The Neighbourhood Planning Bill v Conditions

The Neighbourhood Planning Bill proposes some important changes to the planning conditions regime. DCLG published its Improving the Use of Conditions consultation paper  on 7 September 2016 alongside the Bill  (with a consultation deadline of 2 November 2016). 
There are two main elements to the proposals.
Restriction on pre-commencement conditions
I blogged  back in June when the proposal to clamp down further on pre-commencement conditions was first announced. 
As it happens, in my view what is proposed in clause 7 of the Bill, that pre-commencement conditions should not be imposed without the applicant’s written agreement, is pretty sensible as a cross-check that restrictions are not introduced without discussion. Of course, it is not a panacea and in some cases the applicant may be faced with a gun to the head – accept the condition or the application is will be refused – but in many more cases there will be the opportunity for consensus to be reached and the rigmarole avoided of subsequent 73 or 96A applications to morph conditions into a regime that does not unreasonably impede development. 
Indeed, why shouldn’t all conditions be agreed in draft with the applicant wherever possible?
Power for the Secretary of State to ban conditions of a prescribed description
This is more problematic. Clause 7(2) provides that such a ban must first be consulted upon and must only be for the purposes of ensuring that any condition meets the traditional tests of being
– necessary to make the development acceptable in planning terms;

– relevant to the development and to planning considerations generally;

– sufficiently precise to make it capable of being complied with and enforced; and

– reasonable in all other respects. 

Table 1 in the consultation paper lists various very general categories of conditions that should not be used (as per current planning practice guidance) and seeks views on whether any of them should be expressly prohibited by legislation. One wonders what the point of this is. The list in table 1 is very general eg 
– “conditions which unreasonably impact on the deliverability of a development – eg disproportionate financial burden”

– “conditions which duplicate a requirement for compliance with other regulatory requirements – eg Building Regulations”

What will it add to have these general principles in legislation in addition to policy? Who is going to challenge the imposition of conditions by way of the courts, rather than apply to remove the offending condition by way of section 73, with the ability to appeal to the Planning Inspectorate?

Generally, as with section 106 agreements, the exercise of drafting and negotiating conditions is getting increasingly fraught. Some examples:
The Darnhall appeal
The Secretary of State dismissed an appeal for residential development at Darnhall School Lane, Winsford, Cheshire on 7 July 2016, against his inspector’s recommendations. The decision letter  contains some interesting conclusions on a series of draft conditions offered by the appellant:
– training and employment – “not sufficiently precise and would be difficult to enforce, partly because it would be difficult to detect a breach”

– self-build housing – “not necessary to make the scheme acceptable in planning terms. Moreover…there are still concerns raised by the Council as to the effect on affordability which leads the Secretary of State to find that this condition is not reasonable in all other respects”

– local builders – “not necessary to make the development acceptable in planning terms and would not be strictly relevant to planning policy. Dependent on the builders or companies available through the build-out of the development the condition would be difficult to enforce, neither would it be precise, pr reasonable in all other respects”. 

– local procurement – “would not be necessary to make the development acceptable in planning terms. Neither is it strictly related to planning. The condition would be difficult to enforce, in part because it could prove difficult to detect a breach. The Secretary of State also considers that it is unclear what the position is in relation to the availability of business within the specified area to meet the criteria and therefore whether this condition would be reasonable in all other respects”. 

How does this ultra-rigid, purist, approach, fit with the approach taken by many LPAs? It doesn’t at all, obviously. The decision is under challenge, with Chris Young of No 5 Chambers acting for the appellant/claimant. 
“Tailpiece” conditions

“Tailpiece” conditions, along the lines of “unless otherwise approved by the Council” are pretty irresistible to those drafting conditions, seemingly offering a way to sidestep the need for subsequent formal applications under section 73 or 96A where changes are required, as they often are. However their use has been successfully challenged in a series of cases, for instance R (Butler) v East Dorset District Council  (Deputy Judge Rhodri Price-Lewis QC, 28 June 2016), Hubert v Carmarthenshire County Council  (Cranston J, 5 August 2015) and R (Warley) v Wealden District Council  (Deputy Judge Rabinder Singh QC, 8 July 2011). They should only be used where their scope is is closely defined in terms of the criteria to be applied by the decision maker or in terms of only extending to minor changes. 

Sustainability
Eric Pickles’ ministerial statement  25 March 2015 announced the withdrawal of the Code for Sustainable Homes and that until amendments to the Planning and Energy Act 2008 are introduced (which are still awaited) the Secretary of State would “expect Local Planning Authorities to take this statement of the government’s intention into account in applying existing policies and not set conditions above a Code Level 4 equivalent”. 
The same announcement advised LPAs that they should only set additional standards to those contained in the Building Regulations if they are able to justify why this is required and provide evidence to that effect. 
The planning system’s flexibility can be a great asset in negotiating planning permissions that both protect the public interest and meet the applicant’s requirements. We need to be careful that by ad hoc measures this flexibility is not lost – or that the process of issuing a planning permission becomes more routinely a negotiation between respective legal teams and tiptoe around the elephant traps, as it often already is on large schemes. 
Simon Ricketts 9.9.16

Personal views, et cetera

Emerging Neighbourhood Plans (nudge, nudge)

Call me old-fashioned but in my view legislation should change, consolidate or codify law, not simply serve as a political nudge. I referred in my last blog post  to section 1 of the Localism Act. Clause 1 of the new Neighbourhood Planning Bill  is out of the same stable. 
Clause 1 of the Bill amends section 70 of the Town and Country Planning Act 1990 so that, in determining planning applications (in England), a decision maker must have regard to a “post-examination draft neighbourhood plan, so far as material to the application”. The Bill’s explanatory notes  explain that this is “intended to strengthen neighbourhood planning by ensuring that planning decision-makers take account of well-advanced neighbourhood development plans” and to give such plans “full legal effect at an earlier stage”. 

However, plainly, a draft development plan, particularly one that has gone through independent examination is a material consideration for the purposes of section 38(6) of the Planning and Compulsory Purchase Act 2004 (determination to be in accordance with the development plan unless material considerations indicate otherwise) and, as Richard Harwood QC points out in his excellent summary  of the current Bill, not only is it material but it is likely to have considerable weight, due to the stages that it has been through, given the advice in paragraph 216 of the NPPF:

From the day of publication, decision-takers may also give weight to relevant policies in emerging plans according to:

● the stage of preparation of the emerging plan (the more advanced the preparation, the greater the weight that may be given);

● the extent to which there are unresolved objections to relevant policies (the less significant the unresolved objections, the greater the weight that may be given); and

● the degree of consistency of the relevant policies in the emerging plan to the policies in this Framework (the closer the policies in the emerging plan to the policies in the Framework, the greater the weight that may be given). “

Specific advice in relation to emerging neighbourhood plans is in the PPG:

“Planning applications are decided in accordance with the development plan, unless material considerations indicate otherwise. An emerging neighbourhood plan may be a material consideration. Paragraph 216 of the National Planning Policy Framework sets out the weight that may be given to relevant policies in emerging plans in decision taking. Factors to consider include the stage of preparation of the plan and the extent to which there are unresolved objections to relevant policies. Whilst a referendum ensures that the community has the final say on whether the neighbourhood plan comes into force, decision makers should respect evidence of local support prior to the referendum when seeking to apply weight to an emerging neighbourhood plan. The consultation statement submitted with the draft neighbourhood plan should reveal the quality and effectiveness of the consultation that has informed the plan proposals. And all representations on the proposals should have been submitted to the local planning authority by the close of the local planning authority’s publicity period. It is for the decision maker in each case to determine what is a material consideration and what weight to give to it.
The provision in the Bill appears to be rather an after-thought, and perhaps simply a nudge to decision-makers, given that it wasn’t trailed in the Government’s February 2016 technical consultation on implementation of planning changes  , 2 September 2016 response to consultation  or indeed the 7 September 2016 technical consultation on the neighbourhood planning provisions of the Bill  published on the same day as the Bill!

What will make more of a difference in practice to the interplay between emerging neighbourhood plans and decision-making on planning applications will be the increased speed with which neighbourhood plans are likely to be reaching the post-examination stage, due to a timetable within which LPAs must undertake neighbourhood planning functions, prescribed by Regulations under section 140 of the Housing and Planning Act 2016 coming into force on 1 October 2016, meaning that a developer preparing a planning application needs to be increasingly aware that a draft neighbourhood plan may be on its way to being a material consideration before the application is determined. 

The previous planning minister on 7 July 2016 extended  for a further six months his policy to consider recovering for his own determination planning appeals made where a neighbourhood plan proposal has been submitted to an LPA (although increasing the threshold from ten to 25 units). 
The weight to be attached to emerging neighbourhood plans (not addressed by clause 1 as it is a matter for the decision maker as long as properly reasoned), including circumstances where the neighbourhood plan is ahead of the relevant local plan (again not addressed in the Bill), has of course frequently arisen in legal challenges (eg Woodcock Holdings Limited v Secretary of State  (Holgate J, 1 May 2015) and R(DLA Delivery Limited) v Lewes District Council  (Foskett J, 31 July 2015 – Court of Appeal hearing fixed for 15 and 16 November 2016) and in appeal decisions (eg Sunley Estates/Chichester decision letter  25 April 2016).
Equivalent conflicts will continue to arise, notwithstanding clause 1. Indeed it may be easier for third parties to challenge a decision where the LPA can be shown not to have expressly taken into account a post-examination draft neighbourhood plan. 
Simon Ricketts, 8.9.16
Personal views, et cetera

Section 106 Disagreements

If CIL is to beat a retreat in relation to major developments as rumoured (June 2016 blog post  – although we’ll now need to wait for Parliament to resume in the Autumn before we learn any more of the CIL working group’s thinking) it’s more important than ever that the section 106 process works as well as it can. Used well, it is a powerful and effective mechanism and there is no need at all for negotiations to become protracted.
Unfortunately the Government continues to snatch at the issues. Section 106 agreements come in all shapes and sizes, from the simplest agreement to secure a specific contribution tocomplex agreements in connection with urban extensions and large mixed use projects, amounting to public/private sector agreements to govern the delivery, over decades hand in hand with development phases, of many hundreds of millions of pounds of social and physical infrastructure – and where issues such as the appropriate ring-fencing of obligations to appropriate parts of the site, enforcement protocols, reasonable future-proofing, interaction with CIL, viability review mechanisms and long-term maintenance arrangements can come to the fore in a variety of permutations.  
Legislative changes

Regulations 122 and 123 of the CIL Regulations 2010 have set trip hazards for LPAs and developers: section 106 agreements that do not comply with those regulations which are relied upon by LPAs in granting planning permission render the LPA’s decision liable to judicial review by third parties. 

Regulation 122 placed in statutory form the previous policy test that a planning obligation must be necessary to make the development acceptable in planning terms, directly related to the development and fairly and reasonably related in scale and kind to the development. Examples of Regulation 122 leading to permissions being quashed include Borough of Telford and Wrekin v Secretary of State  (Court of Appeal, 2 April 2014), Oxfordshire County Council v Secretary of State  (Lang J, 3 February 2015 – monitoring obligations) and R (Mid-Counties Co-operative Limited v Forest of Dean DC  (Singh J, 6 April 2015). 

Regulation 123(2) bites against planning obligations in relation to the funding or provision of infrastructure on the LPA’s Regulation 123 list. Regulation 123(3) introduced the “pooling” restriction, where five or more planning obligations have been entered into within an LPA’s area since 6 April 2010 that provide for contributions to the same infrastructure project or type of infrastructure.

It is often difficult to get to the bottom of whether these restrictions would be, or have been, breached as well as how “infrastructure project” or “type of infrastructure” is to be interpreted. It is difficult enough negotiating a satisfactory mechanism to overcome legitimate planning concerns without having to guard against the risk of a judicial review based on alleged non-compliance with these broadly stated requirements. 

These are not the only trip hazards of course – for example there is the often-overlooked requirement in Article 40(3)(b) of the Development Management Procedure Order 2015 for the LPA to put “proposed” planning obligations on the planning register (although not every travelling draft amounts to a planning obligation that is “proposed” eg see R (Police and Crime Commissioner for Leicestershire) v Blaby District Council  (Foskett J, 27 May 2014)). 

Further constraints are still to come, via section 5 of the Housing and Planning Act 2016 (the “starter homes requirement” to be delivered in a specified form by way of section 106 agreement) and via section 159 (which enables the Secretary of State to render unenforceable specified planning obligations in relation to affordable housing). Following the Government’s victory in Secretary of State v West Berkshire Council  (Court of Appeal, 11 May 2016) the Planning Practice Guidance now again has the exemption introduced in 2014 for developments of 10 units or fewer and developments with less than 1,000 square metres of floor space from the requirement to contribute towards affordable housing.

We also now have (albeit awaiting draft regulations) the dispute resolution mechanism introduced by section 158 and Schedule 13 of the Housing and Planning Act 2016. 

The explanatory notes to the Act explain the mechanism as follows:

Appointment of a person to help resolve disputes

This Schedule requires the Secretary of State to appoint someone to resolve issues that are holding up the completion of planning obligations. 

The duty to make an appointment arises where certain conditions are met. There must be an existing planning application. The local planning authority must be likely to grant planning permission if satisfactory planning obligations are entered into. There must usually be a request from the local planning authority or from the applicant. 

The Secretary of State can also make regulations setting out:

who, other than the local planning authority and applicant, could make a request for the appointment of a person;

the timing and form of requests;

that a person can be appointed if outstanding issues have not been resolved within set timeframes (regardless of whether there is a request); 

further detail about appointments, including about when a request cannot be made and about when a request could be refused; 

what qualifications or experience the appointed person must have; and

any fees payable.

There are temporary restrictions on the steps that can be taken in relation to the application until the dispute resolution process concludes.

The appointed person 

The local planning authority and the applicant must co-operate with the appointed person and comply with any reasonable requests. Regulations can also enable the appointed person to award costs if one of those parties fails to comply or behaves unreasonably.

The appointed person must produce a report that sets out:

the unresolved issues and the steps taken to resolve them; and

the terms agreed, or where the terms have not been agreed, recommendations as to what terms would be appropriate.

The appointed person must take into account any template or model terms published by the Secretary of State. Regulations can also set out other details about what the appointed person must and must not take account of.

The local planning authority must publish the report in line with any requirements set out in regulations. Regulations may also provide a process for making revisions to a report.

An appointed person may be appointed to consider two or more planning applications at the same time if the same or similar issues arise under them. In such circumstances a single report may be produced.

After the appointed person’s report

After the appointed person issues a report, a local planning authority must comply with the obligations in this Schedule.

Where planning obligations are entered into in line with the report, then the local planning authority must not refuse permission for reasons relating to the appropriateness of the planning obligations.

The parties may agree different terms, but they will only have a limited period to do so, which will be set out in regulations.

Where no obligations are entered into within a set period, the application must be refused. This is to ensure that the matters come to a conclusion quickly.

Regulations can also set out restrictions on the local planning authority’s ability to ask for additional obligations at this time. Any such restrictions would be designed to ensure that the report is given proper effect by the local planning authority. Regulations can also set out:

periods for determining planning applications after a report is issued; 

circumstances or cases where the consequences in this Schedule don’t apply; and

any further steps required to be taken by the appointed person, the local planning authority or the applicant in connection with the report. 

Where an appeal is lodged, the person determining the appeal must have regard to the report but is not bound by it.”

Will this complicated process be much used or lead to quicker, better, negotiations? My reading of a number of the responses to its February 2015 technical consultation  was that it had less than whole-hearted support from even the private sector. You may remember that due to the impending General Election we then had the Government’s response  in record time the following month, with its proposed way forward in section 4.

In reality, an impasse in section 106 agreement negotiations is rarely down to one defined issue capable of resolution but can relate to a whole host of inter-linking factors, potentially involving parties beyond the LPA and applicant for example other authorities (county and district not seeing eye to eye on “county” issues is a growing concern), land owners and/or funders. 

Other legislative changes come and go, for example the time-limited section 106BA ability (until 30 April 2016) to apply to amend affordable housing provisions in section 106 agreements where necessary to render development viable, introduced in the Growth and Infrastructure Act 2013, announced in the Government’s 2015 Autumn Statement as to be extended and then abruptly left to expire.

Policy changes

The NPPF has only brief references to the section 106 agreement process (with nothing on timescales for their completion):

“203. Local planning authorities should consider whether otherwise unacceptable development could be made acceptable through the use of conditions or planning obligations. Planning obligations should only be used where it is not possible to address unacceptable impacts through a planning condition.

204. Planning obligations should only be sought where they meet all of the following tests:

● necessary to make the development acceptable in planning terms;

● directly related to the development; and

● fairly and reasonably related in scale and kind to the development.

205. Where obligations are being sought or revised, local planning authorities should take account of changes in market conditions over time and, wherever appropriate, be sufficiently flexible to prevent planned development being stalled. “
At the same time as the March 2015 Government technical consultation response we had a very minor beefing up of the planning obligations section of the Planning Practice Guidance  :

“When should discussions on planning obligations take place?

“Discussions about planning obligations should take place as early as possible in the planning process, including at the pre-application stage. This will prevent delays in finalising those planning applications which are granted subject to the completion of planning obligation agreements.

Can planning obligations or heads of terms be on a local list? [answer: information about proposed planning obligations should not normally be made a validation requirement].

Local planning authorities are encouraged to inform and involve all parties with an interest in the land and relevant infrastructure providers, including county councils where appropriate, at an early stage to prevent delays to the process.”

Practical steps

An updated version of the Law Society’s model form of section 106 agreement, endorsed by DCLG (but openly consulted upon first please) would be helpful. The current version dates from June 2010 (predating all of the law and policy referred to in this blog post!). LPAs and developers alike could be advised more strongly that its terms should not be departed from without good reason – there is still far too much reinventing of the wheel and inconsistency of approach between LPAs and indeed between individual lawyers. The reference to a template or model terms in the passage above is encouraging. We need to move away from a bespoke tailored approach towards the “off the peg” department wherever we can…
Particular complexities arise in relation to negotiating viability review mechanisms. Again greater standardisation (which first needs greater standardisation of the approach taken by valuers to viability appraisal for section 106 purposes) would reduce a huge amount of detailed drafting and negotiation. 

There can be a bottleneck when it comes to the LPA’s internal legal and other officer resources, often despite the fact that the applicant is willing to pay for the LPA to outsource its legal work (not that outsourcing is in any way a universal panacea and on a complicated scheme a range of officer input is required). Proper discussions on the section 106 agreement still usually start far too late, with the difficult issues not grappled with until the lawyers have been instructed and start probing as to what the heads of terms actually mean…

The Local Government Ombudsman could usefully take a less hands-off approach than at present to complaints about undue delay. Its present stance (illustrated by this September 2014 ruling )  appears to be that the applicant’s remedy is simply to appeal to the Planning Inspectorate on the basis of non-determination of the application within the statutory period. 

Most usefully however, we could all re-double our efforts to ensure that we only include within section 106 agreements that which is absolutely necessary. If something can be addressed by planning condition, use a condition! 

Simon Ricketts, 20.8.16

Personal views, et cetera

Sequential Test: Still Testing

The  “town centres first” sequential test in paragraph 24 of the NPPF still leads to much uncertainty as to its practical application. This post briefly summarises (largely just by cutting and pasting the relevant passages) the recent Warners and Aldergate court rulings and the Secretary of State’s Exeter decision letter, all from the last month alone.

But first, the paragraph:

“Local planning authorities should apply a sequential test to planning applications for main town centre uses that are not in an existing centre and are not in accordance with an up-to-date Local Plan. They should require applications for main town centre uses to be located in town centres, then in edge of centre locations and only if suitable sites are not available should out of centre sites be considered. When considering edge of centre and out of centre proposals, preference should be given to accessible sites that are well connected to the town centre. Applicants and local planning authorities should demonstrate exibility on issues such as format and scale

A little, but not much more, guidance is set out in the NPPG:

“It is for the applicant to demonstrate compliance with the sequential test (and failure to undertake a sequential assessment could in itself constitute a reason for refusing permission). Wherever possible, the local planning authority should support the applicant in undertaking the sequential test, including sharing any relevant information. The application of the test should be proportionate and appropriate for the given proposal. Where appropriate, the potential suitability of alternative sites should be discussed between the developer and local planning authority at the earliest opportunity.The checklist below sets out the considerations that should be taken into account in determining whether a proposal complies with the sequential test:

  • with due regard to the requirement to demonstrate flexibility, has the suitability of more central sites to accommodate the proposal been considered? Where the proposal would be located in an edge of centre or out of centre location, preference should be given to accessible sites that are well connected to the town centre. Any associated reasoning should be set out clearly.
  • is there scope for flexibility in the format and/or scale of the proposal? It is not necessary to demonstrate that a potential town centre or edge of centre site can accommodate precisely the scale and form of development being proposed, but rather to consider what contribution more central sites are able to make individually to accommodate the proposal.
  • if there are no suitable sequentially preferable locations, the sequential test is passed.”

This replaced more detailed practice guidance  which was withdrawn on 7 March 2014.

Warners Retail (Moreton) Ltd v Cotswold District Council & Ors [2016] EWCA Civ 606 (24 June 2016)

The Court of Appeal rejected a claim for judicial review brought by the owner of a Budgens store in Moreton-in-Marsh, seeking to quash a planning permission granted for an out of town food store. The arguments were around whether the applicant had been sufficiently flexible before rejecting as sequentially preferable an extension to the Budgens. (The permission was granted when the more detailed practice guidance was in place, hence references in the passages below).

Lindblom LJ:

“Under paragraph 24 of the NPPF both applicants and local planning authorities are expected to “demonstrate flexibility on issues such as format and scale”. What bounds can reasonably be set on an applicant’s preference and intentions as to “format and scale” in any individual case will always, and necessarily, depend on the facts and circumstances of that particular case. The policy in paragraph 24 of the NPPF should not be seen as prescriptive in this respect. It plainly is not.

Flexibility was also called for under the practice guidance, in somewhat more elaborate terms. It is very clear from paragraphs 6.42 and 6.45 that the identification of a relevant “need” or “need/demand” for the purposes of the sequential approach was not intended to be merely a self-serving exercise on the part of the developer himself. As paragraph 6.45 made plain, sites were not to be rejected on the strength of the “self imposed requirements or preferences of a single operator …”. Otherwise, the sequential approach would likely become a merely self-fulfilling activity, divorced from the public interest. It is also clear, however, that the authors of the practice guidance regarded the developer’s own intentions as generally having some bearing on the application of the sequential test. One sees this, for example, in paragraph 6.37 – in the reference to “the need or demand which the proposal is intended to meet”; in paragraph 6.42 – in the concept of “what aspect(s) of the need are intended to be met by the site(s)”, the recognition that a more central site does not have to be able to “accommodate precisely the scale and form of development being proposed”, and the need to consider what contribution such a site might make to “meeting the same requirements”; in paragraph 6.45 – in the reference to the “need/demand [the applicant’s] proposal is intended to serve”; and also in paragraph 6.46 – in the reference to “the scale/form of town centre uses proposed …” (my emphasis).

The only site said to have been a sequentially preferable alternative to Minton’s is the site of the Budgens store. It is not suggested that that site could have accommodated an additional food store of the kind assumed by Minton for the purposes of the sequential test, even if the permitted extension to the Budgens store were not built. In essence, Mr Warren’s argument was that the members should have asked themselves, but did not, whether the extended Budgens store could meet the identified need, and, if the answer was that it could, should have found that Minton’s proposal for an additional food store must fail the sequential test because there was no need for it. 

In my view that argument is untenable. It does not reflect the national planning policy and guidance bearing upon the council’s decision on the Minton proposal. In effect, it seeks to restore to national planning policy for retail development a test of need that has not been there since PPS4 replaced PPS6 in December 2009. That, of course, is not possible. Minton’s proposal did not have to be justified by a demonstration of need.

One of the grounds for the challenge was that the officer had wrongly treated the Supreme Court’s ruling in the Tesco v Dundee City Council  case on suitability as directly applicable to the NPPF notwithstanding differences in the language of the guidance north and south of the border.

“I think one must be careful here. The Government’s policy for the sequential approach in paragraph 24 of the NPPF and the practice guidance are not in all respects the same as the NPPG8 and development plan policies construed by the Supreme Court in Tesco v Dundee City Council. They are similar in broad intent, but they are not in identical terms. An obvious similarity, though the language is different, lies in the concept of “flexibility”. The requirement in the final sentence of paragraph 24 of the NPPF for both applicants and local planning authorities to “demonstrate flexibility on issues such as format and scale”, as amplified by the advice in paragraphs 6.42 to 6.46 of the practice guidance, bears some similarity to the requirements for “flexibility and realism” on the part of both developers and retailers and planning authorities in paragraph 13 of NPPG8 and the requirement for planning authorities to be responsive to the needs for retailers in paragraph 14. That much is clear. But one should not simply read across the Supreme Court’s interpretation of the Scottish policies in Tesco v Dundee City Council as if it were the construction of the differently worded policy in paragraph 24 of the NPPF and the corresponding parts of the practice guidance. It is not.”

Aldergate Properties v Mansfield District Council and another [2016] EWHC 1670 (Admin) (8 July 2016)

The High Court quashed planning permission for a proposed out of town Aldi foodstore, following a challenge by the owner of a site in Mansfield town centre. The town centre had been ruled out by the applicant as a potential location, partly because there is already an Aldi store near to the centre and planning permission for another.

Ouseley J summarises parts of the planning committee report that, led to approval of the application, as follows:

“The Report continued, saying that as the application site was out of centre, a sequential assessment had to be carried out. The Report referred to the agreement that the exercise did not need to include sites covered by the catchment areas of the existing store on Nottingham Road or the recently permitted store at Leeming Lane South, to the south and north respectively of Mansfield town centre, because it was “unrealistic that Aldi would operate a store in close proximity to these existing and committed stores, and it would therefore be unreasonable to require a search for sites that would not make commercial sense for the operator”. 

The Report noted the centres and sites considered, and the reasons why they were not suitable. In order to be suitable for Aldi, sites needed to be at least 0.6 ha in size. The applicant was thought to have been fairly flexible in terms of more central sites, and in format and scale by looking for sites “which are slightly smaller than the application site”. Aldi’s reasoning for not being more flexible was based on Tesco Stores Limited v Dundee City Council, (dealt with below), set out in the Planning and Retail Statement with particular reference to paragraph 38 of the judgment, which focussed suitability on the developer’s proposals, not on some alternative scheme which might be suggested by the authority. The question, said the Report, was whether an alternative site was suitable for the development proposed, not whether the proposed development could be altered to fit an alternative site. The sequential test was thus passed and the principle of retail development acceptable. There was no separate discussion of impact.”

Ouseley J ruled that it was inappropriate to rule out the town centre as a potentially more suitable location, purely due to the identity of the proposed retailer:

“[…] In my judgment, “suitable” and “available” generally mean “suitable” and “available” for the broad type of development which is proposed in the application by approximate size, type, and range of goods. This incorporates the requirement for flexibility in [24] NPPF, and excludes, generally, the identity and personal or corporate attitudes of an individual retailer. The area and sites covered by the sequential test search should not vary from applicant to applicant according to their identity, but from application to application based on their content. Nothing in Tesco v Dundee City Council, properly understood, holds that the application of the sequential test depends on the individual corporate personality of the applicant or intended operator.

[…] NPPF [24] positively “requires” retail investment in the first place to locate in town centres rather than elsewhere. Its thrust is rather more emphatic than policies which advise developers and retailers to have regard to the circumstances of town centres, as in Tesco v Dundee [28]. It is the purpose of the planning system to control development, that is to permit, prevent, encourage, inhibit or limit and condition it, so that the individual private or commercial interest and the broader public interest meet in reconciliation however uneasily. NPPF [24] cannot therefore be interpreted as requiring “suitability” and “availability” simply to be judged from the retailer’s or developer’s perspective, with a degree of flexibility from the retailer, and responsiveness from the authority.

Third, and of critical importance here, still less can it be interpreted as envisaging that the requirement or preferences of an individual retailer’s trading style, commercial attitudes, site preferences, competitive preferences whether against itself or greater competition should dictate what sites are “suitable” or “available” subject only to a degree of flexibility. NPPF [23] and [24] are simply not couched in terms of an individual retailer’s corporate requirements or limitations. That would be the antithesis of planning for land uses and here, its default policies. It would take very clear language for such an odd result to be achieved.”

The applicant had accepted a condition that made the permission personal to Aldi. However, the judge held:

“This is not solved by the imposition at the end of the process of a condition restricting occupation to a particular retailer. That may be necessary for consistency of approach but it would reinforce the error of approach; instructively though it was opposed here by Aldi which had benefited from an approach unique to Aldi. The town centre remains where development is required; the out of centre development may inhibit or prevent a store coming forward in the town centre, and draw away town centre trade, trips, expenditure and vitality.

Fourth, there is a further reason why the identity of the applicant, as opposed to the sort of development it proposes, is not generally relevant to the sequential test. The sequential test in the NPPF is not just one of suitability; it covers availability: “only if suitable sites are not available, should out of centre sites be considered.” A town centre site may be owned by a retailer already, to use itself for retailing, who is not going to make it available to another retailer. It is plainly available for retailing, though only to one retailer. That does not mean that another retailer can thus satisfy the sequential test and so go straight to sites outside the town centre. “Available” cannot mean available to a particular retailer but must mean available for the type of retail use for which permission is sought.”

The judge had delayed handing down the judgment so as to be able to take into account the Court of Appeal’s ruling in Warners but found nothing in that to change the approach he was taking.
The Secretary of State’s decision letter dated 30 June 2016 in relation to the north of Honiton Road and west of Fitzroy Road, Exeter, site 

This was a recovered appeal in relation to a proposed district centre. The Secretary of State dismissed the appeal, partly because he agreed with his inspector that the more centrally located bus and coach station site was sequentially preferable and had been wrongly discarded.

The Secretary of State agreed that it was wrong to argue that the core strategy was “inconsistent with the NPPF, or out of date on the grounds that whether development is acceptable is now only to be determined by reference to the sequential and impact tests”. He agreed that the NPPF expects local plans to “fill the gaps” by meeting the criteria set out in paragraph 23 of the NPPF for policy making, including a network and hierarchy of centres. The core strategy defined local centres and the proposal would go beyond any reasonable of local centre for the purposes of the core strategy.

The inspector goes into an interesting analysis of the previous decision of the Secretary of State in Rushden Lakes dated 11 June 2014  distinguishing it on the basis that in that case the local plan’s settlement hierarchy policies were found to be out of date.

On the suitability of a potentially preferable site and whether sufficient flexibility had been shown, the Secretary of State says this:
“For the reasons set out at IR11.30-11.37, the Secretary of State agrees with the Inspector that given no more than reasonable flexibility, the Bus and Coach Station site would be suitable for the town centre uses proposed for the appeal site (IR11.37). The Secretary of State has taken into account the Inspector’s reasoning at IR11.38-11.40. He agrees that there is no rationale for concluding that the site must be on the open market to any developer, and that the new retail floorspace would be marketed to traders who would occupy it regardless of who developed or owned the scheme (IR11.39). He further agrees that the requirement for a bus station and a leisure outlet on another part of the Bus and Coach Station site does not mean that the area earmarked for retail development is not available (IR40). Overall he considers that the Bus and Coach Station site is available.”

The inspector:

11.32 Tesco v Dundee looked at how the policy should be interpreted including flexibility. As above, it found that the question of suitability does require judgement but also that the purpose of flexibility is not to require the application to be transformed into something significantly different. Here, the proposed retail elements could be accommodated without disaggregation but the configuration of floorspace would need to be different to take account of the relative size of adjacent properties (their scale) and the floorspace would most likely need to be concentrated nearest to the existing PSA for commercial reasons. This would be no more than showing reasonable flexibility. 

11.33 To insist on the same requirement for parking and access in a town centre, which has ample existing parking, service roads and excellent links to public transport, would be unreasonable. Drive-through restaurants do feature within the definition of a town centre and so, to be suitable, it must be possible for these to be accommodated. Nevertheless, as with general access requirements for servicing and other vehicular needs, it would be no more than showing reasonable flexibility to accept that existing streets and access arrangements could provide part of the drive element of such a proposal if not the restaurant area. Moreover, drive-through restaurants are not fixed elements of the proposals as they do not feature specifically in the description of development, would not be a requirement of the suggested conditions, and could easily be varied to another use. The scheme would also include a gym which would fall within the health and fitness centres part of the NPPF definition. However, the Council’s contribution to the PHL as a whole includes a leisure centre. It was not suggested that an operator who might occupy the gym proposed for the appeal site would not be interested in a City Centre location, and there are already other gyms in Exeter.

11.38 The NPPF and the PPG both refer to availability with regard to the sequential test but neither clarifies how this should be defined. The appellant argued that the BCS is not available since CEH and the Council have agreed on a way forward and are unlikely to allow other developers a look in. The purpose of retail policy in NPPF 23 is to promote competitive town centre environments and manage the growth of centres. The NPPF test should not be used to prevent development unless a sequentially preferable site could actually deliver the proposals. 

11.39 However, there is no sound basis for finding that the BCS site is not available to traders and no rationale for concluding that the site must be on the open market to any developer. Providing PHL goes ahead, the new retail floorspace would be marketed to traders who would occupy it regardless of who developed or owned the scheme. The need for flexibility in the Judgment in Tesco v Dundee refers to retailers as well as developers and this strengthens the conclusion that available means for the development proposed not for the landowner hoping to carry out the development. Although on the separate point of specific locational requirements, the PPG does state that land ownership does not provide a justification for excluding a site. 

11.40 In the absence of any clearer interpretation, the preference in NPPF 24 should refer to availability to traders. It follows that it doesn’t matter who develops the site so long as it can provide the proposed level of shop floorspace. As above, the requirement for a bus station and a leisure outlet on another part of the BCS site does not mean that the area earmarked for retail development is not available. On this point as well, the BCS would be sequentially preferable.

Simon Ricketts 23.7.16

Personal views, et cetera

Unpacking UseItOrLoseIt

This “use it or lose it” catchphrase has appeared again this past week in the House of Lords Economic Affairs Committee’s report, Building More Homes. Paragraphs 129 to 139 of the report’s section on Planning Reform set out the “criticism made of the large house builders…that they hold land suitable and with permission for building, yet build at a slow pace and thus maximise the profit from each development”.

The conclusion is arrived at:

“139.We recommend that local authorities are granted the power to levy council tax on developments that are not completed within a set time period. This time period should be negotiated when planning consent is sought and be varied according to the size and complexity of a development. To ensure that the local authority also has an incentive to accelerate the process, the clock should start to run only when the local authority has signed off all conditions and obligations“.

But how would this possibly work or help? Let’s go back to the start (copyright, Coldplay).

Permission deadlines

Since the Town and Planning Act 1968, permissions have had deadlines for implementation (and, in the case of outline planning permissions, for submission of reserved matters applications), so as to give some certainty after a defined period of time as to whether a development that has been approved is going to take place or not. The statutory default deadline for implementation was five years, but in England (not Wales) this was reduced to three years by the Planning and Compulsory Purchase Act 2004. If a deadline is missed, the permission lapses and development cannot proceed without a fresh planning permission being obtained (bringing with it large expenditure of time and cost and often a high degree of political risk).

Developers will not acquire a site with the benefit of planning permission if they are not comfortable that the permission will not lapse before they are in a position to carry out their development. Similarly, what funder would fund a purchase, or pre-development activity, if there is a risk that the permission will lapse?

In practice longer deadlines are routinely negotiated in the case of larger developments.

Extending the life of permission

The ability to extend the life of planning permissions by way of section 73 was removed by the Planning and Compulsory Purchase Act 2004 (from 24 August 2005).

A power to renew permissions was then introduced on 1 October 2009 (for permissions granted before that date, later extended by a year) in the wake of the financial crisis. The Planning Practice Guidance is silent on the point, simply saying that section 73 cannot be used to extend time limits, but in fact renewal is still possible for very limited categories of pre 1 October 2010 permissions (see Article 20, Town and Country Planning (Development Management Procedure) (England) Order 2015).

(Incidentally, some LPAs, including Westminster City Council, use a format for section 73 permissions that automatically repeats the standard time limit conditions, referring to a deadline that runs from the date of the permission – at best confusing if intended to refer back to the date of the original permissions, at worst ineffective if a reference to the date of the section 73 permission).

Preserving the life of permissions

Frequently, a developer perceives a risk that he will not be ready to carry out development by the planning permission deadline, which may be for all manner of reasons. The accusation raised is often of “landbanking” (to which Barratt’s Philip Barnes has provided a riposte in an interesting March 2016 blog post.

The works required under section 56(4) of the Town and Country Planning Act 1990 to implement a planning permission need not be very significant at all:

“(a) any work of construction in the course of the erection of a building;

(aa)any work of demolition of a building;

(b)the digging of a trench which is to contain the foundations, or part of the foundations, of a building;

(c)the laying of any underground main or pipe to the foundations, or part of the foundations, of a building or to any such trench as is mentioned in paragraph (b);

(d)any operation in the course of laying out or constructing a road or part of a road;

(e)any change in the use of any land which constitutes material development

The courts have long held (reversing a previous judge-made concept) that “colourable” intent is irrelevant. You can be open with the world that you are simply digging the trench to carry out a “material operation” for the proposes of section 56.

The greater problem often arises from a separate judge-made concept: with limited exceptions, you need first to have complied with all relevant pre-commencement planning conditions. I commented in my blog post Let’s Talk About Conditions on the Government’s proposal to discourage further LPAs from imposing unnecessary pre-commencement conditions.

Complications and misunderstandings also often arise in that where section 106 obligations are expressed to be conditional on commencement of development, preliminary works such as site clearance, remediation and demolition are commonly excluded from the definition of commencement of development – rightly because otherwise contributions would be paid unnecessarily early – before the effects arise from the development that are to be mitigated by way of the contributions. So it can be possible to keep a permission alive by carrying out limited works of implementation that do not amount to commencing the development for the purposes of the section 106 agreement (no such flexibility of course with CIL).

There is also unnecessary uncertainty arising from the fact that the LPA cannot certify (in a way that is legally binding) that the works carried out were sufficient to keep the permission alive until the deadline for implementation has passed, by which time it is too late if the works were in fact insufficient. This arises because the only useful certificate would be a CLOPUD under section 192, certifying that the balance of the development authorised by the permission can be lawfully carried out without the need for further permission and until the implementation deadline has passed this would necessarily be the case in any event regardless of the purported works of implementation.

It’s not just about the start

One disconnect at the moment is that of course it is not the first trench being dug that is important – it’s the creation of homes and jobs. It is very rare indeed to see any planning conditions or section 106 obligations that require development to have reached defined milestones within particular time periods or to be completed with any particular timescale. That would be anathema to any funder. What if there is a collapse in demand or development suddenly becomes unviable? In the downturn we saw many projects mothballed after a start on site.

The most that we see is occasionally the inclusion of review mechanisms that kick in if development hasn’t been carried out by a particular deadline (a three year completion deadline, following which the approved affordable housing abatement would fall away, was indeed included in the late lamented section 106BC).

The only statutory remedy for LPAs is that, at least in theory, they can serve a completion notice under section 94 of the Town and Country Planning Act 1990. However, the completion notice procedure is almost never used (has anyone had any recent experience of it?). It is long (at least 12 months’ notice needs to be given), cumbersome (confirmation by the Secretary of State) and only erases planning permission for those parts of the development that have not yet been carried out, which doesn’t really help anybody. An unwieldy stick.

Use it or lose it

So what if we make it even harder for developers to extend or preserve the life of permissions, or penalise developers who don’t proceed?

1. Developers will think hard before making an application for permission that exposes themselves to the risk of penalties or that will be so transient that it will have little value – there will be fewer applications in the first place. Some people may say “good – cut out the time wasters”. However, it is in the nature of the commercial development process that many schemes will only become “real” once the application is made and funders/end-users are secured. So you would be seeing off at the start a number of schemes that would otherwise proceed in due course to deliver homes and jobs.

2. We will need to work out who we are actually looking to penalise/encourage – which means understanding the various permutations of arrangements between land owners, developers (whether under a development agreement, promotion agreement, agreement for sale conditional on planning or under an option) and funders.

3. We will need to work out how any penalty is actually to be triggered and quantified. Looking at the Lords Committee’s recommendation:

– how to negotiate the length that development will take? On a large mixed use development it could well be a decade or more.

– what is “completed”?

– what is to stop the developer going slow in achieving reserved matters approvals and discharge of conditions if the clock doesn’t start ticking till then?

– how is the level of notional council tax to be calculated, prior to reserved matters approval and years before the mechanism is actually triggered? Why council tax? Is this only of concern for housing development?

– what if a development is altered or abandoned?

Some tentative suggestions

1. Consider ensuring, by way of policy guidance, that in relation to any phased planning permission there be a separate implementation deadline for each phase. Implementation deadlines should be realistic – three years is tight for all but the simplest of schemes (the standard “permission in principle” three years and five years deadlines in section 150 of the Housing and Planning Act 2016 are likely to be unrealistic in many instances).

2. Consider enabling LPAs to certify, when implementation works are carried out, that they are legally sufficient to preserve the life of the permission

3. Encourage, by way of policy guidance, that LPAs secure in section 106 agreements a review of the section 106 obligations after a reasonable period, if the development hasn’t been completed, so as to ensure that they remain consistent with current circumstances (with disputes referred to an independent expert), or only allow derogations from full policy requirements where specified numbers of dwellings are ready for occupation by an agreed deadline (fair enough when the case made for permission in the first place will often have been the urgent unmet need for housing in the area). Potentially could the CIL regime also be adapted to provide time-related carrots and sticks?

4. Review the completion notice procedure to see whether it can be made fit for purpose.

5. Do all we can to make the planning application process in the first place as straight-forward as possible, so that we don’t have to spend quite so much time finding ways around the horror of having to embark on a fresh planning application.

6. Provide a policy and economic climate where permissions are granted for development that is likely to be, and remain viable, and where therefore there should be no need for prevarication on the part of a developer.
No EU law was used in the writing of this blog post.
Simon Ricketts 16.7.16
Personal views, et cetera

7 Questions About Permission In Principle

Despite its 217 sections and 20 schedules, the Housing and Planning Act 2016 is in places the merest of sketches – nowhere more so than the illusive idea of “permission in principle” in sections 150 and 151. Here are just some of the things we don’t know:

1. What does “housing-led development” mean?

2. What types of land will be able to be included in the new register envisaged, promised by the Act’s explanatory notes to be a register of brownfield land suitable for housing, but without any such constraint in the Act itself?

3. What procedures will govern the process for selecting land for the register, allowing both proponents and opponents a fair hearing? The Act simply refers to “consultation and other procedures”. In which ways will the procedure be any speedier than any development plan process whilst complying with the European Convention on Human Rights and SEA Directive?

4. Categories of land on the register, or designated in other plans, will have automatic permission in principle for development by way of a general development order but what will be the categories and in relation to what categories of land will specific applications for permission in principle be needed? The explanatory notes suggesting that applications will be limited to minor development (ie fewer than ten dwellings) but presumably the general development order will allow for much larger development to have automatic permission in principle (with EIA, where necessary, being carried out at some undetermined stage in the process?)?

5. How detailed will be the development parameters set out in the permission in principle, given that LPAs will only be to take into account limited criteria in determining subsequent applications for technical details consent? The explanatory notes suggest that “the parameters that can be granted permission in principle are limited to location, the uses (which must be housing-led) and the amount of development”. Will that be enough to give developers something bankable in terms of predictable value/cost? The explanatory notes suggest that permission in principle cannot be subject to conditions, so how will the parameters be documented in a way which sufficiently precise?

6. In practice, will LPAs require land owners and developers to make all the running as at present, justifying that development would be acceptable with necessary supporting information and technical work, or will land owners be able to sit back, let the LPA take the local flak and wait for permission in principle to pop out of the sausage machine in place of getting a developer on board to secure planning permission? Will land owners accordingly retain more land value gain?

7. Are matters that go directly to value and viability, such as social and physical infrastructure requirements and affordable housing numbers and tenure, to be determined at permission in principle stage or technical details approval stage? The explanatory notes simply suggest that “the Secretary of State may also specify in the regulations, certain types of information for inclusion into the register alongside the entries …. For example, the site reference, address, size, an estimate of the maximum number of dwellings that the site would be likely to support, and its planning status.”

More generally, is there an Act with such blatant Henry VIII clauses, ie Parliament passing an Act with its fingers crossed behind its back so that it can amend the provisions in the statute without primary legislation? Section 2(10) takes the biscuit (“Regulations under this section may amend this chapter”), giving future Governments carte blanche to mutate the Act’s starter homes provisions in whichever way they choose. (Read “Why Henry VIII clauses should be consigned to the dustbin of history” by Richard Gordon).

Simon Ricketts 11.6.16

Personal views et cetera

We Need To Talk About Conditions

Can we scratch beneath the surface in relation to this issue about pre-commencement planning conditions?
We’re told that the Neighbourhood Planning & Infrastructure Bill will contain provisions:
“To ensure that pre-commencement planning conditions are only imposed by local planning authorities where they are absolutely necessary.

Excessive pre-commencement planning conditions can slow down or stop the construction of homes after they have been given planning permission.

The new legislation would tackle the overuse, and in some cases, misuse of certain planning conditions, and thereby ensure that development, including new housing, can get underway without unnecessary delay.”



Odd given that the Planning Practice Guidance already advises:
“Care should be taken when considering using conditions that prevent any development authorised by the planning permission from beginning until the condition has been complied with. This includes conditions stating that ‘no development shall take place until…’ or ‘prior to any works starting on site…’.

Such conditions should only be used where the local planning authority is satisfied that the requirements of the condition (including the timing of compliance) are so fundamental to the development permitted that it would have been otherwise necessary to refuse the whole permission. A condition precedent that does not meet the legal and policy tests may be found to be unlawful by the courts and therefore cannot be enforced by the local planning authority if it is breached.”



What punishment is now planned for an LPA (and, indirectly, the applicant) where an unnecessary pre-commencement condition is imposed? If it includes the remedy of judicial review, putting the permission itself at risk, that is exactly the sort of trip hazard that nobody needs and an early candidate perhaps for the next red tape challenge. 
Setting to one side for a moment whatever the specific issue may be in relation to pre-commencement conditions, there is a lot of noise about the increasing number of conditions attached to planning permissions for all but the most straight-forward of development projects. Richard Harwood QC has written an interesting piece on the issue.

In my view there are various “real world” causes:
– LPAs’ internal computerised lists of template conditions make it easy for them to err on the safe side.
– experience tells us that if matters are left unregulated they will not necessarily be addressed. 
– the much wider scope of issues that are material planning conditions and that therefore are drawn into the LPA process (with wish lists of recommended conditions often chipped into by internal and external consultees). 
– (particularly in relation to EIA development) the need to define what has been permitted and the way in which mitigation, assumed in the assessment, will actually, come forward. 
– a pragmatic deal between applicant and LPA to “park” particular outstanding issues, which might otherwise have been grounds for refusal if not satisfactorily resolved, to be addressed later in the development process. 
– the sheer scale and complexity of many modern development projects. 
Turning specifically to pre-commencement conditions, in my view there are, again, a number of issues:
– all of the above
– LPAs that seek for issues to be resolved earlier than is necessary or practical in the development process. 
– often a failure to consider how a project will be phased and whether a matter should be addressed prior to commencement of each phase rather than upfront in relation to the whole of what may be a longterm development that is to be built out by a variety of parties. 
As well as potentially causing delay to any start on site, unnecessary front loading of costs and premature closing-off of technical and design solutions, the other real pain caused by pre-commencement conditions is that they need to be addressed prior to any early material operation so as to keep the planning permission alive (and risk any actual work being held by the courts not to amount to a valid material operation). Of course, we all get the motivations behind “use it or lose it” but equally:
– permission implementation deadlines are increasingly tight as against what needs to be done ahead of the diggers and cranes. 
– a planning permission is not to be lost lightly, given the huge capital investment it will often represent and the political and legal uncertainties that have been successfully navigated to reach that point. Indeed, if it could be lost lightly, that capital would be unlikely to be invested in the first place. 
All of these motivations, all in my view reasonable, lie behind the continuing drive to reduce pre-commencement conditions to a minimum. 
However, let’s not throw the baby out with the bath water. Can we dare to hope for provisions in the forthcoming Bill that do not give rise to the risk of judicial review and that do not reduce the scope for an LPA to negotiate pragmatic solutions rather than be driven either to refuse permission or achieve its objectives by the backdoor (ie by section 106 agreement)? 
Simon Ricketts 6.6.16
Personal views et cetera