Liberal Democrat Councillors on Dacorum Borough Council send an Open Letter to MPs Protesting about Housing Target Calculations

December 29, 2020 11:50 PM

All of the 18 Liberal Democrat Councillors on the Conservative-run Dacorum Borough Council have sent an Open Letter to the Rt Hon Sir Mike Penning MP for Hemel Hempstead and to Gagan Mohindra MP for South West Hertfordshire.

housingIn it they point out that the housing target which the Government is imposing on Dacorum Borough is based on 2014 housing estimates instead of the more up-to-date 2018 estimates. The consequence of using these outdated estimates instead of the latest ones, is to inflate housing targets across Hertfordshire as a whole by nearly 20%, with a similarly anomalous increases for for Dacorum, Watford and Three Rivers.

They ask their two MPs to take the matter up with the Minister and ask for the latest and more accurate estimates to be used instead of figures that are 4 years older and correspondingly less reliable.

The text of the letter written on their behalf by Cllr William Allen, who is one of the 3 Liberal Democrat councillors representing the Boxmoor Ward is as follows.

Sir Mike Penning MP and Gagan Mohindra MP, House of Commons, London SW1A 0AA

23rd December 2020

Dear Sir Mike and Mr Mohindra

I write to you as one of the constituency MPs covering the Borough of Dacorum. I write on behalf of the Liberal Democrat Group of Dacorum Borough Council to enlist your support in addressing the absurdly high housing target set for the Borough.

We note with interest the publication on 16th December of the Ministry of Housing, Communities and Local Government's (MHCLG) Consultation Outcome entitled on GOV.UK Government response to the local housing need proposals in "changes to the current planning system." This brought the welcome news that the most recent algorithm underpinning the 'standard method' for determining local authorities' house building targets, which it describes as a "mutant algorithm", will be replaced by a return to the previous algorithm applied by MHCLG, which applied a 40% cap on adjustments. Inter alia, the rationale for this reversal of policy is stated as:

  • "…in some places the numbers proposed by the standard method [aka 'mutant algorithm'] pose a risk to protected areas and Green Belt";
  • "…giving a new generation the chance to access the homes they deserve." and
  • applying "a 35% uplift to the post-cap number generated by the standard method to Greater London and the local authorities which contain the largest proportion of the other 19 most populated cities and urban centres in England."

We applaud all three of these endeavours and wish Dacorum to play its part in solving the housing shortage, particularly for local young people who cannot afford houses or experience long waits on Dacorum Borough Council's (DBC) housing list. We feel returning to a capped standard method in conjunction with the 35% uplift for the 20 largest cities can help achieve the three intentions listed above. Reverting to the ONS housing needs projections of 2014 instead of the most recent ONS projections dated 2018, however, makes absolutely no sense. This approach:

  1. is based on using out-of-date data which is indisputably flawed practice;
  2. in some respects fails to achieve the intentions listed above and;
  3. creates some perverse outcomes, particularly for Hertfordshire

In our own district of Dacorum, rather than working to reduce pressure on Green Belt, the new approach has actually increased pressure on Green Belt on the edge of the Chilterns Area of Outstanding Beauty. As shown in the table below Dacorum will now see the housing target go up even higher. This target of 1023 is compared to an ONS projection that has halved to 355 and a current local plan requirement of 430 houses a year.

ONS projection of housing need

Target after adjustment by MHCLG algorithm

Original Standard Method reintroduced on 16/12/20

730

(2014 data)

1023

New Standard Method (aka 'mutant algorithm') abandoned on 16/12/20

355

(2018 data)

922

The application of the Original Standard Method and 2014 ONS data will apply a perverse penalty to Hertfordshire. Applying the government's data as analysed by Lichfield's (www.lichfield.uk) following the Consultation Outcome referred to in the first paragraph, Hertfordshire's housing target increases by 19% whilst all the other Home Counties' targets are reduced ranging from Surrey -6% to Sussex -23%.

More than this, Dacorum's housing target of 1023 houses a year is higher than four of the twenty most-populated cities that MHCLG has stated should have increased targets to relieve pressure from the greenbelt. These are: Hull (new target: 536), Plymouth (623), Reading (876) and Wolverhampton (1,013). How can it be that a district which is not considered worthy of an inter-city train service, a fully-functioning hospital or a sizeable arts venue is expected to carry a burden not expected of major cities?

We appeal to you to raise the following flaws in the government's approach to house-building until it devises an approach that provides sufficient affordable housing without causing unnecessary pressure on the Green Belt.

Flaws in principle

The government continues to apply the rationale of supply and demand in determining where new houses are built. However, the housing 'market' is a distorted one for several reasons:

  • Foreign purchases of property in London as a long-term investment and the use of housing stock by landlords for profit distort the supply and demand mechanism for identifying the equilibrium price for people buying homes.
  • No district is a closed market; building houses close to London stimulates demand and draws new commuters into areas near London. This does not, therefore, provide housing for local people needing homes.
  • The supply of new housing by developers does not necessarily increase the housing stock for local people that need homes. Developers' desire to maximise profits necessarily leads them to wish to build high value houses in high value areas. This fails to provide affordable housing and does not meet the needs of people on local authority housing waiting lists. Successful achievement of the second bullet point on page one requires strong definitions of affordability, a commitment to social housing and much higher targets for both to be built.
  • Unlike goods and services, the achievement of 'market equilibrium' has far-reaching and irreversible consequences. Once built on, Green Belt cannot be recreated. Once expanded, communities cannot be reshaped.

Failures of the new approach to achieve stated objectives

  • Six of the 20 most-populated cities do not see any increase in housing target so, the revised approach does not seem to fully take into account changes created by Covid (ie more city centre space created by declining high street and increased home working).
  • The increased targets for Hertfordshire, South Essex, East Berkshire and parts of Surrey and Kent compared to the reduced targets for other areas of the Home Counties suggests that the Green Belt further from London is being protected at the cost of the Green Belt closer to London. With London's target remaining unchanged, this shows that the revised approach fails to meet its intention that "The increase in the number of homes to be delivered is expected to be met by the cities & Urban centres themselves, rather than the surrounding areas."

Challenges in how planning targets are applied to Dacorum in practice

Dacorum is under greater pressure for development for two main reasons:

  • Any mathematical approach that compares average house prices in an area with average earnings in an area is fraught with difficulties in a commuter area where the house prices are boosted by the inflated earnings of commuters. Affordability in Dacorum needs to take this into account.
  • ONS housing projections are based in a large part on the proportion of housing occupied by residents aged 75 and over. Dacorum scores very highly in this respect because the New Town of Hemel Hempstead was populated fifty plus years ago by people who now fall into this age group.

So, for all the reasons above, I request that you require MHCLG to:

  1. apply the capped standard method to the latest (2018) ONS projections for Dacorum;
  2. apply a more nuanced approach to housing, which fully takes into account market distortions, COVID developments and the role planning (rather than development) needs to play to successfully 'level up' nationally and provide affordable housing locally;
  3. require authorities to set more ambitious targets for affordable housing and apply robust and effective approaches to affordability and
  4. develop a more equitable approach to minimising pressure on the Green Belt.

I look forward to hearing from you.

Yours sincerely,

Cllr William Allen

(on behalf of the Liberal Democrat Group of Dacorum Borough Council)

Cc Andrew Williams (Leader, DBC); Claire Hamilton (CEO, DBC);