The planning system is underperforming and councils do not have the powers to deliver on government housing targets, the National Audit Office has found.
The NAO says the government will therefore struggle to meet its target of building 300,000 new homes a year from the mid-2020s.
The report notes that half of all councils are likely to face penalties for failing the “housing delivery test” in 2020, which requires a certain number of homes to be built in their area, despite the housing revenue account borrowing cap being lifted last year.
The test, part of the revised national planning policy framework published in July 2018, will create an “annual measurement of housing delivery” for each local authority. The measurement was due to be published but has been delayed.
The NAO notes that councils can influence home-building by identifying land for development but said the government’s expectation that local authorities can directly control housing completion figures is unrealistic.
“As local authorities are not major house-builders they cannot increase the numbers of new homes directly through their own efforts,” the report said.
The NAO also identified council staffing as a potential problem because the number of council planning staff fell by 15% in the decade between 2006 and 2016.
Total spending by councils on planning functions fell 15% in real terms between 2010-11 and 2017-18, but the NAO added the Ministry of Housing, Communities & Local Government lacked up to date information on skills and staffing.
“The department has attempted to deal with a shortage of planning staff in local authorities, for example by funding a bursary scheme, but it does not know the extent of the skills gap as it lacks comprehensive data,” the report said.
There was also said to be confusion over different methods for calculating housing need.
“The department needs to regularly monitor the gap between the number calculated by the standard method, local authorities’ own assessment and the ambition for 300,000 new homes,” the report said.
Only 44% of councils have an up to date local plans despite it being a legislative requirement, it added.
The system to gather contributions from developers for infrastructure costs is also not working, the NAO said, with section 106 agreements and the community infrastructure levy said to be too “complex”.
A joint analysis by LGC and the Association for Consultancy and Engineering showed in November that just 152 (47%) of all councils that could charge a levy were doing so.
This is despite the government in 2011 predicting between 82% and 92% would charge a levy.
The report says: “Local authorities, with the [ministry’s] help, need to apply them more effectively, rigorously and consistently to maximise the contributions from developers.”
Head of the NAO Amyas Morse said: “From the flawed method for assessing the number of homes required, to the failure to ensure developers contribute fairly for infrastructure, it is clear the planning system is not working well.
”The government needs to take this much more seriously and ensure its new planning policies bring about the change that is needed.”
Public Accounts Committee Meg Hillier (Lab) said serious problems needed to be tackled.
She added: “There aren’t enough experienced planning staff, appeals take too long and local authorities are not maximising contributions from developers to pay for local infrastructure.
“The [ministry] needs to work with other parts of government to fix these problems and make sure that much needed new homes are built.”
The Local Government Association’s housing spokesman Martin Tett (Con) said the government’s decision to lift the HRA borrowing cap was an acceptance that councils must play a leading role in solving the national housing shortage.
”With hundreds of thousands of homes in England with planning permission but yet to be built, it also needs to give councils powers to make sure developers build out approved homes in a timely fashion,” he added.
County Councils Network spokesman for housing, planning, and infrastructure Philip Atkins (Con) called for bolder planning reforms.
He said: “If we are to build the right homes, in the right places, with the necessary infrastructure, then we need to move towards strategic planning on a county scale, working in strong collaboration with district partners and neighbouring councils.
”We would encourage more ‘Housing Deals’ outside of city areas and for rural areas to have the same planning powers that are currently only on offer to urban metro mayors to help deliver more houses in England’s counties.”