feel free to tell them!

These are still proposals and up and down the country there are going to be some elected members, community groups and individuals, many of them Conservatives who won’t be happy about it. Pressure, both formally through the consultation process and informally at constituency meetings and in Westminster will add up. How likely you think this is actually going to happen depends on how likely you think the current government can push through changes that alienate their own base. If it falls and we are back to square one, we are back with the messy, frustrating and endlessly complex system of competing methodologies. It seems to be risking a lot on a low chance of success.

So, for me, it’s the sound of one hand clapping. Sorting out objectively assessed need is important and it is right for the government to resolve this. But trying to link it directly with new housebuilding is making the same old mistake of linking land supply and housing supply. It isn’t that simple and no-one should think it is.

It looks like they have been simultaneously too ambitious for what can be achieved by amending the OAN and not ambitious enough when it comes to other measures to actually build the homes we need. I’ll be happy if they prove me wrong.