MHCLG drops plans for new algorithm method to calculate housing need

Move follows backlash over predicted increase in rural and suburban development rather than urban regeneration
PA

By Jim Dunton

08 Apr 2021

The Ministry of Housing, Communities and Local Government will not proceed with a plans to use a new algorithm to work out how many additional homes are needed in local areas, it has confirmed.

Proposals to introduce a new method for calculating local housing need were floated by ministers last summer as part of the government’s plans to increase delivery of new homes to the 300,000-a-year level by the middle of the decade. According to the latest official statistics, there were 243,770 net additions to the England’s housing stock in 2019-20.

The plans to change the official method for calculating local housing need were the subject of a consultation that launched in August, but sparked a backlash from Conservative MPs and councillors.

An analysis by planning consultancy Lichfields said the new method would significantly increase that calculated housing need in Conservative-controlled council areas in the suburbs and shires outside London. In predominantly urban Labour-held local authorities, meanwhile, the number of new homes was expected to fall slightly.

In its formal response to the consultation, published last week, the government confirmed it was scrapping the plans for the new housing-need calculation method and would instead tweak the current system, with a focus on regeneration and renewal in urban areas .

“We do not propose to proceed with the specific changes to the standard method that were consulted on,” the consultation response said. 

“Instead we will proceed with a reformed standard method which reflects our commitment to levelling up and enables regeneration and renewal of our urban areas as we recover from the Covid-19 pandemic.”

The response said ministers had “listened carefully” to feedback suggesting the distribution of need was wrong.

“In particular, we heard that too much strain was being put on our rural areas and not enough focus was on the renewal of our towns and cities,” it added.

However the response noted that a number of the concerns expressed “showed some misunderstanding about what was being proposed”.

The consultation was launched as headlines were increasingly dominated by the fiasco over the Department for Education’s use of algorithms to give GCSE and A-level students grades for exams that were cancelled because of the pandemic.

Ministers said the government’s new approach for increasing housing numbers would see the standard method for calculating local need retained in its current form but with a “35% uplift” added to Greater London and local-authority areas in the 19 other most-populated cities and urban areas in England.

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