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4. CONCLUSIONS AND RECOMMENDATIONS
4.1 Following on from the preceding sections of this report, we consider that there are a number of improvements that can be made to the HLA process to make it a more effective tool for more accurately monitoring housing land supply locally and ensuring consistency of output format to allow for compilation and effective monitoring at a national level.
4.2 Our research shows that the predictive accuracy of a sample of HLAs from 2001 varied greatly, and that a significant proportion of HLAs were inaccurate to a degree that would cast doubt on their value as a monitoring tool. Our research did not have the scope to be able to establish the specific reasons why some HLAs proved to be more accurate than others, although we have been able to establish a number of factors which we consider are likely to have a significant influence.
4.3 This section of the report therefore contains a series of recommendations which set out to achieve a more effective auditing process.
4.4 Given the complexity of the subject, however, we believe that there would be considerable merit in further liaison between key stakeholders to allow consideration of these recommendations as well as additional issues that might be raised. At present there is no formal mechanism for stakeholders to identify and exchange information on best practice methods, and our first recommendation is therefore to establish such a group.
Recommendation 1
Establish a best practice working group on HLA preparation and presentation.
4.5 As indicated throughout this research report, Councils adopt varying HLA methodologies and output formats. The following recommendation therefore proposes a consistent approach by all Councils. This should ensure adoption of best practice and allow for collation and monitoring on a consistent basis nationally.
Recommendation 2
Adopt a common content and presentation format for all HLAs
( Appendix 13a & b suggested templates for site and collated summary information).
Risks
- Need for additional resources in some Council areas
4.6 As identified in paragraph 2.3 of this report, Scotland's HLAs have varying 'snapshot' base dates. This means that it is not possible to collate national information at a common point in time, which may hinder effective monitoring. We therefore recommend that all HLAs have the same base date.
Recommendation 3
Adopt a common 'snapshot' base date for all HLAs.
Risks
- Short-term inconsistencies may arise e.g. with a Structure Plan base date. It may be necessary in some areas for two HLAs to be produced in a single year for a period of time.
- Consultees will be required to provide information at the same time across all areas of the country. This may require additional resourcing by house-builders and Homes for Scotland. But this could be mitigated by the single date providing a focus for all involved, which could lead to greater availability of all stakeholders.
4.7 As indicated in paragraph 2.4 of this report and Appendix 4, most HLAs take 6 months or longer to update. Many take longer than 9 months. As a consequence, the information presented can be out of date. Most of our interviewees agreed that a quicker process would be desirable, and might be achieved through more effective project management and greater responsiveness from consultees (particularly house-builders).
Recommendation 4
All HLA updates are to be completed within 6 months.
Risks
- Additional resources may be required within Councils and Homes for Scotland.
4.8 Related to the above recommendation, and as described in paragraphs 3.21 - 3.24 of this report, the Councils consulted expressed the concern that house-builders and Homes for Scotland can be too slow in providing information and that sometimes the information is not sufficiently comprehensive. In our view, there may be too much emphasis placed by some Councils on Homes for Scotland to act as a conduit for information, and that the process could be quicker if there is direct contact with individual house-builders/landowners. The success of such an approach still relies, however, upon these parties providing sufficient information within reasonably short timescales. We would suggest that this is more likely to occur if there is government guidance compelling such input.
Recommendation 5
Individual house-builders/landowners should be given more responsibility to provide comprehensive base data directly to Councils. This could be achieved through clear guidance on expectations in respect of data required (e.g. pro forma information requests - see Appendix 11).
Risks
- Dependent on house-builders/landowners giving greater priority to the process.
4.9 Our research indicates that there are different interpretations of the term 'effective housing land supply'. Some take it to be restricted to a 5 year period, which means, for example, that parts of larger sites that take longer than 5 years to develop are not considered to be effective. This has led some Councils to introduce the concept of 'potentially effective' housing land. Some house-builders, on the other hand, consider that such sites are constrained. In our view this results in unnecessary dispute, and we suggest that the Scottish Government gives consideration to reviewing the guidance on this matter.
Recommendation 6
The Scottish Government to give consideration to reviewing the definition of 'effective housing land supply'.
4.10 As considered in paragraphs 3.4 - 3.8 of this report, there is evidence that HLAs have had a tendency in the past to over-estimate house-completions. One reason for this may be that some housing sites that are agreed as effective are not in fact developed. In this regard, our research has established that although HLA stakeholders are generally content with the criteria identified as determining effectiveness in PAN 38 (paragraph 29), there are concerns (particularly amongst house-builders) regarding the interpretation of these criteria. Although a somewhat generalised conclusion, it tends to be the case that Councils assume that sites will be available for development unless there is evidence to the contrary. House-builders, on the other hand, tend to consider that there should be positive evidence that the site will be developed in order for it to be effective. Given the historical evidence that HLAs are more likely to over-estimate house completions rather than under-estimate them (albeit based on a limited sample of HLAs), one might consider that the onus of proof should be towards demonstrating site effectiveness, and that if such evidence is unavailable then sites should be deemed to be constrained.
4.11 A second factor that may influence the over-estimation of house completions is the approach to programming (see paragraphs 3.19 - 3.20). Generally, Councils will seek guidance from the developer in respect of yearly completion rates, but our research indicates that responses can be based on ambitious business plans which perhaps fail to take account of the numerous (and sometimes unexpected) factors that can delay progress on development. We therefore suggest that there is clearer government guidance on the factors that should be taken into account in determining site effectiveness and programming. Such guidance should counsel against making over-optimistic assumptions.
Recommendation 7
Issue national guidance advising on factors requiring more rigorous assessment in respect of determining site effectiveness and programming.
4.12 A further factor which might result in an over-estimation of house completions is the consideration given to windfall development (i.e. sites not identified through the forward planning process). As well as sites with planning permission or allocated in adopted local plans, PAN 38 (paragraph 26) indicates that "other land with agreed residential potential" can be considered as part of the effective supply. Our research suggests that a number of HLAs identify these 'emerging' sites as effective under this category. The potential problem with this approach is that such sites may have some way to go in terms of confirming their development potential, achieving detailed planning permission and then being developed. In some cases, therefore, it may be optimistic to assume that such sites will be developed within 5 years. In our view, there would be far greater confidence of development occurring within 5 years if the test of effectiveness for emerging windfall sites was the grant of a planning permission.
Recommendation 8
Windfall sites should only to be identified in HLAs as effective when planning permission has been granted.
Risks
- This may result in under-estimating the housing land supply, as there are likely to be some windfall sites without planning permission at the 'snapshot' base date which are nevertheless developed within 5 years.
4.13 Despite the guidance contained in PAN 38 paragraph 31, there remain some HLAs which do not identify programming for sites beyond 5 years into the future (see Appendix 8). Although extended programming will involve greater speculation, there would appear to be a good case for predicting programming for a 7 year period. As explained in paragraph 3.27 of this report, aside from providing longer-term prediction and monitoring, this allows for an assessment of the ability of a Finalised Local Plan to provide a 5 year supply of housing upon adoption .
Recommendation 9
All HLAs to identify future programming of individual sites for at least a 7 year period.
4.14 As described in paragraphs 3.34 - 3.42 of this report, the role of infrastructure providers is twofold. Firstly, their involvement in HLA preparation will be helpful in establishing possible development constraints, start dates and programming. Secondly, the agreed content of the HLA can provide up to date information on infrastructure provision expectations, potentially allowing them to allocate resources more in line with those expectations.
4.15 Our research indicates that the contribution of infrastructure providers to the HLA process is variable. In some cases there would appear to be a reluctance to become involved in what may be perceived as a complicated and time-consuming exercise. Although it is recognised that house-builders and Councils will have dialogue with infrastructure providers outwith the HLA process, there is some evidence to suggest that expectations of infrastructure provision sometimes do not materialise. In our view, therefore, closer involvement between the parties should be strongly encouraged.
Recommendation 10
Issue national guidance encouraging greater involvement by infrastructure providers in the HLA process.
Risks
- A more extensive and potentially longer consultation process for some Councils.
4.16 As described in paragraphs 3.46 - 3.47 of this report, the current approach to defining small sites and considering their effectiveness is inconsistent between Councils. For example, in some areas, small sites are not counted at all. Where they are counted, there are different definitions applied (e.g. less than 4 units or less than 5 units). There are also differences in assumptions regarding the percentage of small sites that contribute to the effective supply (e.g. 50%, 75%). It is recognised that the significance of the contribution of small housing sites to the overall land supply varies between HLA areas (e.g. rural and urban); however, for monitoring purposes there would seem to be value in establishing a more consistent approach as suggested in the following recommendation.
Recommendation 11
All HLAs to include small sites in the established supply (in summary tables if appropriate), these being defined as sites of less than 5 units. The assumed percentage contribution of small sites to the effective supply may vary, however, subject to agreements reached in individual HLA areas.
Risks
- More extensive data collection in some HLA areas.
4.17 There is an inconsistent approach between HLAs to the definition of affordable housing and the distinctions made between different types of affordable housing (see paragraphs 3.48 - 3.49). A few HLAs do not distinguish at all between affordable and private market housing, whilst others identify a number of separate categories e.g. housing association, shared ownership, council housing. In order to achieve consistency across all HLAs to allow for monitoring at national level, we suggest that it is most appropriate to define categories of affordable housing in accordance with those identified in PAN74 paragraph 11.
Recommendation 12
Affordable housing should be distinguished from private market housing in HLAs. As far as possible, affordable housing should be categorised by the different forms of provision defined in PAN74 paragraph 11.
Risks
- More extensive data collection for some HLAs areas. The type and amount of affordable housing is difficult to predict beyond 3 years, therefore, predictive value is limited.
4.18 The provision of information in HLAs on the supply of different house types (e.g. flats/houses) would also be useful in establishing how different market sectors were being provided for. Such information could assist in developing policy responses to perceived demand requirements. At present, only a few HLAs distinguish between house types, and that is generally restricted to separating houses and flats. Our research considered whether or not it would be possible to collate more refined information, such as house and flat size. The problem reported to us in this regard is that the information is very dependent on obtaining reliable information from house-builders, who themselves may not decide on their intentions much more than a year or two prior to development commencing. Nevertheless, we consider that the majority of HLAs could endeavour to provide more refined information on house type.
Recommendation 13
As far as possible, all HLAs to distinguish between house-types, particularly houses and flats. Further consideration should be given to providing more refined information on a consistent basis between HLAs (e.g. number of apartments)
Risks
- High reliance on house-builders providing reliable information. Difficult to make predictions beyond 2 - 3 years.
4.19 Our research suggests that it would be helpful if all HLAs, as many already do, could provide specific information on site development constraints and the necessary actions and timescales for their removal. This, we believe, could assist in focussing efforts on the bringing sites into the effective supply.
Recommendation 14
All HLAs should identify site development constraints and the necessary actions and timescales for their removal. For monitoring purposes, consistent nomenclature to describe constraints should be used (e.g. access, drainage, ground conditions - see Appendix 13).
4.20 Although most HLAs are now available online, there are some which are not. Clearly, comprehensive web-site availability is desirable in terms of accessibility.
Recommendation 15
All HLAs to be made available online.
4.21 As described in paragraphs 3.60 - 3.61 of this report, most of the data being collated to monitor the future housing supply will also be informative in respect of past performance. Many Councils already collate this information for their own use, but there are inconsistencies in the methods used and the information is not collated at a national level. It would therefore be useful if records of past outcomes were documented in the same format as the HLA as indicated in Recommendation 2 above. As well as providing important facts, the information could be used to establish the predictive accuracy of HLAs and appropriate responses.
Recommendation 16
Councils should prepare an audit of past housing supply performance in similar format to the HLA as indicated in Recommendation 2.
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