“• changes to the standard method for assessing local housing need, which as well as being a proposal to change guidance in the short term has relevance to proposals for land supply reforms set out in Planning for the Future;
• securing of First Homes, sold at a discount to market price for first time buyers, including key workers, through developer contributions in the short term until the transition to a new system;
• temporarily lifting the small sites threshold below which developers do not need to contribute to affordable housing, to up to 40 or 50 units to support SME builders as the economy recovers from the impact of Covid-19;
• extending the current Permission in Principle to major development so landowners and developers now have a fast route to secure the principle of development for housing on sites without having to work up detailed plans first.”
Kings Chambers’ Constanze Bell hosted a good discussion on the proposals in a 28 August podcast with a panel comprising (Diana Richardson, Gladman), Paul Bedwell (Pegasus), Martin Carter (Kings Chambers) and Jonathan Easton (Kings Chambers).
Changes to the standard method
The Government “proposes a revised standard method for calculating local housing need which will be used as the basis for plans created prior to any changes outlined in Planning for the Future being introduced.”
There will be two steps:
Step 1 – the “baseline for the standard method should be whichever is the higher of 0.5% of existing housing stock in each local authority OR the latest projected average annual household growth over a 10-year period”
“The household projections element of the baseline will use the latest ONS national household growth projections for the local authority area (Principal projection, table 406). The projected average annual household growth over a 10-year period (10 consecutive years, with the current year being used as the starting point from which to calculate growth over that period) will be used.”
Step 2 – “We propose the standard method will include two adjustments to the baseline using the workplace-based median house price to median earnings ratio. Initially it is proposed that the ratio for the most recent year for which data is available in order to address current affordability of homes would be used. Then how affordability has changed over the last 10 years of published data would be incorporated, using that same statistic.”
Precise formula:
The Government proposes the following transitional arrangements: “from the publication date of the revised guidance, authorities which are already at the second stage of the strategic plan consultation process (Regulation 19) are given 6 months to submit their plan to the Planning Inspectorate for examination. Authorities close to publishing their second stage consultation (Regulation 19), should be given 3 months from the publication date of the revised guidance to publish their Regulation 19 plan and a further 6 months to submit their plan to the Planning Inspectorate.”
In theory, the new formula could be with us very quickly: “Following the outcome of this consultation, the Government will update the planning practice guidance with the revised standard method for assessing local housing need.”
Or could it? There can of course be no “correct” methodology – it’s all political choices as to which factors are considered to be most relevant, standardised into a formula that may or may not work as intended – and there has already a strong backlash from various quarters, for instance Conservative MP for Harborough, Neil O’Brien, The next algorithm disaster – coming to a Conservative constituency near you. This time, it’s housing growth. (ConservativeHome, 24 August 2020), from Chris Young QC and othersA Standard Method That Works For The North (LinkedIn post 22 August 2020), and Planning algorithm may destroy suburbia, Tory MPs warn Boris Johnson (Times, 29 August 2020). Press speculation that the Government is already re-thinking is hopefully wide of the mark given that the consultation process hasn’t yet closed and therefore minds must in law remain open, but are we going to see yet another fudged outcome?
Basically they are intended to be a “for sale” product for first time buyers and other qualifying groups, sold at a 30% discount to market value, which must be maintained on re-sale. At that point the Government was consulting on the detail.
This is what it has concluded, subject to this further consultation:
⁃ “a minimum of 25 per cent of all affordable housing units secured through developer contributions should be First Homes. This will be a national threshold, set out in planning policy.”
⁃ “The Government proposes that, under the new system, a policy compliant planning application should seek to capture the same amount of value as would be captured under the local authority’s up-to-date published policy. For instance, a local policy may require 20% affordable housing on site, half of which is shared ownership, and half of which is social rent. The plan viability assessment will set out assumptions on the amount of value captured – for example, a social rent home may be discounted by 50% from market price, and a shared ownership home may be discounted by 20%. This allows the total value captured under the policy to be calculated. This value can then be reallocated to a different affordable housing mix under the new policy.”
⁃ “For the remaining 75% of affordable housing secured through developer contributions, there are two broad options:
• “Option 1: Where a local authority has a policy on affordable housing tenure mix, that policy should be followed, but with First Homes delivering a minimum of 25% of the affordable housing products…”
• “Option 2: A local authority and developer can negotiate the tenure mix for the remaining 75% of units.”
It will be open to authorities to require in their local plans that the discount be 40% or 50% rather than 30% but they will not be able to water down the requirement that 25% of the affordable homes to be provided on site must be First Homes.
Again, the proposal could be with us quickly, initially in the the form of “planning policy changes” (Planning Practice Guidance? NPPF changes? Written ministerial statement?):
“We intend to begin by making planning policy changes, to ensure that clear expectations are set. However, to ensure that First Homes are delivered, nationwide, on a consistent basis, we are keeping under consideration the option to strengthen the policy through primary legislation at a future date. We also intend to introduce an exemption from the Community Infrastructure Levy for First Homes, to enable delivery prior to wider developer contribution reform. This would require changes to regulations. Lastly, we are also considering significant reforms to the system of developer contributions. We will ensure that First Homes will continue to be delivered under a reformed approach”
However, it seems from the transactional arrangements set out below that the requirement will not immediately take full effect:
56. We recognise that local authorities may need to review the tenure mix for the remainder of the affordable housing that they are seeking to secure. Where local authorities choose to update their tenure mix to reflect this policy, they can do this through a local plan review, although we believe that prioritising the replacement of home-ownership tenures by First Homes will reduce the need for this.
57. We also recognise that there will be a number of local plans and neighbourhood plans that have been prepared based on the existing National Planning Policy Framework and that have reached more advanced stages of the plan-making process. Therefore, local plans and neighbourhood plans that are submitted for Examination within 6 months of this new policy being enacted will not need to reflect the First Homes policy requirements.
58. We also recognise that many developers will have been preparing planning applications under different assumptions. Where significant work has already been undertaken to progress a planning application, including where there has been significant pre-engagement with a local authority on the basis of a different tenure mix of affordable housing, the local authority should have flexibility to accept alternative tenure mixes, although they should consider whether First Homes could be easily substituted for another tenure, either at 25% or a lower proportion.”
Lifting the small sites threshold for SME builders
This could have a significant effect on development. In London, for instance, it will have big repercussions.
“We are proposing to raise the small sites threshold to up to either 40 or 50 new homes through changes to national planning policy and are seeking views on the most appropriate level. These thresholds balance the aim of supporting SMEs with the need to deliver new affordable homes. This will be for an initial period of 18 months in which we will monitor the impact of the raised threshold on the sector before reviewing the approach.”
“ In designated rural areas, we … propose to maintain the current threshold.”
The current threshold is 10 new homes, or site area of 0.5 hectares. The site area threshold will be increased “at the same proportion”, so presumably to 2 or 2.5 hectares (although should in fact the site area increase be less, to reflect likely density of development?).
Again the proposal could be in effect quickly:
“Following the consultation, a decision will be taken on whether to proceed with this approach. If it is taken forward, this could be through the introduction of a Written Ministerial Statement in the Autumn.”
If you are an SME developer with a scheme which may qualify, might it be worth your while seeing how this pans out? Of course it will not be straightforward – we are likely to see some local planning authorities seeking understandably to continue to rely on adopted local plan requirements for affordable housing, choosing to apply less weight to the written ministerial statement, and therefore the potential need to appeal.
Presumably the Government is hoping to see significant take-up, meaning inevitably less affordable housing. That would seem to be a politically-charged trade-off but may in reality simply leapfrog what would otherwise have been a viability process outcome in many instances.
Local planning authorities are currently required to maintain brownfield land registers, in two parts.
– Part 1: previously developed land with an area of at least 0.25 hectares that is suitable and available for residential development and where residential development is achievable (all defined terms).
– Part 2: land in Part 1 where the local planning authority has exercised its discretion to enter the land in Part 2 and has decided to allocate the land for residential development having followed defined publicity, notification and consultation procedures.
If your land is on Part 1 of the register you can currently apply for permission in principle for minor development (basically less than ten dwellings). If your land is on Part 2 of the register you already have permission in principle for the development set out in the register (which must not be large enough to require environmental impact assessment.
There is a further procedure in the Housing and Planning Act 2016, but not yet brought into effect, for automatic permission in principle to stem from allocation in defined categories of statutory development plans rather than just from designation on a brownfield land register.
The Government now proposes “to remove the restriction in the current Permission in Principle regulations on major development”. Although the paper is not specific, this must surely simply mean that permission in principle would now be able to be applied for in relation to major development (although still not development such as to require environmental impact assessment so, unless a negative screening opinion has been obtained, capped at 150 dwellings/5 hectares), as long as the site is on Part 1 of a local planning authority’s brownfield land register.
The paper proposes that there be no cap on the amount of commercial development proposed, although the scheme will need to be “residential-led”. The procedure is quicker than the outline planning application procedure (five weeks determination period, 14 days deadline for responses from statutory consultees).
There is not proposed to be any increase in the information requirements that currently apply to PiP applications for minor development. “However, we would be interested in whether, given the larger scale of development, there should be an additional maximum height threshold parameter, in terms of number of storeys, as part of the Permission in Principle. This would provide greater clarity to the applicant and local planning authority about the scale of housing development that is acceptable for the site, particularly in high density urban areas. Conversely, the inclusion of a maximum height parameter would add further complexity to the determination of Permission in Principle as it starts to bring in design considerations, and may in practice lead to greater confusion – for instance, a high height threshold may only be acceptable for part of the site given the impact on neighbouring dwellings.”
The Government is proposing to adjust the application fee regime to increase the cost saving in comparison with a traditional application for outline planning permission.
This all certainly gives additional focus to brownfield land registers (which I last looked at in my 5 January 2018 blog post Brownfield Land Registers: A Bit Of Progress). If you have land that is on Part 1 of a brownfield land register, it will certainly be a procedural route to consider.
Again, we could see the proposal come into effect relatively quickly. “Following this consultation, if we introduce Permission in Principle by application for major development, we aim to introduce amending regulations this Autumn, with the regulations expected to come into force by the end of the calendar year. Changes to the fee structure would require separate changes to the Planning Fees Regulations.”
Of course, this will also be a useful test as to how well permission in principle can be made to work in practice, ahead of the Government’s more ambitious proposals the subject of ChangesOne (and my 7 August 2020 blog post For The Future).
When I saw a limelon for the first time yesterday (some recently marketed lime/melon hybrid since you ask, and tangy and refreshing it is indeed), I naturally thought of the proposed combined infrastructure levy: what on earth is it?
Planning For The Future is of course work in progress and it may be churlish for us to expect it to have all the answers. After all, it is up to us to provide cogent responses to the current consultation process.
But the sections in the document on infrastructure contributions are very light indeed, given the central role that section 106 and the community infrastructure levy play in the current system and the obvious complexity of arriving at a system for a combined infrastructure levy that on the one hand does not choke off various forms of development in some areas by making it unviable and that on the other hand both (1) raises sufficient monies to secure the delivery of necessary social (e.g. affordable housing) and physical infrastructure and also (2) ensures for the benefit of both communities and developers that the infrastructure will actually be provided in the right place, at the right time.
•Update the evidence on the current value and incidence of planning obligations
• Investigate the relationship between CIL and S106
• Understand negotiation processes and delays to the planning process
• Explore the monitoring and transparency of developer contributions
• Understand the early effects and expectations for the changes to developer contributions brought in by the revisions to the NPPF
Chapter 3 (The value of Planning Obligations and the Community Infrastructure Levy) sets out some interesting findings:
“• The estimated value of planning obligations agreed and CIL levied in 2018/19 was £7.0 billion. This 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 contributions in real terms is £500 million higher than in 2016/17, £300 million higher than in 2007/08.
• 67% of the value of agreed developer contributions was for the provision of affordable housing, at £4.7 billion; this is the same proportion as in 2016/17 and is the joint-highest to date.
• 44,000 affordable housing dwellings were agreed in planning obligations in 2018/19. This is a reduction since 2016/17, but the value of this housing has increased over the same period due to an increase in house prices in many areas with higher developer contributions.
• The value of CIL levied by LPAs was £830 million in 2018/19, with a further £200 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, South West and London regions account for 61% of the total value. However, the value of developer contributions exacted in London has fallen since 2016/17 – down from 38% to 28% of the total aggregate value.”
There is nothing in the white paper that explicitly draws from the findings of that report in order to arrive at the wholly new mechanism that is proposed.
Some people seem to have picked up the message that the white paper means the end of the community infrastructure levy – a cause for celebration in some parts. But the white paper’s proposal for a combined infrastructure levy to my mind is CIL writ large, potentially just as complex, with a whole new set of rate setting, liability, payment and spending mechanisms and with the express objective of raising more monies than the current system. It warrants its own focus at this point, away from the noise of the other proposals in the white paper.
How to begin to unpick what is proposed in relation to CIL and section 106 planning obligations (and what the proposals in relation to section 106 mean for the delivery of affordable housing in particular)? I wrote down for myself five basic questions:
1. How will planning obligations work under the new system?
2. What will happen to CIL?
3. How will the new Combined Infrastructure Levy be set?
4. What requirements will there be on local authorities as to how they apply combined infrastructure levy receipts?
5. Under the new system, how can local planning authorities set requirements for affordable housing and seek to ensure that they are delivered?
In order to try to answer them (in a way which would have to work in relation to all of the proposed consenting routes: DCO, outline planning permission in plan, PiP (if different from outline permission in plan, not sure!), traditional planning permission, PD), then I cut and pasted the relevant passages from the white paper in their entirety (only leaving out the detail of some of the “alternative options” floated and leaving out the questions raised in the consultation). It is easy to read summaries and think “well there must be more detail in the document itself”. It is worth reading these passages to see the totality of the proposals.
After these passages I then see how far we can get in answering my questions.
“The process for negotiating developer contributions to affordable housing and infrastructure is complex, protracted and unclear: as a result, the outcomes can be uncertain, which further diminishes trust in the system and reduces the ability of local planning authorities to plan for and deliver necessary infrastructure. Over 80 per cent of planning authorities agree that planning obligations cause delay. It also further increases planning risk for developers and landowners, thus discouraging development and new entrants.”
“1.19. Fourth, we will improve infrastructure delivery in all parts of the country and ensure developers play their part, through reform of developer contributions. We propose:
• The Community Infrastructure Levy and the current system of planning obligations will be reformed as a nationally-set value-based flat rate charge (‘the Infrastructure Levy’). A single rate or varied rates could be set. We will aim for the new Levy to raise more revenue than under the current system of developer contributions, and deliver at least as much – if not more – on-site affordable housing as at present. This reform will enable us to sweep away months of negotiation of Section 106 agreements and the need to consider site viability. We will deliver more of the infrastructure existing and new communities require by capturing a greater share of the ulpift [sic] in land value that comes with development.
• We will be more ambitious for affordable housing provided through planning gain, and we will ensure that the new Infrastructure Levy allows local planning authorities to secure more on-site housing provision.
• We will give local authorities greater powers to determine how developer contributions are used, including by expanding the scope of the Levy to cover affordable housing provision to allow local planning authorities to drive up the provision of affordable homes. We will ensure that affordable housing provision supported through developer contributions is kept at least at current levels, and that it is still delivered on-site to ensure that new development continues to support mixed communities. Local authorities will have the flexibility to use this funding to support both existing communities as well as new communities.
• We will also look to extend the scope of the consolidated Infrastructure Levy and remove exemptions from it to capture changes of use through permitted development rights, so that additional homes delivered through this route bring with them support for new infrastructure.
“4.5. Securing necessary infrastructure and affordable housing alongside new development is central to our vision for the planning system. We want to bring forward reforms to make sure that developer contributions are:
• responsive to local needs, to ensure a fairer contribution from developers for local communities so that the right infrastructure and affordable housing is delivered;
• transparent, so it is clear to existing and new residents what new infrastructure will accompany development;
• consistent and simplified, to remove unnecessary delay and support competition in the housebuilding industry;
• buoyant, so that when prices go up the benefits are shared fairly between developers and the local community, and when prices go down there is no need to re-negotiate agreements.
4.6. The Government could also seek to use developer contributions to capture a greater proportion of the land value uplift that occurs through the grant of planning permission, and use this to enhance infrastructure delivery. There are a range of estimates for the amount of land value uplift currently captured, from 25 to 50 per cent. The value captured will depend on a range of factors including the development value, the existing use value of the land, and the relevant tax structure – for instance, whether capital gains tax applies to the land sale. Increasing value capture could be an important source of infrastructure funding but would need to be balanced against risks to development viability.”
“4.7. We propose that the existing parallel regimes for securing developer contributions are replaced with a new, consolidated ‘Infrastructure Levy’.
Proposal 19: The Community Infrastructure Levy should be reformed to be charged as a fixed proportion of the development value above a threshold, with a mandatory nationally-set rate or rates and the current system of planning obligations abolished.”
“4.8. We believe that the current system of planning obligations under Section 106 should be consolidated under a reformed, extended ‘Infrastructure Levy’.
4.9. This would be based upon a flat-rate, valued-based charge, set nationally, at either a single rate, or at area-specific rates. This would address issues in the current system as it would:
be charged on the final value of a development (or to an assessment of the sales value where the development is not sold, e.g. for homes built for the rental market), based on the applicable rate at the point planning permission is granted;
• be levied at point of occupation, with prevention of occupation being a potential sanction for non-payment;
• include a value-based minimum threshold below which the levy is not charged, to prevent low viability development becoming unviable, reflecting average build costs per square metre, with a small, fixed allowance for land costs. Where the value of development is below the threshold, no Levy would be charged. Where the value of development is above the threshold, the Levy would only be charged on the proportion of the value that exceeded the threshold ; and
• provide greater certainty for communities and developers about what the level of developer contributions are expected alongside new development.
4.10. The single rate, or area-specific rates, would be set nationally. It would aim to increase revenue levels nationally when compared to the current system. Revenues would continue to be collected and spent locally.
4.11. As a value-based charge across all use classes, we believe it would be both more effective at capturing increases in value and would be more sensitive to economic downturns. It would reduce risk for developers, and would reduce cashflow difficulties, particularly for SME developers.
4.12. In areas where land value uplift is insufficient to support significant levels of land value capture, some or all of the value generated by the development would be below the threshold, and so not subject to the levy. In higher value areas, a much greater proportion of the development value would be above the exempt amount, and subject to the levy.
4.13. To better support the timely delivery of infrastructure, we would also allow local authorities to borrow against Infrastructure Levy revenues so that they could forward fund infrastructure. Enabling borrowing combined with a shift to levying developer contributions on completion, would incentivise local authorities to deliver enabling infrastructure, in turn helping to ensure development can be completed faster. As with all volatile borrowing streams, local authorities should assure themselves that this borrowing is affordable and suitable.
4.14. Under this approach the London Mayoral Community Infrastructure Levy, and similar strategic Community Infrastructure Levies in combined authorities, could be retained as part of the Infrastructure Levy to support the funding of strategic infrastructure.
4.15. In bringing forward the reformed Infrastructure Levy, we will need to consider its scope. We will also consider the impact of this change on areas with lower land values.”
Alternative options proposed: “The Infrastructure Levy could remain optional and would be set by individual local authorities”. “Alternatively, the national rate approach could be taken, but with the aim of capturing more land value than currently, to better support the delivery of infrastructure”
“Proposal 21: The reformed Infrastructure Levy should deliver affordable housing provision
4.20. Developer contributions currently deliver around half of all affordable housing, most of which is delivered on-site. It is important that the reformed approach will continue to deliver on-site affordable housing at least at present levels.
4.21. Affordable housing provision is currently secured by local authorities via Section 106, but the Community Infrastructure Levy cannot be spent on it. With Section 106 planning obligations removed, we propose that under the Infrastructure Levy, authorities would be able to use funds raised through the levy to secure affordable housing.
4.22. This could be secured through in-kind delivery on-site, which could be made mandatory where an authority has a requirement, capability and wishes to do so. Local authorities would have a means to specify the forms and tenures of the onsite provision, working with a nominated affordable housing provider. Under this approach, a provider of affordable housing could purchase the dwelling at a discount from market rate, as now. However, rather than the discount being secured through Section 106 planning obligations, it would instead be considered as in-kind delivery of the Infrastructure Levy. In effect, the difference between the price at which the unit was sold to the provider and the market price would be offset from the final cash liability to the Levy. This would create an incentive for the developer to build on-site affordable housing where appropriate. [Footnote: As above, a Section 106 planning obligation could still be used to secure a covenant on the land, where necessary. However, the value would be captured through the Infrastructure Levy, rather than Section 106. ] First Homes, which are sold by the developer direct to the customer at a discount to market price, would offset the discount against the cash liability.
4.23. Under this approach we recognise that some risk is transferring to the local planning authority, and that we would need to mitigate that risk in order to maintain existing levels of on-site affordable housing delivery. We believe that this risk can be fully addressed through policy design. In particular, in the event of a market fall, we could allow local planning authorities to ‘flip’ a proportion of units back to market units which the developer can sell, if Levy liabilities are insufficient to cover the value secured through in-kind contributions. Alternatively, we could require that if the value secured through in-kind units is greater than the final levy liability, then the developer has no right to reclaim overpayments. Government could provide standardised agreements, to codify how risk sharing would work in this way.
4.24. We would also need to ensure the developer was incentivised to deliver high build and design quality for their in-kind affordable homes. Currently, if Section 106 homes are not of sufficient quality, developers may be unable to sell it to a provider, or have to reduce the price. To ensure developers are not rewarded for low standard homes under the Levy, local authorities could have an option to revert back to cash contributions if no provider was willing to buy the homes due to their poor quality. It is important that any approach taken maintains the quality of affordable housing provision as well as overarching volumes, and incentivises early engagement between providers of affordable housing and developers. Local authorities could also accept Infrastructure Levy payments in the form of land within or adjacent to a site. Through borrowing against further Infrastructure Levy receipts, other sources of funding, or in partnership with affordable housing providers, they could then build affordable homes, enabling delivery at pace.
4.25. Alternative option: We could seek to introduce further requirements around the delivery of affordable housing. To do this we would create a ‘first refusal’ right for local authorities or any affordable housing provider acting on their behalf to buy up to a set proportion of on-site units (on a square metre basis) at a discounted price, broadly equivalent to build costs. The proportion would be set nationally, and the developer would have discretion over which units were sold in this way. A threshold would be set for smaller sites, below which on-site delivery was not required, and cash payment could be made in lieu. Where on-site units were purchased, these could be used for affordable housing, or sold on (or back to the developer) to raise money to purchase affordable housing elsewhere. The local authority could use Infrastructure Levy funds, or other funds, in order to purchase units.”
“Proposal 22: More freedom could be given to local authorities over how they spend the Infrastructure Levy
4.26. It is important that there is a strong link between where development occurs and where funding is spent. Currently, the Neighbourhood Share of the Community Infrastructure Levy ensures that up to 25 per cent of the levy is spent on priorities in the area that development occurred, with funding transferred to parish councils in parished areas. There are fewer restrictions on how this funding is spent, and we believe it provides an important incentive to local communities to allow development in their area. We therefore propose that under this approach the Neighbourhood Share would be kept, and we would be interested in ways to enhance community engagement around how these funds are used, with scope for digital innovation to promote engagement.
4.27. There is scope for even more flexibility around spending. We could also increase local authority flexibility, allowing them to spend receipts on their policy priorities, once core infrastructure obligations have been met. In addition to the provision of local infrastructure, including parks, open spaces, street trees and delivery or enhancement of community facilities, this could include improving services or reducing council tax. The balance of affordable housing and infrastructure may vary depending on a local authority’s circumstances, but under this approach it may be necessary to consider ring-fencing a certain amount of Levy funding for affordable housing to ensure that affordable housing continues to be delivered on-site at current levels (or higher). There would also be opportunities to enhance digital engagement with communities as part of decision making around spending priorities. Alternatively, the permitted uses of the Levy could remain focused on infrastructure and affordable housing, as they are broadly are at present. Local authorities would continue to identify the right balance between these to meet local needs, as they do at present.”
“ 5.19. If a new approach to development contributions is implemented, a small proportion of the income should be earmarked to local planning authorities to cover their overall planning costs, including the preparation and review of Local Plans and design codes and enforcement activities.”
Back to my questions:
1. How will planning obligations work under the new system?
It is said in the paper that the “current system of planning obligations under Section 106 should be consolidated under a reformed, extended ‘Infrastructure Levy’.” There will no longer be “months of negotiation of Section 106 agreements”. “Section 106 planning obligations [will be] removed”.
The proposals seem to assume that section 106 is simply a mechanism for securing provision of affordable housing and other “developer contributions”. Whilst that is its main role at present, it is a mechanism for a wide range of commitments – see this table from the accompanying study:
The joy of section 106 is its flexibility to circumstances and policy, enabling the applicant commit to commit, in a way that binds successors in title, to all necessary mitigation measures that cannot be secured by way of planning condition and which are necessary to overcome what would otherwise be reasons not to allow the proposed development to proceed. On more complex developments it is the only tried and tested way in which appropriate mechanisms can be arrived at to make sure that, for instance, necessary infrastructure comes forward at the right time and by way of a sensible process, bespoke to the circumstances of the development, agreed between the parties. There is no proposal in the paper (although it has previously been floated by some) that the role of planning conditions could be expanded.
Where financial contributions are paid to a local planning authority under a section 106 agreement they can only be used for the specified purposes, whereas the proposals in relation to the consolidated infrastructure levy appear to be more loose: “We could also increase local authority flexibility, allowing them to spend receipts on their policy priorities, once core infrastructure obligations have been met.”What is meant by “core infrastructure obligations”? The core infrastructure obligations necessary to make a particular development acceptable? If so, then a document will need to be drawn up which surely will be as complex as a section 106 agreement – when will the school come forward, using the developer’s infrastructure levy contribution, how, where and when? Local employment and training measures, provision and maintenance of open space and play areas, carbon reduction commitments, commitments to specified transport improvements and the formulation and implementation of transport plans – are all these to be swept away? If so, the document needs to explain either why this is acceptable and desirable or how these matters will otherwise be addressed.
Additional confusion arises when these bold statements as to the removal of section 106 obligations are then contrasted with the footnote to paragraph 4.22: “As above, a Section 106 planning obligation could still be used to secure a covenant on the land, where necessary. However, the value would be captured through the Infrastructure Levy, rather than Section 106”. What does that mean? What would the “covenant on the land” and if the only point is to make sure that the infrastructure levy binds successors in title, why not leave that for the legislation itself?
Is anyone out there clearer at this stage ?
2. What will happen to CIL?
The community infrastructure levy will be replaced by the consolidated infrastructure levy, which will work in various significantly different ways to the current system. For instance:
• It will be a “nationally-set value-based flat rate charge”. I try to unpick this in my answer to question 3 below.
• It will be “levied at point of occupation”.
• “Revenues would continue to be collected and spent locally.”
• “we would also allow local authorities to borrow against Infrastructure Levy revenues so that they could forward fund infrastructure. Enabling borrowing combined with a shift to levying developer contributions on completion, would incentivise local authorities to deliver enabling infrastructure, in turn helping to ensure development can be completed faster.” [If a developer needs specific infrastructure to be delivered in order to enable development to proceed, how will this be documented? What if, as is usually the case, the developer would prefer to deliver the infrastructure, e.g. build the school?]
• The “London Mayoral Community Infrastructure Levy, and similar strategic Community Infrastructure Levies in combined authorities, could be retained as part of the Infrastructure Levy to support the funding of strategic infrastructure” [Is this retained as in retained under the current CIL system so that in London CIL would continue to operate alongside the new levy, or is this retained as in “rolled into”?]
• “We will also look to extend the scope of the consolidated Infrastructure Levy and remove exemptions from it to capture changes of use through permitted development rights” [This is odd – development pursuant to PD rights is not exempt from CIL at the moment. Is this flagging more widely that exemptions will be removed? That would have been a sensible, simplifying, approach were CIL levels to be reduced, but here we are faced with an increased Infrastructure Levy…]
3. How will the new Combined Infrastructure Levy be set?
• It will be a “nationally-set value-based flat rate charge, set nationally, at either a single rate, or at area-specific rates”. [Clearly this can’t in any circumstances mean a nationally-set flat rate charge of x per square metres but must mean a nationally-set proportion of (I assume) gross development value.]
• There will be “a value-based minimum threshold below which the levy is not charged, to prevent low viability development becoming unviable, reflecting average build costs per square metre, with a small, fixed allowance for land costs. Where the value of development is below the threshold, no Levy would be charged. Where the value of development is above the threshold, the Levy would only be charged on the proportion of the value that exceeded the threshold”. [When would the developer have certainty that the threshold was not exceeded, or indeed as to what the value (and therefore charge) is considered to be, through what procedure and with what rights to appeal against the valuation? Is the valuation a notional one, applying a formula, or an actual valuation?]
• “buoyant, so that when prices go up the benefits are shared fairly between developers and the local community, and when prices go down there is no need to re-negotiate agreements.” [the timing of the valuation date will be critical, as will how to deal with phased and revised schemes and so on].
• “It would aim to increase revenue levels nationally when compared to the current system” [so more than £7bn, on the basis of the findings in that study – in a way which will need not to disincentivise owners and developers from carrying out development].
That’s all I can glean from the document. It seems to me that local planning authorities will lose much flexibility, for instance in the setting of differential rates for different types of floorspace (the document does focus to a significant extent on residential development – what rate would be set for, say, offices, logistics or retail, particularly given the weaker relationship between non-residential uses and the delivery of affordable housing, and what about not for profit development – will we need to reintroduce a number of the current CIL exemptions?
4. What requirements will there be on local authorities as to how they apply combined infrastructure levy receipts?
• “With Section 106 planning obligations removed, we propose that under the Infrastructure Levy, authorities would be able to use funds raised through the levy to secure affordable housing”. I try to unpick this in my answer to question 5 below.
• “We could also increase local authority flexibility, allowing them to spend receipts on their policy priorities, once core infrastructure obligations have been met. In addition to the provision of local infrastructure, including parks, open spaces, street trees and delivery or enhancement of community facilities, this could include improving services or reducing council tax.” [So, infrastructure levy surplus receipts (after delivery of “core infrastructure”) become unhypothecated tax receipts – the less the authority spends on infrastructure, the lower it can keep its council tax, hmm…]?
• “If a new approach to development contributions is implemented, a small proportion of the income should be earmarked to local planning authorities to cover their overall planning costs, including the preparation and review of Local Plans and design codes and enforcement activities.”
5. Under the new system, how can local planning authorities set requirements for affordable housing and seek to ensure that they are delivered?
• “We will be more ambitious for affordable housing provided through planning gain, and we will ensure that the new Infrastructure Levy allows local planning authorities to secure more on-site housing provision”.
• “This could be secured through in-kind delivery on-site, which could be made mandatory where an authority has a requirement, capability and wishes to do so. Local authorities would have a means to specify the forms and tenures of the onsite provision, working with a nominated affordable housing provider. Under this approach, a provider of affordable housing could purchase the dwelling at a discount from market rate, as now. However, rather than the discount being secured through Section 106 planning obligations, it would instead be considered as in-kind delivery of the Infrastructure Levy. In effect, the difference between the price at which the unit was sold to the provider and the market price would be offset from the final cash liability to the Levy. This would create an incentive for the developer to build on-site affordable housing where appropriate. First Homes, which are sold by the developer direct to the customer at a discount to market price, would offset the discount against the cash liability.” [So presumably the developer could net-off the costs of on-site delivery from its infrastructure levy liability. How is this to be documented? Who adjudicates on the obvious valuation issues arising?]
• “Under this approach we recognise that some risk is transferring to the local planning authority, and that we would need to mitigate that risk in order to maintain existing levels of on-site affordable housing delivery. We believe that this risk can be fully addressed through policy design. In particular, in the event of a market fall, we could allow local planning authorities to ‘flip’ a proportion of units back to market units which the developer can sell, if Levy liabilities are insufficient to cover the value secured through in-kind contributions. Alternatively, we could require that if the value secured through in-kind units is greater than the final levy liability, then the developer has no right to reclaim overpayments. Government could provide standardised agreements, to codify how risk sharing would work in this way” [How to safeguard against misuse?]
• “To ensure developers are not rewarded for low standard homes under the Levy, local authorities could have an option to revert back to cash contributions if no provider was willing to buy the homes due to their poor quality.”
• “Local authorities could also accept Infrastructure Levy payments in the form of land within or adjacent to a site.” [Back to ensuring a robust valuation process].
Again, maybe it’s just me but I’m left scratching my head. This is a wholly different approach to extracting contributions for affordable housing and for ensuring that they are delivered. Basic questions:
• How will the requirements (quantum, tenure mix, size] be set at policy stage and determined at application stage (in advance of valuations) such that there can be confidence that development will not be stalled through lack of viability?
• Are we moving to a system where all affordable housing is delivered by a local authority nominated housing provider, with less ability for the developer to seek to improve viability?
• How can there be any confidence that this mechanism will result in more on-site affordable housing than at present?
Again, thoughts welcome – it’s not that the proposals can’t be made to work, it’s just that much more input is required and, in my view, a cautious approach needs to be taken so as to guard against the inevitable unintended consequences.
The deadline for consultation responses is 29 October. We are likely to be collating a Town response, if only on specific issues such as this. If you would be interested in feeding in your thoughts, then please let me know, although, health warning, we are not in the business of designing fruit by committee!
“We understand why many participants – not just local authorities, but statutory consultees and the Planning Inspectorate – are risk averse. Judicial review is expensive, and to lose a judicial review in the courts is bad for the reputation of either [sic]. And judicial reviews can be precedent setting, establishing a new interpretation of the law. We think the proposals set out in the document should remove the risk of judicial review substantially. Most judicial reviews are about imprecise and unclearly worded policies or law. Our plans for an overhaul of planning law to create simple and clear processes and for plans that set out clear requirements and standards will substantially remove the scope for ambiguity and therefore challenge.” (Planning For The Future white paper, paragraph 5.16)
You can’t really contemplate any reform on the planning system without considering the role of the courts in the way that the system works in practice. Plainly where a public body (whether the state or a local authority) acts outside its powers, someone thereby affected needs to have access to an effective remedy, usually an order that renders it to be of no legal effect. Quite apart from the rights and procedures deriving from domestic common law principles, UK has international obligations to maintain such processes under Article 6 of the European Convention on Human Rights and, specifically in relation to access to environmental justice, under the third pillar of the Aarhus Convention. You can’t embark on a new system without a functioning mechanism to ensure that everyone plays by the rules.
Whilst essential as a backstop against abuse of power, the role of the courts in the operation of the planning system does of course need to be kept to a minimum. There are two areas in particular where there has always been scope to reduce the number of unnecessary claims:
1. As mentioned in that passage in the white paper, many (I’m not sure I would say “most”) “judicial reviews are about imprecise and unclearly worded policies or law.” As regards that first area, the aspiration in the white paper (“an overhaul of planning law to create simple and clear processes and for plans that set out clear requirements and standards will substantially remove the scope for ambiguity and therefore challenge”) is worthy but at present purely wishful thinking. We anticipate now a separate “Autumn” consultation into potential changes to EU-derived legislation, with a view to streamlining for instance SEA and EIA processes (no surprise – see e.g. my 4 July 2020 Have We Got Planning Newts For You: Back To Brexit blog post as well as Environment Secretary George Eustice’s 20 July 2020 speech). Of course, EU-derived environmental legislation (although, to be accurate, this is not about the EU – the relevant EU directives in turn implemented wider international treaty obligations) has been at the root of much planning caselaw, but the white paper’s proposals introduce a wide range of fresh tensions and uncertainties into the process – whether that be about the central imposition of housing requirements on local authorities, accelerated routes to development approvals or the proposed shift to a wholly new mechanism for the funding and delivery of affordable housing and infrastructure.
2. Claimants should be discouraged from using litigation simply as a tactic to secure delay or publicity, or in order to have a “low consequences” speculative last throw of the dice. Some steps have been taken to address this in recent years, most importantly the establishment of the Planning Court in March 2014 so that cases could be dealt with more quickly, by specialist judges, by the introduction of a permission stage in relation to section 288 challenges and by tightening the rules on costs protection (see my 22 June 2019 blog post No Time To Be 21: Where Are We With Aarhus Costs Protection?).
The lack of statistics as to the effectiveness of the Planning Court is frustrating. I went into this in my 8 July 2018 blog post The Planning Court and Richard Harwood QC has also recently expressed similar frustrations in the July 2020 39 Essex Chambers planning, environment and property newsletter, How common are High Court planning challenges?
At Town we recently decided to do something about it. Working alongside Landmark Chambers, on 13 August 2020 we unveiled what we call the Planning Court Case Explorer. The Case Explorer brings together, in one dataset, all judgments of the Planning Court after a full hearing, since its establishment in March 2014 to the end of June 2020 quarter by quarter (25 quarters), together with all subsequent appellate judgments. That amounts to 377 judgments by the Planning Court, 105 by the Court of Appeal and 11 by the Supreme Court. The data captured includes the length of time between the decision under challenge and the ruling, parties, judge and subject matter, with a link to the bailii transcript and usually our Town Library summary, and with a variety of search options so as to be able to interrogate the data, by way of clicking into the tables.
Only now, through this data, can it be seen that the average duration between a decision under challenge and the first instance ruling in relation to that decision is 293 days and can the extent of further delay be seen when a case goes to the Court of Appeal (an average of 726 days between the decision and the ruling) or there after to the Supreme Court (1,000 days!). In the context of a six weeks’ deadline for bring the claim in the first place and then the initial permission stage, that 293 days’ figure in my view is not unreasonable. The subsequent delays on appeal are in my view wholly unjustifiable.
Which judge in the High Court has handed down the most rulings? Lang J (69 judgments), followed a long way behind by Holgate J (28). Which Court of Appeal judge in relation to appeals from rulings by the Planning Court? Unsurprisingly Lindblom LJ (56). For each judge there is a list of his or her judgments.
Which are the most frequent parties? The Secretary of State is way ahead of the field, unsurprisingly, with 267 cases. Second, the Royal Borough of Kensington and Chelsea (14 rulings). Third, Gladman Developments Limited (12).
There are limitations to the work – for instance we have not focused on win/lose statistics, given the variety of permutations of outcome, and we have not analysed the much larger number of claims which are sieved out at the permission stage. However, I hope that the analysis is a useful step towards greater transparency.
The work now has additional topicality. The Government is not just proposing to reform the planning system. On 31 July 2020 it launched an “independent panel to look at judicial review”.
As set out in the press statement:
“Specifically, the review will consider:
• Whether the terms of Judicial Review should be written into law
• Whether certain executive decisions should be decided on by judges
• Which grounds and remedies should be available in claims brought against the government
• Any further procedural reforms to Judicial Review, such as timings and the appeal process”
It is very good to see Celina Colquhoun, as a well-respected and leading planning barrister, on the panel, and I hope that the operation of the Planning Court can perhaps be held out as a useful precedent, with its proactive, relatively quick, case management and judges familiar with our subject area, meaning quicker hearings with, in my view, a greater degree of predictability of outcome. 493 planning cases going to a full hearing (including appeals) in just over six years? That’s not many at all in my view, given the inherent contentious nature of our work and the extent to which there is room for dispute and uncertainty. Despite all the usual gnashing of teeth, isn’t this one aspect of our planning system that is actually working (or at least would be once the Court of Appeal adopts the same approach to timescales as the Planning Court)? In fact, where would we be without regular clarification from the courts as to what the legislation actually means?!
That leads neatly onto a reminder about our free weekly Town Library Planning Court rulings subscription service. The registration page for this and other Town Library updates (e.g. planning appeal decision letters) is here: https://www.townlegal.com/news-and-resources/#the-town-library .
are probably the three words I most associate with the planning system in England, since you asked.
The main part of this post is a commentary by special guest and fellow Town partner Duncan Field on the Government’s Planning for the future white paper, published on 6 August 2020.
But before we get to that, some initial comments from me on timescales.
The consultation period on the white paper ends on 29 October 2020.
The aspiration in the document is that (subject to time extensions for recent plans) new local plans should be in place by the end of this Parliament, so by Spring 2024. Given that those local plans will take up to 30 months to be put in place under the new system proposed, the necessary primary legislation will need to have been passed and in force, with any necessary accompanying Regulations and guidance, by Autumn 2021.
By way of proxy for legislative timescales, the less ambitious Housing and Planning Act 2016 and Neighbourhood Planning Act 2017 each took around seven months to pass through the necessary Parliamentary stages, which would mean introducing a Bill by the beginning of 2021. One perhaps has to look back to the Localism Act 2011 for planning legislation of equivalent complexity. That took eleven months from soup to nuts.
Something is going to have to give – either there is going to be rushed consideration of these proposals, which still need significant refinement, or that “end of this Parliament” aspiration is going to have to be reconsidered before long.
But in any event, things can be expected to move quickly.
The timescales in that document for the four sets of proposals within it are as follows:
· changes to the standard method for assessing local housing need: “Following the outcome of this consultation, the Government will update the planning practice guidance with the revised standard method for assessing local housing need.”
· securing of First Homes through developer contributions in the short term until the transition to a new system: “We intend to begin by making planning policy changes, to ensure that clear expectations are set. However, to ensure that First Homes are delivered, nationwide, on a consistent basis, we are keeping under consideration the option to strengthen the policy through primary legislation at a future date. We also intend to introduce an exemption from the Community Infrastructure Levy for First Homes, to enable delivery prior to wider developer contribution reform. This would require changes to regulations. Lastly, we are also considering significant reforms to the system of developer contributions. We will ensure that First Homes willcontinue to be delivered under a reformed approach”
· supporting small and medium-sized builders by temporarily lifting the small sites threshold below which developers do not need to contribute to affordable housing: “Following the consultation, a decision will be taken on whether to proceed with this approach. If it is taken forward, this could be through the introduction of a Written Ministerial Statement in the Autumn.”
· extending the current Permission in Principle to major development: “Following this consultation, if we introduce Permission in Principle by application for major development, we aim to introduce amending regulations this Autumn, with the regulations expected to come into force by the end of the calendar year. Changes to the fee structure would require separate changes to the Planning Fees Regulations.”
The white paper is in my view a considered document and less radical than might have been expected, although certainly ambitious in its breadth. Proposals spin out of it, one after the other, often just in a sentence or two. There are of course areas where there needs to be further thought or explanation. For me, there are two big ones in particular:
⁃ the way in which housing numbers are to be set by the Government for individual authorities and how to resolve the inevitable tension between a swifter examination process and a process that allows proposals in a plan (and the basis for proposals not being in the plan) to be properly tested (particularly where the plan is going to be the equivalent of a series of outline planning permissions for its growth areas);
⁃ how this new infrastructure levy is really going to work and how obligations are going to be addressed that presently are dealt with by way of section 106 agreement, in particular the delivery of affordable housing.
There will also have to be a clear working through of the respective powers and responsibilities across the system, as between government, strategic authorities, local planning authorities and neighbourhoods.
I must say that I found Chris Katkowski QC’s explanations in the latest Have We Got Planning News For You episode really helpful in bringing the proposals, and the thinking behind them, to life. And, boring to say, there is no substitute for reading the actual document.
Planning for the Future begins with some fairly combative language, referring to “our outdated and ineffective planning system” and drawing comparisons with a patched up building which needs to be torn down.
In truth the Government’s proposals do not go quite as far as that and in practice, to continue with the same analogy, we might end up with a better and more sustainable outcome if we were to save the parts of the “patched up building” which have architectural merit. The biggest problem with the current system is not that it is all inherently bad but that it is not sufficiently resourced; it is a pity that planning reforms by successive Governments have never really grappled with that central issue. The good news on this occasion is that the new system will be accompanied by a comprehensive skills and resources strategy for local authorities and key participants in the system; let’s hope the Government delivers on that.
Further on in the document there are some powerful words from the Secretary of State which bring home just how important a time this is for the planning system and what it can deliver. It is hard to disagree with any of this:
The outbreak of COVID-19 has affected the economic and social lives of the entire nation. With so many people spending more time at home than ever before, we have come to know our homes, gardens and local parks more intimately. For some this has been a welcome opportunity to spend more time in the place they call home with the people they love. For others – those in small, substandard homes, those unable to walk to distant shops or parks, those struggling to pay their rent, or indeed for those who do not have a home of their own at all – this has been a moment where longstanding issues in our development and planning system have come to the fore.
Onto the objectives for reform, which can be summarised as follows:
• Reduce complexity and with it, uncertainty and delay.
• In doing so, deliver a more competitive market with a greater diversity of developers.
• Remove the discretionary nature of individual development management decisions and replace it with a rule-based system of development control.
• In doing so, reduce planning risk and the cost of capital for development.
• Reduce the time it takes to produce a local plan.
• Simplify assessments of housing need, viability and environmental impacts.
• Restore public trust and encourage more widespread public participation.
• Get better at unlocking growth and opportunity, encouraging beautiful new places, supporting town and city centres and revitalising existing buildings as well as new development.
• Harness digital technology.
Linked to this is a long list of desired outcomes including the user experience, home ownership, access to infrastructure, economic growth and innovation.
We then come to the main proposals which the Government intends to bring forward:
1. Local plans
a. These will be simplified so that they only identify land for development, the sites that should be protected and the development that can take place. There would be three categories of land:
i. Growth – sites suitable for comprehensive development which, once allocated, will have outline approval for development.
ii. Renewal – sites where smaller scale development is appropriate, which would benefit from a statutory presumption in favour of development once allocated.
iii. Protected – sites with environmental or cultural characteristics where development should be subject to more stringent controls.
An alternative approach might be a more binary system (growth and renewal with permission in principle versus protected areas) or more scope for the existing development management approach in areas other than those allocated for “growth”.
b. Plans should become digital, visual and map-based, interactive and data rich, using a standardised approach to support open access.
c. Local plans (and neighbourhood plans) will be more focused on giving clear area-specific requirements for land that is allocated for growth and renewal including design codes; generic development management policies and duplication of national policy and guidance needs to be avoided.
d. Plans should be subject to a single test of achieving sustainable development instead of the current tests for soundness and the duty to co-operate. There would be no Sustainability Appraisal and instead this would be replaced by a simplified process for assessing the environmental impact of plans.
e. Local plans would meet housing need by reference to a standard method for establishing housing requirements developed and set at a national level; this would mean distributing the national housebuilding target of 300,000 new homes annually, and one million homes by the end of the Parliament, taking into account local factors including constraints, opportunities and affordability. The Housing Delivery Test would stay.
f. Local plans would have to be brought forward by reference to a fixed 30 month statutory timescale with six stages and individual timings for each stage.
g. Local planning authorities would be under a duty to review their plans every 5 years; powers of intervention would remain such as the issuing of directions and preparation of a plan in consultation with local people.
h. Neighbourhood Plans to be retained but with more focus on form of development to reflect the proposals for Local Plans.
This is a refreshingly clear vision of what local plans might become and a digitalised system would be transformative for the user experience and public engagement. However, there are some big questions around how to encourage strategic planning across local authority boundaries for the bigger than local issues (the Government is open to suggestions), how in practice the “sustainable development” test would work and, linked to that, how robust the new environmental assessment process will be.
Equally as important, what will the effect of these promised changes be on current local plans? Without further incentives or assurances around their continuing effect in any transitional arrangements as we switch over to the new system, there must be a real concern they will be halted in their tracks.
2. Development Management
a. As indicated above, growth areas allocated in a local plan would have outline permission for the principle of development; details would be agreed and full planning permission achieved through a new reserved matters process, a local development order or possibly, on bigger sites, via a development consent order.
b. Renewal areas would benefit from a new statutory presumption in favour of development and would benefit from either a new automatic consenting route where specified forms of development meet design and other prior approval requirements, a faster planning application process or a local or neighbourhood development order.
c. Proposals which do not conform to the local plan in renewal and growth areas could still come forward, exceptionally, through a planning application process.
d. In protected areas, proposals will have to be brought forward via a planning application (subject to any permitted development rights or local development orders) and will be judged against the NPPF.
e. Generally, the development management process will be based on a more streamlined end-to-end process with firm deadlines for determination through a mix of:
i. Digitalisation;
ii. Data access;
iii. Shorter and standardised applications with reduced or limited supporting material;
iv. A standardised approach to technical information, conditions and developer contributions; and
v. Delegation of detailed planning decisions to planning officers where the principle of development has been established.
f. The Government will build in incentives for prompt determination of applications by local planning authorities such as deemed approval of some applications or refunds of application fees.
g. The process will still be subject to call-in powers and appeals but the Government expects the volume of call-ins and appeals to reduce over time.
h. There will be encouragement for faster build out by making provision in local plans/design codes for a variety of development types by different builders (picking up on the conclusions of the Letwin Review).
This vision for the new development management system feels less clear: permission in principle and outline planning permission are used interchangeably in places as a consequence of land being allocated for growth; however, over and above this, there appears to be provision for a “full” planning permission through a new reserved matters system or local development orders or even development consent orders. Would this not remove a lot of the benefit of allocating land for growth? There is also a myriad of possible ways in which land allocated for renewal might gain consent and, in the meantime, we retain the current planning application process as well. If the Government is not careful it might add to the complexity of development management.
Certainly, we can all get on board with the much-needed streamlining of the development management process from end to end, with more standardisation, reducing the quantity of application documents and increased use of digital technology. However, resourcing this change will be key to its success.
3. Building better, building beautiful and sustainable places
Design and place-making is still high up on the Government’s political agenda. Proposals in this space include the following:
a. A National Model Design Code to be published in the Autumn which will work alongside the National Design Guide and the Manual for Streets; together these are expected to have a bearing on design of new communities and to guide decisions on development. (This will be an early entrant into the current planning system.)
b. Local guides and codes are to be prepared wherever possible to reflect local character but need to have input from the local community before they are given any weight in the planning process.
c. A new expert body will be set up to help local authorities make use of design guidance and codes, as well as performing a wider monitoring and challenge role for the sector.
d. The much-heralded “fast-track” for beauty will be achieved through:
i. The NPPF – which will have provision for schemes that comply with local design guides and codes to be approved quickly;
ii. Legislation to require that sites in growth areas should have a masterplan and site-specific code as a condition of the permission in principle which is granted through allocation in the local plan; and
iii. Widening permitted development rights through the use of “pattern books” for different building types.
e. The NPPF will require targeted consideration of measures to support climate change mitigation and adaptation. (In our view, policy has been playing catch-up on climate change for some time – this is long overdue and should be welcomed.)
f. There will be a quicker and simpler framework for assessing environmental impacts, stepping away from the current frameworks such as Strategic Environmental Assessment, Sustainability Appraisal and Environmental Impact Assessment. The key requirements for the new framework will be:
i. early consideration;
ii. clear and easy to understand; and
iii. avoidance of duplication.
A further consultation on this is expected in the Autumn.
g. The Government intends to review and update the planning framework for listed buildings and conservation areas, to ensure their significance is conserved while allowing, where appropriate, sympathetic changes to support their continued use and address climate change.
h. Improvements to the energy efficiency standards for buildings will be brought forward to help meet the 2050 net zero commitment.
The intention here is clear and consistent with the recent focus of the Government on design and beauty in the planning system. The area with the most loaded questions is the promised framework for assessing environmental impact; in our view, there is clear scope to reduce the voluminous and highly technical nature of the current framework but now is not the time to water it down in terms of its ambit and its protective function. We will have to wait until the Autumn to find out more.
4. Infrastructure
There are radical proposals for the funding of infrastructure:
a. Replace S106 obligations and the current version of Community Infrastructure Levy with a new Infrastructure Levy calculated as a fixed proportion of the development value above a threshold, with a mandatory, nationally-set rate or rates (potentially variable by area).
b. This new levy will be charged on the final value of a development (or an assessed sales value where the development is not sold, e.g. build to rent) by reference to the rate in force when planning permission is granted. This would have to be paid before occupation.
c. Local authorities would be able to borrow against Infrastructure Levy revenues so that they could forward fund infrastructure.
d. The London Mayoral Community Infrastructure Levy and similar strategic Community Infrastructure Levies in combined authorities could be retained.
e. The Infrastructure Levy Could be extended to capture changes of use without additional floor area and through permitted development.
f. The new levy would be extended to fund affordable housing. Allowance would be made for in-kind delivery on-site, which could be made mandatory where an authority has a requirement, a capability to deliver on site and wishes to do so. In those circumstances local authorities would be able to specify the form and tenure of the on-site provision. The Government anticipates that there would need to be a considered policy approach to the risk of imbalance between the value of the agreed in-kind delivery and the fluctuating nature of the levy liability, contingent as it will be on the development value.
g. Local authorities could be given more freedom on how they spend the levy.
There is a lot of detail to be worked through here. Setting the new levy at a level which does not deter development (and indeed land supply through the price paid by developers) will be key and a difficult issue to judge.
The Government will also need to be scrupulous in ensuring that affordable housing continues to come forward using levy funds and still comes forward as part of mixed and balanced communities.
The removal of the blunt and inflexible tool that we have come to love or hate in the form of CIL is welcome in our view and with it the removal of a considerable amount of confusing and time-consuming red tape. For practical reasons – not least delivering site-specific solutions for development – we are not sure we are witnessing the end of S106 obligations or an equivalent just yet but they will undoubtedly be slimmed down.
5. Delivery
The consultation document ends with a few final proposals and thoughts from Government on the delivery of a new planning system:
a. As a first step there is a parallel consultation on changes to the current system including extension of Permission in Principle (by application to major development), the standard method for assessing local housing need, First Homes and supporting SME builders by temporarily lifting the small sites threshold below which developers do not need to contribute to affordable housing. More here: https://www.gov.uk/government/consultations/changes-to-the-current-planning-system
b. The Government sees a potential delivery role for development corporations.
c. The reforms are considered likely to reduce judicial review risk.
d. The need for resources and skills is recognised and will be addressed through a comprehensive strategy. In principle, the Government’s view is that the cost of operating the new planning system should be principally funded by the beneficiaries of planning gain – landowners and developers – rather than the national or local taxpayer. Funding may also be achieved through application fees and potentially the new infrastructure levy or- to a limited extent – general taxation.
e. The Government intends to strengthen the powers for local planning authorities to enforce against breach of planning control and provide incentives for enforcement action to be taken.
To end where this overview began, resources are key and a comprehensive strategy to ensure the sufficiency of funding and skills will be very welcome, as long as it does what it says on the tin. This will be vital to the success of the new system.
We know now what the Government wants to achieve. It is up to all of us in the sector to help them make it work and if parts of the system are worthy of retention for their “architectural” merit, to explain why that is, with reference to the Government’s objectives.
SIMONICITY 