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The rise and fall of the Standard Method

After LPEG had set the ball rolling in 2016, the Housing White Paper, published in February 2017 broke the news that consultation on a new standard methodology for calculating ‘objectively assessed [housing] need’ would follow.

The Housing White Paper articulated a national need for 225,000 to 275,000 homes a year to keep up with population growth and to tackle years of undersupply.  When it arrived in September 2017, the new standard method summed to around 265,000 homes a year, at the top end of the White Paper range.

A commitment to raise supply to 300,000 homes a year followed in the Autumn Budget 2017, chiming with what many commentators had long argued was the national need.  300,000 did not appear to be a big stretch from a Standard Method need of 265,000 homes, the gap to be bridged by growth deals funded by new funding announced in the budget.

Roll forward to July 2018 and the Standard Method is enshrined in the revised NPPF as the basis for calculating the minimum number of homes needed and the basis for a positively prepared Local Plan housing strategy.

The revised Framework signposts to planning guidance for the detail of how the Standard is calculated, a method unchanged from the version consulted upon in 2017.  A three-step process, starting with the latest local household projection, making an uplift where the latest affordability ratio is above 4, capping to ensure the final number is deliverable.

The guidance presciently advises that the Standard Method will be kept under review, to ensure consistency with the aims of the Housing White Paper and delivering 300,000 homes a year by the mid 2020s.

Consistency catastrophically failed with the publication of the 2016-based household projections on 20 September 2018.  New projections that revealed a 50,000 household a year reduction in household growth over the Standard Method reference period.  This collapsed national minimum housing need to little more than 210,000 homes a year.

The upshot is unintended and unfortunate consequences, precipitating the very thing Standard Method was supposed to guard against - delay.  LPAs are now pausing for thought.  Some weighing up whether to seize the opportunity to row back on politically unpopular plans for housing growth.  Others looking to take stock and assess the soundness of their proposed plans, their vulnerability to challenge.  Some that have resolved to plough ahead will be conscious of any gap between planned growth and the incredible shrinking Standard Method, weighing against a smooth path to adoption.

Evidently caught on the back foot, it is positive that MHCLG has been quick to reiterate a commitment to 300,000 homes a year and that they will now consult upon a new Standard Method for assessing minimum need, to restore consistency. 

This is an opportunity to look again at geographic distribution and the link to economic growth, key shortcomings of the current Standard Method.  Much could be achieved by making the existing guidance clearer. For example, where actual need is assessed to be above minimum need, a common situation for many LPAs with recent assessments of housing need, clarifying how actual need informs whether a plan is positively prepared.

Most urgently of all, to avoid making what is now a bad situation worse, the implementation arrangements of the revised Framework should be varied.  It makes no sense that the housing strategy in plans submitted after 24 January 2019 should be examined in light of the current, deeply flawed, Standard Method.  The old guidance (for full OAHN) should stand until consultation on a new Standard Method has concluded and the finalised guidance published. 

 

James Donagh, Development Economics Director, Barton Willmore; james.donagh@bartonwillmore.co.uk