Shropshire Council is right to face down government and developers on affordable housing rules (updated)

Update 7 June 2015 – Shropshire Council statement

A few days ago, Shropshire council issued a statement on the appeal decision (below). The council said:

A recent appeal decision… unexpectedly considered and commented on the Councils position which has since been widely propagated as a defining judgement. This is arguable and these are overly simplistic and subjective views on a decision where the Council had not provided detailed narrative, evidence or reasoning as the applicant had agreed to the Affordable Housing Contribution and was not challenging the Council on this particular issue.

The Council considers therefore that although this is an important case, it is not a binding precedent and it is a potentially flawed decision against which the Council is considering a formal challenge. As a consequence, the Council’s current position, based upon a robust policy position endorsed by Cabinet, will continue.

Update 29 May 2015 – inspector rules against affordable housing

Last year the government changed planning rules so that housing developments of up to ten homes no longer have to pay a contribution towards affordable housing. Shropshire Council, quite rightly my book, decided to defy the government decision, saying local rules take precedence (see below). Now there has been a setback. Deciding an appeal for five homes in Shrewsbury, planning inspector Tom Cannon ruled that no affordable housing was required under the government’s policies. This was an odd decision because affordable housing was not a matter of dispute in the appeal and the developer had already signed an undertaking to pay up as required under the council’s rules.

Across Shropshire, 92% of housing planning applications are for ten units or less. If this inspector’s unasked for opinion is rolled out across the county, our future affordable housing supply will be devastated. The council is considering options for a legal challenge to the inspector’s decision.

Update 27 February 2015 – ministers tighten rules

Today the communities department changed national planning practice guidance to emphasise that the affordable housing exemptions are national and ministerial policy. It’s a move that’s bound to make it harder for local councils like Shropshire to claim their local policies take precedence over ministerial dictats. This move may not have been targeted at Shropshire specifically, but it looks like the big boot of central government has kicked away on our county’s ambitions for affordable housing. Nine in ten of our developments in the county are for less than ten dwellings. We will have to wait and see if any of these will now be required to pay an affordable housing contribution. We may only find out when a developer takes the council to court.

Main Article – 8 February 2015

Shropshire developers have written to government ministers to try to overturn our county’s affordable housing policies. These developers don’t want to pay anything towards affordable housing when they build small developments. Shropshire Council is holding its ground despite the diktats of ministers. It is right to do so.

Towards the end of last year communities minister Eric Pickles announced that housing developments of less than ten dwellings would no longer pay towards affordable housing (providing their combined floor area is less that 1000 sq metres). In his populist style, he declared that affordable housing contributions (S106 payments) are a “stealth tax” on small builders. He argued the payments were holding back housebuilding.

Not for the first time, Eric Pickles shows he is out of touch with reality and the pressing needs of rural communities like ours. His move will launch a bonanza wave of executive homes across rural counties like Shropshire. It will do nothing towards providing a place to live for the many people who work in this county, have limited means and need somewhere decent to live.

Fortunately, Mr Pickles’ fellow Conservatives on Shropshire Council have recognised the folly of his new policy. Across Shropshire, 92% of housing planning applications are for 10 units or less. The affordable housing contributions paid here in Shropshire are among the lowest in the country (10-20% of the development budget; see map). If the new government policy was to apply to housing development in this county, our already limited supply of new affordable houses would dry up.

At the end of January, Shropshire Council issued a statement that said our local policies on affordable housing will take precedence over those of the government. That was a brave move.

Our main planning document for the county is known as the Core Strategy. Policy CS11 says “all new open market housing development [must make] appropriate contributions to the provision of local needs affordable housing.” The accompanying Type and Affordability of Housing Supplementary Planning Document (SPD) set out the details. In its January statement, Shropshire Council said it would give full weight to CS11 and the SPD. That means:

The council will continue to seek provision of on-site affordable housing and/or affordable housing contributions for all residential developments of 10 dwellings or less within the Shropshire area and will continue to require developers to enter into S106 agreements for this purpose.

In other words, the council has decreed that local policies overrule national instructions from the like of Eric Pickles.

I have said that this move is brave. It is also controversial. A group of 17 Shropshire developers have written to planning and housing minister Brandon Lewis to object to the move which they say is a “peremptory rejection” of ministers’ guidance. The developers argue:

What the council is not accepting is that in the planning hierarchy, it is for the Secretary of State to decide what the overarching policy is, and in a matter as important as housing, any attempt to rely on an old development plan is surely paying no more than lip service to the leadership of the ministers.

The developers are asking Brandon Lewis “to intervene as a matter of urgency, and advise Shropshire Council accordingly on implementing your advice.”

This looks set to be a classic battle between localism, which the coalition government championed in its early years, and centralism, which is the way that Eric Pickles and his ministers have too often operated of late. It is a battle between government by central diktat or by local decision making.

I fully support Shropshire Council’s decision to oppose the government’s rules on affordable housing contributions. I am a localist through and through. It is for the government to set out the overall framework for planning and housing, but it is for local authorities and communities to write the rules under which local housing schemes and other developments are delivered. That’s the way our planning system is meant to work, by local consent, not according to the political whims of ministers.