Pound Land: Government & Towns

I wanted to gather together for myself the steps that the Government has recently been taking, by way of funding commitments or planning interventions, in the face of the problems being faced by so many town centres. After all, the position is dire, with multiple threats: economic, social and technological. See for instance this Guardian piece from 11 September 2019, Retailers call for action as high street store closures soar, the House of Commons MHCLG Select Committee report High streets and town centres in 2030 (21 February 2019) (to which the Government responded in May 2019) or indeed the December 2018 High Street Report by the High Streets Expert Panel, chaired by Sir John Timpson.

Funding

Sometimes, tracking Government funding announcements can be like trying to win at the three cups game.

However, let’s have a go.

In response to the Timpson report, on 29 October 2018 the Government announced the future high streets fund as follows:

“In July this year, the Secretary of State for Housing, Communities and Local Government asked Sir John Timpson to consider these issues and make recommendations how to support local areas to respond to these changes. In the run-up to the Budget, he made two main recommendations to the Chancellor and the Secretary of State: to set up a High Streets Taskforce to support local leadership and to establish a new fund to support the renewal and reshaping of high streets and town centres.

The Chancellor and the Secretary of State agree with Sir John’s diagnosis and recommendations. Therefore, to respond, a new £675 million Future High Streets Fund will be set up to help local areas to respond to and adapt to these changes. It will serve two purposes: it will support local areas to prepare long-term strategies for their high streets and town centres, including funding a new High Streets Taskforce to provide expertise and hands-on support to local areas. It will also then co-fund with local areas projects including:

• investment in physical infrastructure, including improving public and other transport access, improving flow and circulation within a town / city centre, congestion-relieving infrastructure, other investment in physical infrastructure needed to support new housing and workspace development and existing local communities, and the regeneration of heritage high streets; and

• investment in land assembly, including to support the densification of residential and workspace around high streets in place of under-used retail units”

It was clear from the call for proposals that “£55m of the Fund has been allocated to the Department for Digital, Culture, Media and Sport to support the regeneration of heritage high streets. This has two elements: helping to restore historic high street properties through Historic England, and equipping communities with their own resources to put historic buildings back into economic use – for example as residential buildings, new work spaces or cultural venues, supported by the Architectural Heritage Fund.“

The Government then launched the £1.6bn Stronger Towns Fund on 4 March 2019 “to boost growth and give communities a greater say in their future after Brexit.”

A total of £1 billion will be allocated using a needs-based formula. More than half this share (£583 million) will go to towns across the North with a further £322 million allocated to communities in the Midlands. Communities will be able to draw up job-boosting plans for their town, with the support and advice of their Local Enterprise Partnerships.

Another £600 million will be available through a bidding process to communities in any part of the country.”

So that made a total of £2.275bn.

In his first week in office, the new prime minister gave a speech in Manchester, referring to a £3.6bn “towns fund”:

Our post-industrial towns have a proud, great heritage – but an even greater future. Their best years lie ahead of them.

So we are going to put proper money into the places that need it.

We will start by ensuring there is investment from central government – by bringing forward plans on the UK Shared Prosperity Fund – and we have growth deals as well for Scotland, Wales and Northern Ireland.

And we’re now going to have a £3.6 billion Towns Fund supporting an initial 100 towns. So that they will get the improved transport and improved broadband connectivity that they need.

A subsequent MHCLG press statement 100 places to benefit from new Towns Fund (6 September 2019) made it clear that the £3.6bn represented an additional commitment of £1.325bn over the previous commitment:

The 100 places invited to develop proposals for a new generation of multi-million-pound Town Deals have today (6 September 2019) been announced by Local Government Secretary Rt Hon Robert Jenrick MP.   

The towns eligible for support from the £3.6 billion Towns Fund include places with proud industrial and economic heritage but have not always benefitted from economic growth in the same way as more prosperous areas.”

Today’s announcement follows the Prime Minister’s confirmation in July of an additional £1.325 billion to support towns as part of a renewed vision to level up our regions, which took the total value of the Towns Fund to £3.6 billion.”

The 100 towns are being invited to bid for funding. A total of £241m is available to support towns in 2020-2011, and the 100 towns can bid for up to £25m each. We await the prospectus and eligibility criteria. The basis on which the towns have been selected has also not been published (as far as I know). I assume that this shortlisting represents a merging of the previous future high streets fund and stronger towns fund but if you are on the outside of these processes, frankly it is not easy to follow!

Today there was a further announcement: £95 million to revive historic high streets (14 September 2019).

£92 million will be provided by the Government and overseen by Historic England to create 69 new High Street Heritage Action Zones.

£3 million will be provided by the National Lottery Heritage Fund to support a cultural programme to engage people in the life and history of their high streets.

The initiative will be funded by combining £40 million from the Department for Digital, Culture Media and Sport’s Heritage High Street Fund with £52 million from the Ministry of Housing, Communities and Local Government’s Future High Street Fund. £3 million will be provided by the National Lottery Heritage Fund to support a cultural programme to engage people in the life and history of their high streets.”

The £52m is from the existing £3.6bn commitment.

What do I take from this? The Government is certainly directing additional funding to selected towns. The criteria for selecting the towns is not wholly transparent. Of the headline £3.6bn number, the short term commitment in 2020/2021 appears to be circa £250m.

Planning

What planning measures have been introduced?

Well the previous Secretary of State James Brokenshire announced in his 13 March 2019 written statement proposed changes to the GODO so as to allow “(A) use classes to diversify and incorporate ancillary uses without undermining the amenity of the area, to introduce a new permitted development right to allow shops (A1), financial and professional services (A2), hot food takeaways (A5), betting shops, pay day loan shop and launderettes to change use to an office (B1) and to allow hot food takeaways (A5) to change to residential use (C3). Additionally, to give businesses sufficient time to test the market with innovative business ideas we will extend the existing right that allows the temporary change of use of buildings from 2 to 3 years and enable more community uses to take advantage of this temporary right, enabling such premises to more easily locate on the high street.”

The Town and Country Planning (Permitted Development, Advertisement and Compensation Amendments) (England) Regulations 2019, giving effect to this, came into force on 25 May 2019

Revised planning practice guidance on town centres and retail was published on 22 July 2019, replacing the previous “ensuring the vitality of town centres” guidance in the PPG. The main changes were

• Consistent with other changes in the PPG, the guidance refers to up to date policies rather than up to date plans.

• The sequential and impact tests remain but there is in paragraph 013 recognition that town centre development can be more expensive and complicated than development elsewhere so that authorities are advised they need to be realistic and flexible when applying the sequential test.

• There is new guidance on the need for local planning authorities to plan for town centres and their vitality and viability, for the need for local planning authorities to take a leading role and consider in particular structural changes in the economy, changing shopping and leisure patterns and formats and the impact that these are having on individual town centres.

• There are new paragraphs which explain the role of the new permitted development rights.

What of recent decisions?There have been no recovered appeal or call in decisions yet by the new Secretary of State raising town centre issues. The previous Secretary of State considered three called in applications for out of town retail and leisure development in Handforth, Cheshire in a decision letter dated 12 June 2019.

There were three applications, only the first of which was approved, the others refused:

Phase 1b – application reference 16/3284M, dated 4 July 2016, seeking outline consent for the erection of 2320m2 of retail floorspace.

• Phase 2 – application reference16/0802M, dated 26 November 2015, seeking outline consent for the erection of four restaurants and three drive-thru restaurant/cafes, along with associated car parking, servicing and landscaping.

• Phase 3 – application reference 16/0138M, dated 8 January 2016 (amended 16 March 2017), seeking outline consent for construction of 23,076m2 of class A1 retail floorspace, 2,274m2 of class A3/A5 floorspace, along with associated car parking, access and servicing arrangements and landscaping.”

The Secretary of State considers that, due to its small-scale and limited nature, Phase 1b can take place in isolation of Phases 2 and 3, and subsequently cannot be seen as having the negative effects that Phases 2 and 3 would have on Macclesfield and Stockport town centres.”

James Brokenshire announced in his March 2019 written statement that he would “also shortly publish “Better Planning for High Streets”. This will set out tools to support local planning authorities in reshaping their high streets to create prosperous communities, particularly through the use of compulsory purchase, local development orders and other innovative tools.”

I assume that this will be published in due course by his successor. Initiatives and funding announcements are great as long as everything is of course properly targeted and, above all, leads to some early positive outcomes. A lot of talk, a lot of money being dangled, but it is going to take much more than that to give many of our high streets a new reason for being, and local people a new reason to use them. We’re falling out of the habit fast.

Simon Ricketts, 14 September 2019

Personal views, et cetera

Money Money Money: Accounting For CIL

This tweet from MHCLG has been nagging away at me for a few days:

The announcement of course was in relation to the 1 September 2019 commencement date in the Community Infrastructure Levy (Amendment) (England) (No. 2) Regulations 2019 and the Government’s updated planning practice guidance in relation to CIL , planning obligations and viability.

I covered the background to the changes in my 8 June 2019 blog post The Bottom Line: Updates On CIL And Viability.

There was quite a splash on 1 September, with a MHCLG press statement Communities to see how housing developers cash benefits them thanks to new planning rules (1 September 2019) and media briefings by planning minister Esther McVey, duly reported in the professional press eg Councils forced to spell out details of CIL deals (Housing Today, 2 September 2019):

McVey said builders “spent a whopping £6bn towards local infrastructure in 2016/17” but councils had not been required to report on the total amount of funding they had received or how it was spent, “leaving residents in the dark”.

She went on: “The new rules … will allow residents to know how developers are contributing to the local community when they build new homes, whether that’s contributing to building a brand new school, roads, or a doctor’s surgery that the area needs.”

What has been nagging away at me in the tweet was the gif image: “Developers paid £6bn in contributions in 2016/2017…Community Infrastructure Levy”.

Huge if true.

But it’s not.

I have tracked the £6bn figure back to a research report The Incidence, Value and Delivery of Planning Obligations and Community Infrastructure Levy in England in 2016-17 by Dr Alex Lord, Dr Richard Dunning and Dr Bertie Dockerill (University of Liverpool), Dr Gemma Burgess (University of Cambridge), Dr Adrian Carro (University of Oxford) Professor Tony Crook and Professor Craig Watkins (University of Sheffield) and Professor Christine Whitehead (London School of Economics) published by MHCLG in March 2018.

From the executive summary:

There has been an increase in the aggregate value of planning obligations agreed and CIL levied since 2011/12, up 61% from £3.7bn to £6.0bn in 2016/17 (50% after adjusting for inflation).

So the £6bn is the total of the value of section 106 planning obligations agreed (not paid) and “CIL levied”. This is the table in the research document:

⁃ “The estimated value of planning obligations agreed and CIL levied in 2016/17 was £6.0 billion. This central valuation is premised upon the assumptions identified in the appendix, corresponding to survey validity, respondent representation and the distribution of values.

⁃ When adjusted to reflect inflation the total value of developer obligations in real terms is almost identical to the peak recorded in 2007/08 (£6.0 billion), but significantly higher than in 2011/12 (£3.9 billion). These changes coincide with changes in the number of dwellings granted planning permission over time.

⁃ 68% of the value of agreed developer obligations was for the provision of affordable housing, at £4.0 billion. 50,000 affordable housing dwellings were agreed in planning obligations in 2016/17.

⁃ The value of CIL levied by LPAs was £771 million in 2016/17, with a further £174 million levied by the Mayor of London.

⁃ The geographic distribution of planning obligations and CIL is weighted heavily towards the south of England. The South East and London regions account for 58% of the total value.

⁃ Direct payment contributions continue to provide a large proportion of the total contribution value for non-affordable housing obligations

But I am pretty sure there is a confusion over “CIL levied” too. The table shows that of the £6bn, £771m was LPA CIL and £174m was Mayoral CIL. As with the money attributed to planning obligations, I suspect that these CIL figures represent the amount of CIL that is calculated to be payable if development eventually proceeds pursuant to permissions issued in 2016/2017. After all we can cross-check the £174m against the MCIL monies actually collected by the Mayor from the boroughs in 2016/2017 which this GLA table shows to be only £137m.

There is something else important. Over two thirds of the “whopping £6bn towards local infrastructure” that developers allegedly spent in 2016/2017 was not even towards “local infrastructure” as defined by the Government – it was towards affordable housing!

So it’s not that developers are not committing huge sums towards local infrastructure, and even greater sums towards affordable housing.

And it’s not that CIL will not over time secure increasing contributions towards the provision of local infrastructure.

It’s the inaccuracies and exaggeration. £6bn was not received by local authorities in 2016/2017 to be spent on local infrastructure. Local authorities did not even accrue the right to that amount in the future. The reality is that planning permissions were issued which, could, in due course , deliver (subject to the application of CIL exemptions and reliefs in the case of the £945m CIL component) up to around £2bn.

The minister accuses authorities of “leaving residents in the dark” as to funding received and spent. Greater transparency from MHCLG on the numbers it uses would be equally helpful.

Simon Ricketts, 7 September 2019

Personal views, et cetera