SC(3) CR-P21
Sustainability Committee
Enquiry into Carbon Reduction in Wales: Carbon Reduction via Planning.
Response from The Home Builders Federation
Please find below our comments in relation to the Sustainability Committee’s carbon reduction inquiry relating to the land use planning system. The consultation questions are set out below, with our comments following on where appropriate.
From the evidence collected in previous stages of the Committee’s inquiry into Carbon reduction in Wales, the land use planning system has emerged as a major barrier to progress in meeting the Welsh Assembly Government and UK Government carbon reduction targets. Issues raised included the time taken to complete the planning process, inconsistency in decision making and a lack of guidance to planning authorities from the Welsh Assembly Government. Many witnesses called for the planning process to act as a catalyst for carbon reduction in Wales.
Please be as detailed as possible in your answers to questions 1 and 2.
1. What particular actions do you think the Welsh Assembly Government should be taking to ensure that the land use planning system in Wales encourages greater progress towards the achievement of carbon reduction targets?
In terms of the most recent guidance on planning for climate change, we believe the WAG is correct in its approach to introduce a national standard for carbon reduction in Wales. We believe in principle that a national standard for sustainable building is more appropriate than individual local authorities attempting to set their own standards. If Wales is to tackle climate change, then we believe action needs to be taken on a national level where it can be monitored and regulated consistently, rather than with the piecemeal adoption of varying standards by individual local authorities.
In terms of the definition of zero carbon, before any requirement for zero carbon development is issued by the WAG, a suitable definition of the term must be established and agreed via a full consultation with all stakeholders with an interest in the definition. The UK Government is currently undertaking a public consultation on the definition of zero carbon development. The outcome of this consultation will hopefully provide us with a clearer picture of what zero carbon development will entail in terms of its meaning, application and implementation. Even though we are still not certain of what the final definition will be, there is a certain understanding of what mechanisms are required to meet such a standard. In this context, latest thinking is that neither planning policy nor building regulations, or a combination of both, would be sufficient to ensure that such a standard is met. The results of the consultation will hopefully provide us with a better understanding of these issue and therefore we believe it is imperative that the WAG is fully involved within the consultation and fully committed to adopting the a UK wide standard for zero carbon development, whatever that might be.
We believe that any policies or strategies created to tackle carbon reductions in new homes, must take full account of development viability. Any guidance issued by the WAG should ensure that local authorities take development viability into account when creating policies within development plans and other documents and should put the onus on the local authority to prove that development viability would not be compromised as a result of the policies they create.
For this reason we believe the WAG must ensure any policies they create are sufficiently flexible to allow either relaxation or postponement of the specified criteria or standards, where they would cause a detrimental impact on the viability of a particular development, or provide for other measures to offset this adverse impact on viability. Such measures could include financial incentives or a reduction in other contributions towards public policy objectives made from development value via Section 106 agreements. We believe it is incumbent on the Welsh Assembly Government to provide assistance to the housing market in any way possible, in order to fulfil its obligations to the people of Wales as set out within the National Housing Strategy. As a result, we believe any policies created must allow certain dispensation or support where projects would not be viable if the standards as proposed were applied.
In terms of national planning guidance, there are many policy areas the Welsh Assembly Government consider to be a priority for Wales, e.g. affordable housing, climate change, education etc. The HBF fully understands the WAG’s needs to fulfil its obligations on all policy areas in Wales, however, we believe the Assembly Government needs to be realistic about the ability of home builders and other developers to finance from land value the totality of such aspirations and objectives, particularly in light of the current economic climate. In this respect, we believe the WAG must set 'policy priorities’ in order to deal with situations where external factors, such as development viability, might impact on their ability to deliver on those policy aspirations. At present, finances are critical to our members and the effects of the credit crunch have been felt severely throughout the housebuilding industry in Wales. It is a fact, particularly in the current climate, that in many cases finances for development will be severely limited and therefore the WAG needs to make a decision on the area of national policy it considers to be a priority, and where the need for compromise is required. In this respect, if the national policy on Climate Change is to take priority, the WAG must make clear that this policy would override other policy objectives if collectively they could not all be supported from land values. If this policy is not to take priority, the WAG must clearly state the hierarchy of policy objectives that would be applied, in the event that their implementation would render a particular development unviable.
In terms of the WAGs commitment to realising their policy objectives and achieving carbon reductions from new homes, we believe there needs to be an increase in training for local authorities in Wales on the most appropriate way to implement any national policies that are created. It is imperative that national policy is impelementable on the ground and that local authorities have the necessary skills and knowledge to ensure the policies they are adopting are realistic and achievable. In this respect, it was highlighted by the work of the Sustainable Development Commission that local authority planning officers do not feel they have the skills to implement and enforce more ambitious and complex planning policy in relation to climate change. Therefore, the WAG must ensure all local authorities are fully aware of what is required to properly implement and enforce any national policy on climate change/carbon reduction and are provided with the necessary training where skill shortages have been highlighted.
2. What particular actions do you think the Local Planning Authorities in Wales should be taking to ensure that the land use planning system in Wales encourages greater progress towards the achievement of carbon reduction targets?
We have already discussed the need for planning obligations to take account of development viability above and we believe this applies equally to local authorities as it does to the WAG. Local authorities need to ensure that any policies requiring increased standards for carbon emissions are viable and deliverable on the ground, if such policies are to be implemented properly. Ultimately, the success of a planning policy will hinge on its ability to be implemented. In terms of policies for carbon reduction in new dwellings, local authorities must ensure that the requirements of the policy will not have an adverse impact on development viability, in order for objectives of the policy to be successfully achieved. If the aim of the policy is to create new homes or communities with lower carbon emissions, the policy needs to be successful in both those areas i.e. creating new homes and communities AND reducing carbon emissions. Policies that are overly onerous or inflexible in terms of their requirements for carbon reduction will almost certainly have an adverse impact on development viability, which in turn will hinder the delivery of new homes. As a result, local authorities need to ensure they are fully aware of the limits of what they can realistically request from developments, before these requirements are translated into planning policies within local development plans.
We have discussed the requirement for the WAG to set 'policy priorities’ above. In this context, we also believe it is imperative that local authorities set policy priorities for each area within the council and that each council department is fully aware of these priorities and what they can expect in terms of planning obligations. In order to speed up the planning application process and to ensure policies are deliverable on the ground, it is essential that process of requiring planning obligations does not become an incremental or open-ended 'wish list’ of what each council department believes it is entitled to. In relation to policies dealing with carbon reduction, work the Federation has been involved with suggests that adding such requirements to the cumulative effect of other planning obligations on a development site is often enough to render the development unviable. It this transpires, it will have an adverse impact on the ability of a local authority to deliver new housing with lower carbon emissions. As such, it is essential that each local authority makes a decision on which policy areas it considers to be a priority and to ensure its policies are flexible enough to allow policies with a higher prioritization to take precedence when the need arises.
Local planning authorities should engage fully with the housebuilding industry at the earliest possible instance, in order to ensure any policies related to carbon reduction will not impact on the viability of the development proposed and the achievement of wider policy objectives. We believe that encouraging early pre-application discussions will provide the council with the best possible chance of successfully implementing any policies requiring carbon reductions in new homes. It will also help to speed up the planning application process and provide certainty and confidence to those involved.
Local planning authorities can also support the successful delivery of carbon reduction by planning positively for the provision of low and zero carbon sources of energy supply in their areas. A particular way in which local authorities could add value is to facilitate planning permission for local or community-scale renewable energy facilities. Facilities of this size and capacity will provide the most cost-efficient means of decarbonising the energy supply at local level - being a more cost-effective means of saving carbon measured in terms of £s per tonne of carbon saved than very small-scale renewables. Such community-scale facilities can also serve existing homes and businesses as well as new development, thereby bringing a much more wide-ranging benefit for the area.
"The Committee recommends that, through a Ministerial Interim Planning Policy Statement (MIPPS), the Welsh Assembly Government require developments of over 5 dwellings and all commercial developments to produce at least 10 per cent of their energy requirements through on site renewable energy or local decentralised sources.”
"The Committee recommends that, through a Ministerial Interim Planning Policy Statement (MIPPS), the Welsh Assembly Government require developments of less than 5 dwellings to reduce their predicted CO2 emissions by at least 25 per cent based on current building regulations through improvements to the energy performance of buildings, and/or the efficient supply of heat, cooling and power.”
"The Committee recommends that the Welsh Assembly Government revises Planning Policy Wales and the associated guidance to strengthen the requirements for local authorities to include policies aimed specifically at carbon reduction in their Local Development Plans.”
In July 2008 the Assembly Government issued a Planning for Climate Change1 consultation paper seeking comments on possible planning policy including the following areas: -
The use of sustainable building standards to drive up the sustainability of buildings in Wales;
The incorporation of local renewable and low carbon energy sources in new developments to reduce carbon emission, and; the ability for Local Planning Authorities (LPAs) to set higher standards in the above areas for strategic sites.
1. What are your views on the Assembly Government’s revised proposals for planning for climate change? In particular, do they go far enough in implementing the previous recommendations of the Committee?
Recommendation 1 - "Developments of over 5 dwellings and all commercial developments to produce at least 10 per cent of their energy requirements through on site renewable energy or local decentralised sources.”
The original consultation contained proposals to deal with the requirement for low or zero carbon technologies. The proposals stated that, in addition to the carbon reductions secured as a result of reaching Code for Sustainable Homes Level 3, all developments over 10 units should provide 10% of their energy requirements from renewable sources. Within our response to the original consultation, we considered this policy approach to be inappropriate and our comments would be even more pertinent with regard to the Committee’s recommendations.
The whole ethos behind the Code for Sustainable Homes is that developers can chose the most appropriate way to achieving particular levels of carbon reduction at any of the Code levels. There is a common acceptance that the priority is to maximise energy savings through the fabric of the building, where such savings will be a permanent feature of the property. The policy as proposed also assumes that in all cases, renewable energy generation on the individual home or site represents the most effective method of reducing CO2 emissions at any given location in Wales, when this is clearly not the case. Many renewable energy products remain largely untested in terms of their application, durability and efficiency and the operation of many will also be impeded by landscape, topography and location, of which housing developers have little or no control. In addition, the UK Climate Change Committee has recently pointed out in its initial recommendations for the first UK carbon budgets that such very small-scale solutions are not cost-effective compared to larger-scale facilities per tonne of carbon saved. Other issues to be considered include the long term maintenance of these products and the associated costs for the householder. As a result, we believe the introduction of this policy might lead to sub-optimal design and cost solutions, particularly in areas where it might be more difficult to take advantage of renewable energy production.
We also believe this policy would have a detrimental effect on the viability of developments, due to the high costs involved in incorporating renewable energy technologies onto development sites. This is particularly relevant in view of the current market climate. The requirement to purchase extra land for the installation of near-site renewables and the cost/benefit ratio of many technologies available at present (e.g. photovoltaic cells, ground source heat pumps etc), could have a detrimental impact on the viability and deliverability of developments, given the downturn in land values experienced across Wales. There is no evidence to suggest that the installation of these technologies would result in any increase to sale price of properties, nor is there any evidence to suggest that mortgage lenders would look more favorably on purchasers wishing to borrow money against properties with renewable energy technologies fitted. Therefore, we believe this policy approach is likely to produce an adverse effect on the delivery of new homes throughout Wales, which would counteract its purpose and the Assembly Government’s aspirations for housing in Wales.
Nor does the proposed policy make reference to how it would be monitored and how it would take account of householder behavior. We believe it would be extremely difficult to effectively monitor that each home would actually be achieving 10% of its energy from renewable sources over the lifetime of the building and that householder behavior is monitored to ensure the 10% renewable quota is continually being achieved. Unless the WAG or each local authority has the appropriate mechanisms in place to monitor every property on each development to ensure that 10% of the energy is being delivered from renewable sources, over the lifetime of the building, then the policy would not be fulfilling its objectives in contributing to Wales’ CO2 targets. We believe that with this type of policy, it is not sufficient to merely require technologies to be included on developments at the construction or design stage. The operation of the policy lies more with the careful monitoring and regulation of the household and householder over the lifetime of the building to ensure the technologies are serving their purpose which raises major issues about social acceptability. There is nothing within the policy to describe what mechanisms will be put in place to ensure the local authority will undertake such monitoring or regulation and therefore, we believe the policy as it stands is unsound and incapable of being fully implemented in order to achieve its desired outcomes.
Recommendation 2 - "Welsh Assembly Government require developments of less than 5 dwellings to reduce their predicted CO2 emissions by at least 25 per cent based on current building regulations through improvements to the energy performance of buildings, and/or the efficient supply of heat, cooling and power.”
The original consultation proposed that all developments over 10 units should be built to Code for Sustainable Homes level 3. Within our response to the original consultation we commented that the proposals did not take proper account of development viability and our comments would be even more pertinent with regard to the Committee’s recommendations.
As discussed above, finances are critical to our members at present and the effects of the credit crunch have been felt severely throughout the housebuilding industry in Wales. As a result, we believe that this would not be an appropriate time to introduce a specific standard or target, as such a policy approach would cause an increased financial burden on our members which in turn could jeopardise the delivery of future housing schemes in Wales. In this context, we believe it is important to emphasise the fact that the financial crisis faced by our members at present is having a significant impact on the delivery of homes in Wales. With property and land values continuing to fall, unless the appropriate action is taken by the Welsh Assembly Government to mitigate the effects of the credit crunch, we believe the situation may continue to deteriorate throughout 2009. In terms of the Committee’s proposals, we believe it is important to point out that any increase in regulation will have an adverse effect on the delivery of homes unless it is properly considered against development viability and its ability to add value to property at the point of sale. In terms of the former, these issues are discussed at length above. In terms of the latter, there is no evidence to suggest that an increase in Code for Sustainable Homes levels will add significant value to a property, nor is there any evidence to suggest that lending institutions will look favourably on such properties and relax their ever increasing strict criteria for mortgage lending. As a result, we believe the proposals within the original consultation and moreover the Committee’s recommendations, would place significant burden on the delivery of new homes in Wales in the short term, which would do little to ensure the objectives of the policy are met.
In terms of the timescale set by the original proposed policy, we believe it would not be appropriate to increase regulation and burden on housing developers in Wales as early as 2009, especially at a time when many housebuilders are facing, and may continue to face, very challenging financial conditions. As discussed above, we believe that without proper mechanisms within the policy for consideration of the economic viability of future housing developments in Wales, many local authorities would not be able to implement the policy as proposed. This would therefore render the policy inadequate and unsound. It is essential that policies, particularly national policies, are sufficiently flexible to cope with the changing circumstances, clear in terms of their guidance and purpose, and realistic in terms of their application. Without such characteristics any policies adopted will impede, rather than accelerate the realisation of the objective they are designed to achieve.
Recommendation 3 - "The Welsh Assembly Government revises Planning Policy Wales and the associated guidance to strengthen the requirements for local authorities to include policies aimed specifically at carbon reduction in their Local Development Plans.”
We disagree with this recommendation as we believe it would be more appropriate for the Welsh Assembly to set a national target for the reduction of carbon emissions in Wales. The goal of reducing carbon emissions is not merely a Wales-wide or UK-wide goal, it is in fact a world-wide goal. As a result, we believe it would be far more appropriate to tackle the issue from a national basis, rather than a local basis. In addition to this, having a national policy approach provides certainty that Wales is moving as one towards a recognised goal in terms of tackling the effects of climate change. If the powers were left to individual local authorities to devise their own climate change policies, there would be likely to be large discrepancies across Wales with regard to the levels of change each policy would require. This ad hoc approach could lead to situations where local authorities require higher unrealistic targets, which could have an even bigger impact on development viability and ultimately the overall success of efforts to reduce carbon emissions. In addition to this, there might also be situations where local authorities would request a lower target, if they do not consider themselves fully equipped to justify the current (or a higher) target. This would have serious consequences for the WAG in terms of reaching the national CO2 reduction targets set out for Wales. We believe this scenario would be not be uncommon, considering the evidence collected by the Sustainable Development Commission identifying the lack of skills in this policy area across local authorities in Wales.
"The Committee recommends that the Assembly Government reviews the application process for installation and use of low carbon technologies in residential buildings with a view to simplifying and accelerating the process.”
1. What changes to the planning system are needed to ensure that low carbon technologies are introduced more extensively into residential properties in Wales?
Considering our comments above, we believe there is a major issue with the reliability, durability and functionality of many of the renewable technologies currently available, which needs to be tackled before the planning application process is altered to allow such technologies to be fitted to residential properties more easily. For instance, small wind turbines for individual homes are often largely ineffective in producing enough energy to be technically or cost effective. The location of developments can in many instances render them inoperable, especially in relation to town and city developments that have little exposure to wind. Photovoltaic Cells can be effective if used in the proper manner, however, in order to create an effective system with significant impact the cost can be prohibitive. Considering this, we believe that before the planning system is changed, the priority should be to ensure a robust testing regime is introduced with a view to the accreditation of such technologies in relation to relevant performance criteria and standards. It is essential to allow sufficient time to progress and improve these technologies, before any proposals are considered to simplify their implementation, in order to ensure they become a real and effective substitution for current energy generation.
At present regulatory and market rules for the energy sector do not support or incentivise sufficient investment from mainstream energy providers and others in the provision of energy from renewable sources. This is a significant issue because in order to reach levels described within the Code For Sustainable Homes that represent zero carbon development, energy production from on-site renewable sources will often not be sufficient or necessarily appropriate. The WAG is currently considering the use of schemes such as feed-in tariffs, in order to create incentives for people to install renewable technologies and to make their operation more efficient and effective. We believe the WAG should conduct further work and research on initiatives such as these, in order to provide a more viable and stable basis for the introduction and application of renewable energy technologies.
Notwithstanding the comments above, even though we accept that on-site and near-site renewable energy solutions to carbon reduction have a role to play when they are technically and commercially viable, we believe the planning system in Wales should place more emphasis on strategic sites for renewable energy, which will also provide benefits to the existing stock throughout Wales in terms of reducing carbon emissions.
"The Committee recommends that the Welsh Assembly Government should urgently revise its statutory planning guidance for local authorities to ensure that proposals for development are not permitted where adequate public transport cannot be provided.”
Reducing greenhouse gas emissions and other environmental impacts;
Improving public transport and better integration between modes;
Improving links and access between key settlements and sites across Wales and strategically important all-Wales links;
Enhancing international connectivity; and Increasing safety and security.
1. What needs to be done to ensure better co-ordination between land-use planning and transport planning?
No comment at this stage.
2. Does the Welsh Assembly Government’s new transport strategy, One Wales: Connecting the Nation give sufficient emphasis to this issue?
No comment at this stage.
3. What are your views on the current and proposed planning regimes for the consideration of large-scale energy projects in Wales?
As stated above, we believe the planning system in Wales should place greater emphasis on the provision of sites for large scale strategic renewable energy facilities. We believe the introduction of strategic renewable energy facilities would not only provide sustainable renewable energy for new homes in Wales, but would also have the potential to serve the existing stock, which represents a significant majority of the problem. Delivering renewable energy on a large scale could potentially make a substantial reduction in the carbon footprint of the residential sector in Wales and also alleviate the necessity for expensive retrofitting of onsite or small scale renewable energy technologies.
4. What changes to Technical Advice Note 8 (Planning and Renewable Energy) would you wish to see?
The TAN should place greater importance on the need to secure strategic sites for renewable energy in Wales. The WAG should prioritise this, above the requirement of small scale or on-site renewable energy technologies, as the main solution to increasing the production of renewable energy in Wales.
We also believe the TAN should include provisions to ensure that the renewable energy technologies listed within it are thoroughly tested to prove their efficiency and effectiveness, before they are required as part of any new or existing developments.
The TAN should explore incentives for the installation of renewable energy technologies. As stated above, the WAG is already considering this issue, however, it is likely the ever increasing requirement for carbon reductions in new and existing homes, will continue to promote a need for schemes such as this. Therefore, we believe more work needs to be done by the WAG to explore these initiatives and the potential benefits they could provide for housebuilders, customers and the renewable energy market.
In terms of any requirements relating to new residential developments, Technical Advice Note 8 should take proper account of development viability in relation to the requirements of renewable energy production. The TAN should also place a responsibility on local authorities to conduct proper monitoring of these requirements, in order to ensure they are implementable and deliverable, and continue to achieve the objectives set out within the policy proposed.
Thank you for taking the time to consult the HBF at this stage of the process and I look forward to working with you in the future.
Richard Price
Planning and Policy Advisor - Wales
The Home Builders Federation
Haywood House North
Dumfries Place
Cardiff
CF10 3GA
