Greater Flexibility For Planning Permissions (Now I’m Just Showing My Age)

Such a lot of hyperbolic talk and not enough doing.

The Conservatives’ Open Source Planning 2009 manifesto document started with this passage:

“The planning system is vital for a strong economy, for an attractive and sustainable environment, and for a successful economy. At present, the planning system in England achieves none of these goals. It is broken”.

And then Boris Johnson in the foreword to Planning for the Future (August 2020):

“…we approach the second decade of the 21st century [the incredible potential of this country] is being artificially constrained by a relic from the middle of the 20th – our outdated and ineffective planning system.”

Well fix it, dear Henry, dear Henry, as the old song went. But, of course, it wasn’t broken in 2009 and it – just about – wasn’t outdated or ineffective in 2020. In 2023? I’m not so sure.

Given that the Government is currently refusing to accept there is an NHS crisis, I wonder if it would still accept that there is a housing crisis? Is it concerned by the number of local authorities deciding to pause or abandon preparation of their local plans? I’m genuinely unsure.

But let’s ignore for the moment the political direction in which this old vehicle should be headed and look instead at how the engine is working – can it actually deliver us to wherever it is we want to go?

Instead, let’s just focus on development management for a moment. In what should be a straightforward matter of processing, in accordance with statutory timescales, planning applications so as hold firm against the unacceptable and to approve the rest without delay , in form that that can lead to development taking place, and the public benefits which flow from that, there are currently at least two really horrible feedback loops, or vicious circles, that are holding back even the best projects:

• Under-resourced planning departments, precautionary in nature, burdened with being the custodians of so many different policy objectives (climate change, health, building safety, beauty, air quality – you name it), take increasingly longer to process applications and their members’ decision-making is increasingly unpredictable (heads turned by lobby groups and hints from Government as to changing approaches). This leads to more applicants deciding to appeal so as to achieve a certain timescale and objective consideration of the issues. This places more work on officers, slowing down consideration of other applications. Which then also end up at appeal. And the slower the application and appeal process, the more likely that new issues arise, sending the applicant back to an earlier stage in the process again.

• The demands on an applicant to tie down elements of a project at too early a stage, together with short implementation timescales and uncertain processes for processing scheme changes, lead to much unnecessary activity both in (a) keeping planning permissions alive with relatively minor works so that a permission that has taken years and a huge amount of money to achieve is not prematurely lost before the development is in a position to proceed and in (b) using clunky work-arounds – various combinations of section 96A, section 73 and/or drop-in applications – in order to refine proposals so that the permission is for a development which can actually be built. The longer the process for securing planning permission in the first place, the more likely that the resultant planning permission will need to be varied. The more certainty that the authority seeks to achieve with tightly drawn development parameters and a long list of planning conditions, the more likely that changes will be required.

I suspect that the Government is unaware of the true extent of the issue. I was looking at the latest statistics from December 2022. 86% of major applications last year were apparently determined “within 13 weeks or agreed time limit”. “or agreed time limit” is the clue, with time extensions routinely agreed so as to safeguard against premature refusal. Can anyone find where in the tables one might find how long an application for planning permission takes on average, from submission (usually after a lengthy and expensive pre-app process) to completion of section 106 agreement?

Another awkward reality to introduce at this point: projects need to be viable in order to proceed. Private sector development will not take place unless, broadly speaking, (1) the land owner will be paid by the developer an amount sufficiently above existing use value to make it make it worth his or her while to sell, and above what the land may be worth for any other development which could be carried out on the land (2) the developer can achieve a profit which makes undertaking the development commercially worthwhile, having regard to the financial risks inherent in the project, and can be sufficiently confident that there will be a market for the end product and (3) the capital deployed can achieve a better return than if it were to be deployed elsewhere. At present, with construction cost inflation, increased political risks, uncertainties as to the economy, is it any wonder when development is stalled; when development projects which may previously have been viable no longer make any financial sense on the terms negotiated, or when scheme changes are needed to reflect changing commercial (or indeed Building Regulations) requirements? I focus on private sector development given how reliant as a country we are on the private sector to deliver housing in particular, but of course most of the same economic realities apply, or should apply, to development carried out by the public sector.

None of this appears to be recognised in current Government announcements. Far from it. Instead, the rhetoric is to double down on developers who do not build out quickly, in genuflection to the myth of land-banking – with the Levelling-up and Regeneration Bill’s provisions about development commencement notices, changes to the completion notices regime and even a power for local planning authorities to decline to determine applications in cases of earlier implementation. As if these measures were ever going to force a developer to build out a permission for a scheme where the funding wasn’t yet in place, where there was not yet a ready market or where the project was no longer viable! Instead, these measures will simply discourage many from entering the process in the first place, rather than risk abortive expenditure, even if the odds are that the scheme will go ahead. Why take the additional risk?

To people like me, the 2007 – 2008 global financial crisis seems like yesterday. Development almost came to a halt. Whilst it seemed too slow at the time, the then Government responded with measures that were summarised in its guidance document, Greater Flexibility For Planning Permissions, published first in 23 November 2009 and revised  1 October 2010). Look at the 2009 impact assessment:

“In current economic circumstances, there is a reduced take-up of existing permissions. Where permissions lapse, there are costs and delays associated with providing and processing an application for a fresh planning permission.

There is also a broader need for added flexibility to allow developers and local planning authorities to make non-material amendments to existing planning permissions and to clarify and streamline the process for making minor material amendments. There is currently a lack of clarity about what can be done, which is resulting in unnecessary expense and time for both parties.”

The guidance:

• set out the temporary arrangements that had been brought in to extend the life of planning permissions. “This measure has been introduced in order to make it easier for developers and local planning authorities to keep planning permissions alive for longer during the economic downturn so that they can more quickly be implemented when economic conditions improve.”

• explained about the then new section 96A process for non-material amendments to planning permissions, introduced on 1 October 2009 pursuant to the Planning Act 2008.

• was encouraging as to the use of section 73 for “minor material amendments” to planning permissions, following the specific recommendations in the Killian Pretty Review: Planning Applications – A Faster and More Responsive System: Final Report (November 2008) that “Government should take steps to allow a more proportionate approach to minor material changes in development proposals after permission has been granted”.

The guidance was withdrawn on 7 March 2014 and replaced with the Flexible options for planning permissions section of what was then the new Planning Practice Guidance. In the transition, somehow the policy thrust of the earlier guidance was lost – the notion that flexibility can be a good or even necessary thing.

If you recall, the coalition Government subsequently introduced by way of the Growth and Infrastructure Act 2013 new sections 106BA, BB and BC into the Town and Country Planning Act 1990, providing a new application and appeal procedure, to review affordable housing obligations on the grounds of viability. Whilst helpful in some situations, it was certainly abused in others, and it was then repealed in 2016.

More recently of course, during the pandemic there were temporary measures to allow for the extension of time limits on planning permissions.

The Levelling-up and Regeneration Bill has its second reading in the House of Lords on 17 January 2023 and, when it comes to greater flexibility for planning permissions, clause 102 (introducing new Section 73B into the Town and Country Planning Act) remains as a small step in the right direction. Section 73 will continue to exist but section 73B provides for an alternative procedure for amending schemes, given that as a result of the Court of Appeal’s ruling in Finney, section 73 cannot be used for amending the description of development on a planning permission. Section 73B will allow for an application to be made for planning permission to be granted for an amended form of a previous planning permission. Planning permission will only be able to be granted “if the local planning authority is satisfied that its effect will not be substantially different from that of the existing permission”. It will not be able to be applied for in relation to a section 73 permission. The local planning authority “must limit its consideration to those respects in which the permission would, if granted…differ in effect from…the existing permission”.

My worry with section 73B is that unless there is really encouraging guidance from DLUHC, local planning authorities will be cautious as to the “not substantially different” test. After all, where does it rest on the spectrum between “non-material amendment” and “fundamental alteration”?

It seems to be that we will now have the following procedural options:

• Section 96A for non-material amendments

• Section 73 for amendments which may be material but which are not a fundamental alteration to the approved scheme and which do not necessitate a change to the description of development on the face of the original planning permission.

• Section 73B for amendments which do not approve development whose effect will be substantially different from that of the existing planning permission

• A fresh application for planning permission (encompassing also the Supreme Court’s suggested solution given in paragraph 74 of  its Hillside judgment: “Despite the limited power to amend an existing planning permission, there is no reason why an approved development scheme cannot be modified by an appropriately framed additional planning permission which covers the whole site and includes the necessary modifications”)

• In a case where the existing planning permission is, in the words of the Supreme Court in Hillside, “severable”, our old friend the “drop-in permission”. Unmentioned in Hillside, not to be found in legislation or guidance but still in my view clearly possible in the right situation.

Wouldn’t it be useful for DLUHC to publish a document now with the can-do tone of Greater Flexibility for Planning Permissions, recognising the obstacles in the way of achieving timely development, and encouraging local planning authorities to use these procedural tools available to them where necessary, so as not to delay or frustrate development, with suggestions as to how the appropriate tests should be approached? At present the whole thing is a lottery, dependent on the particular views of individual planning departments and even individual officers.

And wouldn’t it be useful if, instead of the hyperbole, there could be an honest look at the real stresses and strains the current system is under and if there could be a tightening of processes in the same way as Rosewell achieved for the planning appeals system? And above all, if planning departments could have available to them sufficient staff: well-trained, well-managed and well-motivated?

And now the prospect of strikes at the Planning Inspectorate. An interesting year ahead, folks.

Simon Ricketts, 14 January 2023

Personal views, et cetera