I am today announcing the release of a consultation into proposed changes to the allocation mechanism for years 2 and 3 (2009/10 and 2010/11) of Housing and Planning Delivery Grant (HPDG). HPDG was established in 2007 to reward local authorities for improved delivery of housing and other planning outcomes as part of their strategic, place shaping role and to provide more support to communities and local councils who are actively seeking to deliver new homes. The decision to review the grant scheme follows our public commitment to monitor the grant in light of changes in economic circumstances.
Changes to the funding profile
The quantum of funding available for HPDG was set in a different economic context than where we are today. We remain committed to the short and long-term objective of increased housing supply and will continue to invest significant sums through HPDG for local authorities who deliver more homes, with funding doubling from £100 million in year 1 to £200 million in year 3. In addition, there will no longer be a capital element to the grant. However, current economic conditions have created new priorities both for Government and local authorities; we have therefore taken the decision to scale back the increase in HPDG and focus on delivering real help to the people who need it—and so have halved the rent increases facing council tenants this year.
Proposed changes to the allocation mechanism
We are also consulting on changes to the way the grant is allocated to ensure it recognises current challenges and encourages positive action by local authorities to facilitate recovery. Key reforms being proposed are:
To reduce the threshold of net additional homes needed to qualify for the housing element in year 3 in recognition of the more challenging conditions in the housing market.
To introduce additional eligibility requirements for demonstrating land for housing in order to reinforce existing requirements in planning policy statement 3 and increase confidence in the land supply position across the county.
To increase the percentage of the planning element awarded for demonstrating land for housing in year 2 in recognition of the importance of land supply in supporting development.
We are also consulting on proposals for an additional HPDG element in year 3 specifically to incentivise the delivery of affordable housing.
Meaningful community involvement is an integral part of the planning system. The White Paper “Communities in Control: Real People, Real Power” announced up to £4 million additional funding for local planning authorities to promote community participation in planning. This funding is in addition to HPDG; however, we propose to use the HPDG mechanism to distribute this additional funding. The proposed allocation criteria would support those authorities whom we would expect to be undertaking significant community engagement work, either in developing their core strategy or delivering high levels of new housing, and who have already identified community empowerment as a priority for their overall performance.
A copy of the consultation document has been placed in the House Library and is available on the Communities and Local Government website at: