Category: Housing

Does LURB Herald A More Zonal Approach to Planning After All?

I’ll explain what I mean in a moment.

But first some preliminaries.

LURB of course seems to be the now accepted acronym for the Levelling-up and Regeneration Bill, laid before Parliament on 11 May 2022.

The Bill proposes a wide range of legislative measures across local government, regeneration, planning and compulsory purchase.

Aside from the Bill itself it’s worth having to hand:

⁃ the Explanatory Notes

⁃ the Government’s policy paper

⁃ the Government’s response to the Select Committee report on the planning white paper

My Town Legal colleagues have put together a fantastic (I think) 17 page summary of the main planning and compulsory purchase provisions of the Bill. Thanks Safiyah Islam and the following contributors:

• Part 3, Chapter 1 – Planning Data – Aline Hyde

• Part 3, Chapter 2 – Development Plans – Emma McDonald

• Part 3, Chapter 3 – Heritage – Cobi Bonani

• Part 3, Chapter 4 – Grant and Implementation of Planning Permission – Lucy Morton

• Part 3, Chapter 5 – Enforcement of Planning Controls – Stephanie Bruce-Smith

• Part 3, Chapter 6 – Other Provision – Stephanie Bruce-Smith

• Part 4 – Infrastructure Levy – Clare Fielding

• Part 5 – Environmental Outcomes Reports – Safiyah Islam

• Part 6 – Development Corporations – Amy Carter

• Part 7 – Compulsory Purchase – Raj Gupta

* Relevant clauses in Part 2 (Local Democracy and Devolution), Part 8 (Letting by Local Authorities of Vacant High-Street Premises), Part 9 (Information About Interests and Dealings in Land) and Part 10 (Miscellaneous) – Victoria McKeegan

If you would like to receive further detailed updates from time to time please email town.centre@townlegal.com.

I held a Clubhouse session on 12 May 2022 where I discussed the changes and their possible implications alongside Catriona Riddell, Phil Briscoe, Nick Walkley and Meeta Kaur. It is available to listen to here.

For a deeper dive into the compulsory purchase elements, do join our next Clubhouse session at 6 pm on Tuesday 17 May 2022, where my colleagues Raj Gupta and Paul Arnett will be leading a discussion with special guests Charles Clarke (DLUHC, previous chair of the Compulsory Purchase Association), Henry Church (CBRE, and current chair of the Compulsory Purchase Association), Caroline Daly (Francis Taylor Building), Virginia Blackman (Avison Young) and Liz Neate (Deloitte). Some line up! Join here.

Raj and Paul have also started a blog, Compulsory Reading, focused on CPO issues. The first post is here and, guess what, this will be compulsory reading if your work touches at all on the intricate and changing world of compulsory purchase law.

Phew! So what was I getting at in the heading to this post? Surely any fule kno that there was once a government white paper in August 2020 that, amongst other things, proposed a more zonal approach to planning – with local plans throwing all areas into three hoppers: protected, restricted and growth – but that the political lesson learned was that this would be a vote loser and so the zonal approach was abandoned by incoming Secretary of State Michael Gove in the wake of the Chesham and Amersham by-election?

The idea of growth areas (where allocation would amount to automatic development consent) has certainly been abandoned, but the consequence of a number of the proposals in the Bill in my view leads us more towards a system where there is much less decision making flexibility in relation to individual planning applications and appeals. Instead, planning decisions will need to be made in accordance with the development plan and national development management policies “unless material considerations strongly indicate otherwise”.

So developers will need to make sure that:

⁃ development plans (local plans, neighbourhood plans) etc allocate the necessary land.

– the associated mandatory local design codes are workable

⁃ they can work within the constraints of whatever national development management policies the Government arrives at.

If development accords with these requirements, planning permission should be a doddle. If not, you plainly need to overcome a heavy presumption against. Our current flexible system (sometimes good, sometimes bad) will take a big lurch towards being rule-based or, dare I say it, zonal.

This may be a Good Thing or it may be a Bad Thing. Much depends on whether development plans, local design codes and national development management policies are properly tested for their realism. There will be even more focus on testing the soundness of local plans.

However, when it comes to local plan making, there are some major unresolved uncertainties:

⁃ First, what housing numbers do local authorities need to plan for? The Government still aspires to a 30 month local plan preparation to adoption timescale but that is only going to work if you have a largely “plug in and play” approach to the numbers, as was envisaged in the White Paper. What will happen to the standard methodology? We don’t get know. The Government’s policy paper says this:

“The changes in the Levelling Up and Regeneration Bill will require a new National Planning Policy Framework for England. The Government continues to listen to the representations of MPs, councillors and others on the effectiveness not only of the formula but the surrounding policies. Alongside Committee stage of the Bill, it intends to publish an NPPF prospectus setting out further thinking on the direction of such policies.”

What numbers are we planning for as a country? Are we still targeting 300,000 homes a year? The Government’s response to the Select Committee report on the planning white paper says this:

“The Government is determined to create a market that builds the homes this country needs. Our ambition is to deliver 300,000 homes per year on average and create a market that will sustain delivery at this level. There is compelling evidence that increasing the responsiveness of housing supply will help to achieve better outcomes. There seems to be consensus that 250,000 to 300,000 homes per annum should be supplied to deliver price and demand stability. For example, a 2014 joint KPMG and Shelter report highlighted that 250,000 homes per annum were needed to address price and demand pressures.”

⁃ Secondly, what will replace the duty to co-operate, which will be abolished? What will the new duty to assist really amount to? Can authorities adjoining urban areas with high unmet housing needs simply turn away from meeting those needs?

⁃ Thirdly, what if the allocations in the plan prove to be undeliverable or do not come forward? The safety net/potential stick of the five year housing land supply requirement (and presumably the tilted balance) in the case of up to date plans is to be abolished according to the policy paper:

“To incentivise plan production further and ensure that newly produced plans are not undermined, our intention is to remove the requirement for authorities to maintain a rolling five-year supply of deliverable land for housing, where their plan is up to date, i.e., adopted within the past five years. This will curb perceived ‘speculative development’ and ‘planning by appeal’, so long as plans are kept up to date. We will consult on changes to be made to the National Planning Policy Framework.”

Much is to be resolved here before we can begin to work out whether the proposals in the Bill will be an improvement on the present position.

Of course, the Government recognises that more work is needed. The following forthcoming consultation processes are identified:

“Technical consultations on the detail of the Infrastructure Levy and changes to compulsory purchase compensation.

• A consultation on the new system of Environmental Outcomes Reports which will ensure we take a user-centred approach to the development of the core elements of the new system, such as the framing of environmental outcomes as well as the detailed operation of the new system.

• A technical consultation on the quality standards that Nationally Significant Infrastructure Projects will be required to meet to be considered for fast-track consenting and associated regulatory and guidance changes to improve the performance of the NSIP regime.

• Proposals for changes to planning fees.

• Our vision for the new National Planning Policy Framework (NPPF), detailing what a new Framework could look like, and indicating, in broad terms, the types of National Development Management Policy that could accompany it. We will also use this document to set out our position on planning for housing, and seek views on this, as well as consulting on delivering the planning commitments set out in the British Energy Security Strategy.”

I hope this serves as some sort of introduction to the Bill and a taster as to some of the issues which will be occupying so many of us as the Bill passes through its Parliamentary stages. I don’t expect it to be on the statute book before early 2023, with a fair wind, and most of its provisions will not be in force until 2024 at the earliest. Final health warning: Bills change – we can expect plenty of amendments, omissions and additions over coming months.

Aside from my earlier plugs for our newsletters and the Planning Law Unplanned clubhouse sessions, I would also recommend two other blog posts: those of Nicola Gooch and Zack Simons . None of us has come up with a satisfactory LURB pun yet but I’m sure we all have our teams working on it.

Simon Ricketts, 14 May 2022

Personal views, et cetera

Beauty, Infrastructure, Democracy, Environment, Neighbourhoods

Oligarchs Out

In the 21st century, London has increasingly been a safety deposit box for the wealthy of the world – so many people with incomprehensible amounts of wealth, including (but not exclusively) the so-called Russian “oligarchs” (“one of a small group of powerful people who control a country or an industry”).

Just look at some of the properties we’re talking about: The London mansions owned by Russian oligarchs from ‘Billionaire’s Row’ pad to estate almost size of Buckingham Palace (MyLondon, 4 March 2022). See also this BBC piece this morning (5 March 2022): The mega-rich men facing global sanctions.

Obviously, if you come by your wealth legitimately so be it, but the sums these people apparently own would suggest at best that something is wrong with the very structure of capitalism, and at worst…well draw your own conclusions. And to what extent is this all assisting the evils of the Putin regime – and its equivalents briefly eclipsed in the news cycle?

The UK financial sanctions list (4 March 2022) currently identifies 196 Russian individuals, with the reason for each person being on the list.

For a good introduction to the complex and evolving world of sanctions, I found DAC Beachcroft’s 4 March 2022 briefing UK Sanctions – The Evolving Response to the Russian Invasion of Ukraine and what it means for UK businesses particularly useful:

“Prior to 10 February 2022, the Regulations allowed the UK Government to ‘designate’ (that is, to impose sanctions on) a person who is or has been involved in ‘destabilising Ukraine or undermining or threatening the territorial integrity, sovereignty or independence of Ukraine’. Individuals and entities that are so ‘designated’ are listed on the UK Consolidated Sanctions List (“the UK Sanctions List”) along with confirmation of the reasons for designation.”

“Asset freeze” sanctions “seek to impose prohibitions or requirements for the purposes of:

1. freezing the funds or economic resources owned, held or controlled by certain individuals and entities;

2. preventing financial services being provided to or for the benefit of certain individuals or entities;

3. preventing funds or economic resources from being made available to or for the benefit of certain entities or individuals; or

4. preventing funds or economic resources from being received from certain individuals or entities.”

“On 10 February 2022, the UK Government expanded its power to designate entities and individuals from a wide variety of sectors as it gave itself the power to designate persons ‘involved in obtaining a benefit from or supporting the Government of Russia’, including:

1. Carrying on business as a Government of Russia affiliated entity

This will include any entity which is owned directly or indirectly by the Russian Government or in which the Government of Russia holds directly or indirectly a minority interest or which has received some form of financial or other material benefit from the Government of Russia.

2. Carrying on business of economic significance or in a sector of strategic significance to the Government of Russia

This includes the Russian, chemicals, construction, defence, electronics, energy, extractives, financial services, information and communications and transport sectors.

3. Owning or controlling directly or indirectly or working as a director or trustee of a Government of Russia affiliated entity or an entity falling within any of the other above categories.”

As described in Commons Library briefing Countering Russian influence in the UK (25 February 2022), the so-called “golden visa” scheme has now been scrapped:

“On 17 February, the Government announced the immediate closure of the Tier 1 (Investor) visa to new applicants. The visa offered up to five years’ permission to stay in the UK and a route to permanent residence, in return for a minimum £2m investment. A review of all investor visas granted between 2008 and April 2015 was announced in 2018. The Government has said results will be published “in due course”.

Russians are the second most common nationality granted investor visas since 2008, although they accounted for a much smaller proportion of applicants since 2015. Just over 2,500 investor visas have been issued to Russians since 2008 (roughly one fifth of all such visas issued). People granted investment visas before 2015 may have now completed the residence requirement for permanent residence (and possibly British citizenship).”

Events have of course prompted the Government belatedly to fast-track the Economic Crime (Transparency and Enforcement) Bill. Its 2nd Reading will be on 7 March 2022. As set out in its explanatory notes, the Bill’s main objectives are to:

“Prevent and combat the use of land in the UK for money laundering purposes by increasing the transparency of beneficial ownership information relating to overseas entities that own land in the UK. The Bill therefore creates a register of the beneficial owners of such entities. The register will be held by Companies House and made public.

Reform the UK’s Unexplained Wealth Order (UWO) regime to enable law enforcement to investigate the origin of property and recover the proceeds of crime. The measures in the Bill aim to strengthen the UK’s fight against serious economic crime; to clarify the scope of UWO powers; and to increase and reinforce operational confidence in relation to UWO powers.

Amend financial sanctions legislation, including the monetary penalty legal test and information sharing powers to help deter and prevent breaches of financial sanctions.”

However, is this going far enough? There have been pieces in the media reporting that the French government had “seized” a Russian oligarch’s yacht. There is no detail as to what the precise legal status of that action was – there would need of course to be a solid legal basis for confiscation (presumably without compensation) but it is interesting that Boris Johnson and Michael Gove have been reported to be looking at the potential to bolster the Economic Crime Bill so as to facilitate the confiscation of UK property owned by Russian oligarchs (see for instance Michael Gove calling for UK to seize London homes of Russian oligarchs CityAM 27 February 2022 and Michael Gove considers options for seizing oligarchs’ property The Times 3 March 2022). Is this just tough talk and no action? I know you may not want to hear this but… any legislation, and individual decisions made under it, would need to be tightly framed to be consistent with the European Convention on Human Rights (and in a rule of law based, democratic, society that is surely right):

“Everyone has the right to respect for his private and family life, his home and his correspondence.

There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others.” (Article 8).

“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.” (Article 1 of the First Protocol)

Of course, confiscation without compensation may be properly framed as necessary in the public interest but this will need care.

The London Mayor issued a press statement on 26 February 2022, Mayor demands seizure of property connected to oligarchs, supporting the confiscation of assets but going further in terms of measures to seek to minimise the number of empty homes in the capital (surely these measures are essential to ensure that we can look in the eye those who say that there is no need for additional new homes?) and to penalise foreign buyers more generally (jury out as far as I’m concerned – baby, bathwater etc):

“The Mayor has previously criticised the Government’s failure to deliver on the promise of a register of overseas property ownership and has now set out further measures to charge those who buy property in the UK with no intention of living here and leave them empty while London faces a housing crisis.

As well as the register of overseas ownership, the Mayor is calling for:

• Seizure of property assets held by allies of President Putin

• Raising the amount overseas owners have to pay for leaving their home empty by increasing the council tax ‘empty homes premium’

• Raising capital gains tax on overseas buyers from 28 per cent to 40 per cent

• Increasing the taxes paid by overseas companies investing in property by increasing the Annual Tax on Enveloped Dwellings”

For further reading, there is this article in yesterday’s edition of the Economist: The rise and fall of Londongrad (behind pay wall, 5 March 2022).

Finally, there are some ways to support the people of Ukraine.

This week’s Clubhouse event will be at a slightly earlier time, at 5pm on Tuesday 8 March. Its theme is “BREAK THE BIAS – women in planning/law”, to mark this year’s International Women’s Day theme. We have various speakers including Meeta Kaur, Nikita Sellers, Caroline Daly, Nicola Gooch and Zenab Hearn. Link here.

Simon Ricketts, 5 March 2022

Personal views, et cetera

Liberty Leading The People (Delacroix)

Developers As Proscribed Organisations: The Government’s Amendments to the Building Safety Bill

The Government is seeking a general legislative power to shut down particular developers’ activities, with no rights of appeal, no rights to compensation and no published set of the criteria which it would apply.

Zack Simons’ concerns set out in his 17 February 2022 #Planoraks blog post are well justified.

My 21 January 2022 blog post “Planning Powers” A Pawn In Unsafe Cladding Negotiation explained the Government’s efforts to “persuade” developers to contribute a further £4bn towards remediating unsafe cladding, on top of the residential property developer tax which applies from 1 April 2022 – with the Secretary of State authorised by the Treasury to “use a high-level “threat” of tax or legal solutions in discussions with developers as a means of obtaining voluntary contributions from them” with one of the threats used being “restricting access to…the use of planning powers”.

This threat is now included within Government amendments which have been tabled to the Building Safety Bill ahead of its Committee stage in House of Lords, which starts on 21 February 2021. The amendments were accompanied by a Government press statement on 14 February 2022, Government to protect leaseholders with new laws to make industry pay for building safety.

“Tough new measures that will force industry to pay to remove cladding and protect leaseholders from exorbitant costs have been unveiled by Secretary of State for Levelling Up Michael Gove today (14 February 2022).

For those in industry not doing the right thing, the government will be able to block planning permission and building control sign-off on developments, effectively preventing them from building and selling new homes.”

“Reflecting the scale of the problem, the government will also be able to apply its new building safety levy to more developments, with scope for higher rates for those who do not participate in finding a workable solution.

The government hopes to not have to use these powers; it wants responsible developers and manufacturers to operate freely and with confidence, to help deliver the homes people need. If they do not act responsibly, they must face commercial and financial consequences.”

See also this 14 February 2022 Inside Housing piece House builders face ‘shutdown’ if they do not pay cladding costs under new government plan.

Obviously culpable developers need to pay up. But what is proposed is startling to say the least:

So the Secretary of State is seeking the power to prohibit in regulations “persons of a prescribed description from carrying out development” or specified types of development (whether or not they have the benefit of planning permission) as well as the power to “by regulations impose a building control prohibition, as regards buildings or proposed buildings, in relation to persons of a prescribed description” which would prevent them from being able to apply for or be granted building control approval. The Secretary of State would also be able to prescribe “certificates” (not sure what that description is meant to capture) which would not be able to be granted under the Town and Country Planning Act 1990 (and which if granted would be of no effect).

These prohibitions “may be imposed for any purpose connected with—

(a) securing the safety of people in or about buildings in relation to risks arising from buildings, or

(b) improving the standard of buildings.”

The provisions are drafted far too widely. What (unprecedented?) power it would give this Government (and any future Government). Of course, where prohibitions are plainly unjustified (for instance against developers who have done wrong other than not to accede to these demands for a “voluntary” payment or perhaps even if they have made a payment) the regulations could be challenged by way of judicial review (NB we need to keep an eye on ongoing judicial reform!). However, if the legislation were to give the wide discretion currently planned, this would not be easy – any grounds of challenge might need to rely on the limited protections provided by the Human Rights Act (NB we need to keep an eye on… yes, you’re there before me).

I’m concerned that these amendments have been introduced at this late stage in the passage of the Bill, with little advance notice so as to enable proper Parliamentary and more general public scrutiny.

Developers need to meet their liabilities. But this whole exercise seems to be much more of a blunderbuss – aimed at the easiest, biggest, targets and ignoring the significant role that poor regulation (and indeed de-regulation) has played in this whole scandal. Do we really want this legislation on the statute book which could well be misused in the future? Or is it all just a bluff to secure that £4bn?

If anyone would like to participate in a future Planning Law Unplanned clubhouse discussion on the topic, please let me know. 8 March 2022 is a possibility.

In the meantime:

⁃ Spencer Tewis-Allen is leading a discussion on build to rent at 6 pm on 22 February – link to clubhouse app and event here.

⁃ Hashi Mohamed is our special guest at 6 pm on 1 March, discussing his Radio 4 programme Planning, Housing and Politics – link to clubhouse app and event here.

Simon Ricketts, 18 February 2022

Personal views, et cetera

AA PA CAB

There was a customarily short and clear judgment from Holgate J this week as to how decision makers should approach applications for prior approval for the upward extension of buildings under the General Permitted Development Order: CAB Housing Limited v Secretary of State (3 February 2022)

So I’m saying nothing, you will be pleased to hear, about the 2 February 2022 Levelling Up white paper There are plenty of summaries available – and you do need a summary! Or listen to the Planning Law Unplanned clubhouse event we held, featuring Catriona Riddell (linkedin piece here), Iain Thomson (linkedin piece here) and Victoria Hutton (linkedin piece here).

Nor anything about mythical Bob, the Government’s 31 January 2022 Benefits of Brexit paper, which seemed to have little new to say in terms of the subject matter of this blog.

Nor anything about the energy price cap – although that does give additional topicality to our our next Planning Law Unplanned clubhouse event plugged at the end of this post.

Nor anything about the continuing NIMBY vs YIMBY noise that I got drawn into on twitter this week – although there is at least some link between Holgate J’s judgment & all that: someone came out with the usual trope that a planning system with a large discretionary element to decision making is “good for the lawyers”. I didn’t respond, but thought to myself that a less discretionary system, whether based on zoning or permitted development rights, is of course even better for the lawyers – because it all becomes about where the legal boundary lines are.

When Parliament amended the General Permitted Development Order to allow upwards extensions, subject to defined criteria and limitations together with the need to seek prior approval for certain aspects of the proposals, the description of the matters in relation to which prior approval is required was far too vague. What do matters such as “impact on amenity” and “external appearance” actually mean? Do you take as a given the right to extend up to two storeys upwards and in that context consider external appearance, akin to considering reserved matters with the equivalent of outline planning permission already having been granted for the two storeys, or can issues of principle as to the acceptability of that upwards extension be considered, as long as they relate to amenity or external appearance,? Obviously this is a particularly critical question where the local planning authority may be resistant in principle to upwards extensions – these new rights trumpeted by the Government become rather less meaningful.

The Cab Housing case related to three appeal decisions where the relevant inspector had dismissed appeals in relation to proposals under Class AA of Part 1 of the GPDO (upwards extensions to detatched houses).

Over to Holgate J to explain:

“These challenges raise important issues regarding the true interpretation of Class AA of Part 1. First, are the claimants correct in saying that a planning authority’s control of impact on amenity limited to effects on properties contiguous with, or abutting, the subject property and are those effects limited to overlooking, privacy and loss of light? Alternatively, does that control embrace impact upon all aspects of the amenity of neighbouring premises, as the Secretary of State contends? Second, is the authority’s control of the external appearance of the subject dwelling limited to the “design and architectural features” of its principal elevation and any side elevation fronting a highway, and is it further limited to the effects of those matters upon the subject dwelling itself? The claimants contend for that interpretation and they say that the authority is not allowed to consider the effects of external appearance upon any property outside the subject dwelling. Alternatively, is the correct interpretation, as the Secretary of State contends, that the control covers (1) all aspects of the external appearance of the proposed development, and not simply the two elevations specifically referred to in AA.2(3)(a)(ii)) and (2) impact upon other premises, and not simply the subject dwelling itself?

In the decisions challenged in these proceedings, the Inspectors took the broader approach in relation to external appearance and, in two cases, to amenity. It is common ground that if the claimants’ construction of the GPDO 2015 is correct, then each of the decisions must be quashed as ultra vires. The decisions would have been taken outside the ambit of the powers exercisable by the Inspector. But, if the defendant’s interpretation is correct, then it is also common ground that each of the three Inspectors reached decisions which fell within their powers, their decisions are not otherwise open to legal challenge and the applications for statutory review must be dismissed.

The claimants point out that other Inspectors have taken a different view upon the scope of the controls exercisable in the determination of an application for prior approval under Class AA of Part 1. It has been said that the decision-maker is not allowed to assess the impact of the external appearance of a proposed addition of 1 or 2 storeys on any area outside the subject building, for example, the streetscape. It has also been said that the principle of an upwards extension of up to 2 storeys is “established” by the permitted development right itself, so that the decision on the application for prior approval should not frustrate, or resile from, that principle. Such statements have even been made in relation to other permitted development rights where the GPDO 2015 requires “external appearance” to be controlled, without going on to refer to specific elevations (see e.g. the decision letter dated 6 July 2021 on Kings Gate, 111, The Drive, Hove). If the Secretary of State’s interpretation of the GPDO 2015 is correct, then all these decisions were potentially liable to be quashed on an application under s.288 brought within time. Plainly there are differences of interpretation which need to be resolved. There is also the question: to what extent is it correct to say that the principle of development is established where a permitted development right is subject to prior approval?

The issues in this case also affect the proper construction and ambit of permitted development rights granted by GPDO 2015 under Classes ZA, A, AA, AB, AC and AD of Part 20. These provide for up to two storeys of multiple units of residential units to be erected on top of an existing purpose-built block of flats, or on top of detached or terraced buildings in commercial or mixed use or residential use.

The claimants’ narrower approach to the legal scope of prior approval in these Classes also has implications for non-residential permitted development rights. For example, the right to erect or extend an agricultural building under Class A of Part 6 of Schedule 2 to the GDPO 2015 is potentially subject to control by prior approval in respect of the “external appearance” of the building proposed. If, as some decision-makers have said, that control is limited to assessing the effects of that appearance on the building itself, then it would follow, for example, that the effects of that external appearance on the setting of a listed building nearby could not be controlled. Can this really be right?”

His conclusion was that this was not right:

“(i) Where an application is made for prior approval under Class AA of Part 1 of Schedule 2 to the GPDO 2015, the scale of the development proposed can be controlled within the ambit of paragraph AA.2(3)(a);


(ii) In paragraph AA.2(3)(a)(i) of Part 1, “impact on amenity” is not limited to overlooking, privacy or loss of light. It means what it says;


(iii) The phrase “adjoining premises” in that paragraph includes neighbouring premises and is not limited to premises contiguous with the subject property;


(iv) In paragraph AA.2(3)(a)(ii) of Part 1, the “external appearance” of the dwelling house is not limited to its principal elevation and any side elevation fronting a highway, or to the design and architectural features of those elevations;


(v) Instead, the prior approval controls for Class AA of Part 1 include the “external appearance” of the dwelling house;


(vi) The control of the external appearance of the dwelling house is not limited to impact on the subject property itself, but also includes impact on neighbouring premises and the locality.”

The judge seeks to downplay the significance of these conclusions:

“The decision of each Inspector was entirely lawful. That is as far as the Court’s function permits this judgment to go. Individual decision-makers will make their own planning judgments applying the prior approval controls, correctly interpreted, to the materials before them. This judgment does not mean that individual decision-makers would be bound to determine the appeals on the three properties the subject of these proceedings in the way that in fact occurred. That is always a matter of judgment for the person or authority taking the decision. I would also add that there is no evidence before the Court to show that the correct interpretation of Class AA of Part 1, along with the related Classes in Part 20, will in practice make it impossible or difficult for developers to rely upon these permitted development rights.”

As it is, given their inherent restrictions and limitations, these new GPDO rights have not yet delivered substantially more homes. Holgate J is of course right that his interpretation will not make it impossible for developers to rely on them – but surely it will make it more difficult in many cases. Despite the analysis in the judgment as to what was said in consultation documents in relation to the new rights, I’m left wondering whether the Government appreciated what confusion these changes would cause and, ultimately, their potentially limited advantages over an application for full planning permission?

As trailed earlier, this week’s Planning Law Unplanned clubhouse event will be all about reducing energy use and increasing renewables, with a sparky collection of guests I assure you… 6 pm, Tuesday 8 February 2022, link to app and event here.

Simon Ricketts, 5 February 2022

Personal views, et cetera

Extract from Genesis, Abacab

“Planning Powers” A Pawn In Unsafe Cladding Negotiation

It’s a scandal that leaseholders, through no fault of their own, have been exposed to potentially massive liabilities in relation to building defects for which obviously they were in no way responsible.

Isn’t it obvious that where buildings have been constructed unsafely, in breach of legal standards at the time, then those responsible for that work should be liable (with speedy resolution of that issue and gap funding for works in the interim), but that where the work was done to legal standards at the time we as taxpayers should pick up that burden?

In terms of arriving at a solution, has Michael Gove’s 10 January “developers must pay” announcement made things worse or will it prove to be a turning point?

We’re all guilty of swimming along in our separate lanes. I’m a planning lawyer, not a construction lawyer, property litigator or tax lawyer. But I wanted to understand the basics of what exactly is happening here, particularly since the Secretary of State was reported as threatening to use the planning system to make life more difficult for developers if they don’t agree a “fully funded plan of action”.

Since February 2021, we have known that the Residential Property Developer Tax will apply from 1 April 2022 in relation to residential property development recognised in accounting periods ending on or after that date. It will apply to companies or groups of companies undertaking UK residential property development with annual profits in excess of £25 million and is a new 4% tax on profits they make on UK residential property development. As set out in HMRC’s 27 October 2021 policy paper, “the tax forms part of the government’s Building Safety Package aiming to bring an end to unsafe cladding, provide reassurance to homeowners and support confidence in the housing market. Given the significant costs associated with the removal of unsafe cladding, the government believes it is right to seek a fair contribution from the largest developers in the residential property development sector to help fund it.” The Government’s aim is to raise £2bn of revenue over a ten year period.

We have also known that the Building Safety Bill is currently going through the House of Lords. Clause 57 of the Bill would enable the Secretary of State to impose a building safety levy “for the purpose of meeting any building safety expenditure”. As explained in a November 2021 DLUHC building safety levy factsheet:

“This is a new levy on developers. In addition to the new Residential Property Developer Tax (which will tax the profits of larger developers for at least 10 years), the levy will contribute towards fixing historical fire safety defects, including unsafe cladding.

We will establish three regulatory “Gateways” at key stages in design and construction, and introduce new requirements during construction, that will apply to higher-risk buildings:

· Planning Gateway one – at the planning application stage

· Gateway two – before building work starts

· Gateway three – when building work is completed

These are stop/go decision points that must be passed before a development can proceed to the next stage, strengthening regulatory oversight of design and construction. At Gateway two, construction cannot begin until the Building Safety Regulator approves the building control application.

There will be sanctions for failure to pay the levy which will be defined in regulations. This will result in the Gateway two application not being approved by the Building Safety Regulator.”

“The levy will apply to developments within scope of the Gateway 2 regulatory process, unless otherwise excluded. That means residential buildings or care homes over 18m or 7 storeys – but subject to exclusions, which we are consulting on.”

Consultation has been carried out as to the design of the levy but we have been waiting for the Government’s response and the quantum of the levy has not yet been determined.

The Secretary of State has been faced with the dilemma of how to relieve leaseholders from their unjustified burden at as little cost to the public purse as possible, presumably recognising that the building safety levy is not going to be able to achieve anything like what is needed .

It was revealed via a 7 January 2022 tweet from the BBC’s Lewis Goodall that Michael Gove had sought clearance from the Treasury “to make a statement resetting the Government’s approach to building safety ahead of Commons Report Stage of the Building Safety Bill”.

The tweet included a screenshot of the response from HM Treasury which authorises DLUHC to seek to secure £4bn funding from developers:

“You may use a high-level “threat” of tax or legal solutions in discussions with developers as a means of obtaining voluntary contributions from them.”

“…the taxpayer should not be on the hook for further costs of remediation”.

“DLUHC budgets are a backstop for funding these proposals (in full i.e. the £4bn if required) should sufficient funds not be raised from industry. You must prioritise building safety oversupply”.

“Lenders and insurers are not included in the “polluter pays” piece – and no contributions should be sought from them”.

Formal announcements were then made by the Secretary of State in the form of:

• a press statement, Government forces developers to fix cladding crisis (DLUHC, 10 January 2022)

“Mr Gove has today written to industry giving them a deadline of early March to agree a fully funded plan of action including remediating unsafe cladding on 11-18 metre buildings, currently estimated to be £4 billion.

He warns he will take all steps necessary to make this happen, including restricting access to government funding and future procurements, the use of planning powers and the pursuit of companies through the courts. He adds that if industry fails to take responsibility, the government will if necessary impose a solution in law.”

• The “Dear Residential Property Developer Industry” letter referred to in the announcement:

“I am sure you are as committed as I am to fixing a broken system. I want to work with you to deliver the programme I have set out. But I must be clear, I am prepared to take all steps necessary to make this happen, including restricting access to government funding and future procurements, the use of planning powers, the pursuit of companies through the courts and – if the industry fails to take responsibility in the way that I have set out – the imposition of a solution in law if needs be.”

• A statement to the House of Commons “…we will press ahead with the building safety fund, adapting it so that it is consistent with our proportionate approach. We will now set a higher expectation that developers must fix their own buildings, and we will give leaseholders more information at every stage of the process.”

Note the references in the announcement and letter to “the use of planning powers”. Remember that reference in the Treasury letter to high-level threats?

Tory cladding shift leaves relations with UK developers in tatters (FT, 18 January 2022)

On 20 January the Secretary of State met with “senior executives from 20 building firms” but according to the Guardian:

“ Stuart Baseley, the executive chairman of the Home Builders Federation, said the industry lobby group had made its position clear at the meeting and would continue to engage constructively with the government. “We absolutely agree that leaseholders should not have to pay to remediate buildings. However we firmly believe that any further solutions must be proportionate.”

He said the bill should be shared with “other companies, sectors and organisations”, including “freeholders and the materials providers who designed, tested and sold materials that developers purchased in good faith”.

“As we made clear to the government, we do not believe it should fall to responsible UK housebuilders to fund the remediation of buildings built by foreign companies, developers no longer trading, or other parties.”

Another piece, Others must help pay for cladding work, developers tell Gove following talks (Inside Housing, 21 January 2022) quotes Gove:

“We have made a start through the residential property developer tax and the building safety levy, both announced last February, but will now go further. I will today write to developers to convene a meeting in the next few weeks, and I will report back to the House before Easter. We will give them the chance to do the right thing. I hope that they will take it. I can confirm to the House today that if they do not, we will impose a solution on them, if necessary, in law.”

In the meantime, the House of Commons Levelling Up, Housing and Communities Committee announced an inquiry into building safety funding on 19 January 2022, with this statement from chair Clive Betts:

“The Secretary of State’s announcements on 10 January were a welcome step towards finally addressing the question of meeting the costs of making residential blocks safe rather than dumping the burden on flat-owners. Leaseholders should not be liable for the costs of removing hazardous cladding from their buildings nor the additional work necessary to make their flats safe.

“In our new inquiry, we want to examine the effectiveness and impact of the Government’s planned measures to make developers and industry pay. We also wish to scrutinise whether the Secretary of State’s approach goes far enough to finally fix this crisis and examine what the funding arrangement to be agreed with industry should look like. We will also want to examine the risk to the Department’s budget, particularly around social housing, if it is not able to secure sufficient funds from industry.”

The public evidence sessions for this inquiry are scheduled take place shortly and will conclude ahead of the Secretary of State’s planned report back to the House of Commons before Easter.”

How is all this going to play out? Who knows. If the development industry (a ridiculously loose term) doesn’t reach agreement with DLUHC, what really could we see in terms of the impacts on planning processes? Of course neither in law nor in practice could the Secretary of State discriminate in planning decision-making against any specific companies holding out from a deal but surely it will influence the priority or not that he gives to measures to increase housing supply by way of planning reform and/or his inclination or not to intervene with authorities where plan making has again stalled and surely it will influence the level at which the building safety levy is set, discriminating hugely against those bringing forward development proposals as against those companies which are responsible for past failings.

No-one should be under any illusion that these issues are easy. Is a “Dear Residential Property Developer Industry” letter accompanied by threats, in order to extract money from companies regardless of culpability, really the answer? We shall find out soon enough.

Meanwhile, this week’s clubhouse Planning Law Unplanned session is entitled “What do we mean by “digitising planning”? Possible futures”. We have five amazing guests: Euan Mills (digital planning lead, DLUHC), Graham Stallwood (director of planning, Planning Inspectorate), Mary Elkington, director, Figura Planning), Stefan Webb (place director, FutureGov) and Shelly Rouse, principal consultant, Planning Advisory Service). Join the app and event here.

Simon Ricketts, 21 January 2022

Personal views, et cetera

Just What Is It That Makes First Homes So Different, So Appealing?

First Homes have been stuck onto the “affordable housing policy” collage, not as net additional affordable housing but as a replacement, mandated by policy, for other forms of affordable housing which would have been secured by local planning authorities in any event.

I summarised the 24 May 2021 government announcement and how the first homes mechanism is meant to operate in my 28 May 2021 blog post Moving Into First Homes: 3 Key Deadlines (TL;DR: at least 25% of all affordable housing secured on a development should be first homes; must be for first time buyers; must carry at least 30% discount in perpetuity; household income cap of £80,000, or £90,000 in London).

The House of Commons Library first homes information page (3 November 2021) is also useful for its links to the relevant announcements and documents.

As I summarised in the blog post, there were three key dates to implementation of the new regime:

“28 June 2021

From the guidance: “ Local plans and neighbourhood plans submitted for examination before 28 June 2021, or that have reached publication stage by 28 June 2021 and subsequently submitted for examination by 28 December 2021, will not be required to reflect the First Homes policy requirement”

(However: “Planning Inspectors should consider through the examination whether a requirement for an early update of the local plan might be appropriate.”)

28 December 2021

From the guidance: “The new First Homes policy requirement does not apply for the following:

• sites with full or outline planning permissions already in place or determined (or where a right to appeal against non-determination has arisen) before 28 December 2021”

28 March 2022

It also does not apply to “applications for full or outline planning permission where there has been significant pre-application engagement which are determined before 28 March 2022”.

So if you wish to avoid the new requirement and you are not in an area where a plan has been adopted under the transitional arrangements, you need to have submitted your application so that it will be determined (or so that that the statutory right to appeal on the basis of non-determination has arisen) by 28 December 2021 and if there is any doubt as to whether you will meet that deadline it would be prudent to have engaged in “significant pre-application engagement” such that the deadline for achieving permission is 28 March 2022.”

The first two dates have now passed. I have not yet seen examples of first homes being secured as part of a section 106 agreement. What experience is there out there?

As originally promised in the May 2021 announcement, on 23 December 2021 DLUHC published model section 106 clauses for first homes. At the same time it updated its planning practice guidance. It is really good to see the model clauses, which will be a useful starting point.

Stuart Tym from Shoosmiths wins the “working over Christmas” prize with his excellent 5 January 2022 Local Government Lawyer article First Homes: model Section 106 agreement (although I’m going to deduct a point for his conclusion that “the devil remains in the detail” – when is the devil not in the detail?!).

The first clubhouse Planning Law Unplanned session for 2022 is at 6pm on Tuesday 11 January and will be another really key event, particularly if you have any interest in the survival of theatre and live arts in the face of this pandemic: “MAKING DRAMA OUT OF A CRISIS: theatre vs covid”, featuring Broadway theatre producer (and ex US environmental lawyer) David Siesko; chair of Shakespeare’s Globe (and former planning lawyer) Margaret Casely-Hayford CBE, and theatre manager/Theatres Trust cultural policy manager Tom Stickland. Link to app here.

Simon Ricketts, 7 January 2022

Personal views, et cetera

Just What Is It That Makes Today’s Homes So Different, So Appealing? by Richard Hamilton (1956)

Strong Beer: London Tall Buildings & The Master Brewer Case

If you are dealing with any proposal for a building of six storeys or more in London, R (London Borough of Hillingdon) v Mayor of London (Lang J, 15 December 2021) is a vital case, because it resolves for now the question of how the relevant policy in the London Plan, policy D9, is to be interpreted. Is it right, as have some have contended, that tall buildings may only be developed in locations identified as suitable in boroughs’ local plans? Lang J says no.

The three relevant parts of the policy for the purposes of this issue, as quoted in the case, read as follows:

“Definition

A

Based on local context, Development Plans should define what is considered a tall building for specific localities, the height of which will vary between and within different parts of London but should not be less than 6 storeys or 18 metres measured from ground to the floor level of the uppermost storey.

Locations

B

1) Boroughs should determine if there are locations where tall buildings may be an appropriate form of development, subject to meeting the other requirements of the Plan. This process should include engagement with neighbouring boroughs that may be affected by tall building developments in identified locations.

2) Any such locations and appropriate tall building heights should be identified on maps in Development Plans.

3) Tall buildings should only be developed in locations that are identified as suitable in Development Plans.

Impacts

C

Development proposals should address the following impacts:

1) visual impacts […]

2) functional impact […]

3) environmental impact […]”

(there is also a fourth part – as to provision for public access).

The big question has been whether the first and second parts of the policy have to be passed before a scheme can be judged as against the detailed criteria in part C.

The text underlined had been added pursuant to a direction by the Secretary of State dated 10 December 2020 before the plan was then adopted on 2 March 2021.

Quoting from the judgment:

“The Secretary of State’s covering letter, dated 10 December 2020, said as follows:

“….. I am issuing a new Direction regarding Policy D9 (Tall Buildings). There is clearly a place for tall buildings in London, especially where there are existing clusters. However, there are some areas where tall buildings don’t reflect the local character. I believe boroughs should be empowered to choose where tall buildings are built within their communities. Your draft policy goes some way to dealing with this concern. In my view we should go further and I am issuing a further Direction to strengthen the policy to ensure such developments are only brought forward in appropriate and clearly defined areas, as determined by the boroughs whilst still enabling gentle density across London. I am sure that you share my concern about such proposals and will make the required change which will ensure tall buildings do not come forward in inappropriate areas of the capital.”

DR12 set out a “Direction Overview” as follows:

“The draft London Plan includes a policy for tall buildings but this could allow isolated tall buildings outside designated areas for tall buildings and could enable boroughs to define tall buildings as lower than 7 storeys, thus thwarting proposals for gentle density.

This Direction is designed to ensure that there is clear policy against tall buildings outside any areas that boroughs determine are appropriate for tall buildings, whilst ensuring that the concept of gentle density is embodied London wide.

It retains the key role for boroughs to determine where may be appropriate for tall buildings and what the definition of tall buildings are, so that it is suitable for that Borough.”

The ‘statement of reasons’ for DR12 stated inter alia:

“……The modification to policy D9 provides clear justification to avoid forms of development which are often considered to be out of character, whilst encouraging gentle density across London.”

The issue had come before the court in the context of planning permission granted by the Mayor of London for the redevelopment of the former Master Brewer Motel site in Hillingdon – a development promoted by Inland Homes for a series of buildings of up to 11 storeys in height. Hillingdon Council had resolved to refuse planning permission on the basis that tall buildings in this location would be contrary to its local plan but the Mayor had recovered the application for his own determination and approved it on 30 March 2021.

There were three grounds to the judicial review brought by the Council:

“i) The Defendant misinterpreted Policy D9 of the London Plan 2021 by concluding that, notwithstanding conflict with Part B of that policy, tall buildings were to be assessed for policy compliance against the criteria in Part C.

ii) The Defendant erred in failing to take into account a material consideration, namely, the Claimant’s submissions and accompanying expert evidence as to air quality.

iii) The Defendant acted unlawfully and in a manner which was procedurally unfair in that he failed to formally re-consult the Claimant or hold a hearing, prior to his re-determination of the application, following the adoption of the London Plan 2021.”

I am only focusing on the first ground but the third ground may also be of interest on the question of when an application needs to be re-consulted upon or re-considered in the light of changes in policy.

The analysis carried out by the judge is interesting.

First of all she considers whether the meaning of the policy was “clear and unambiguous” such that under legal principles of interpretation, the courts should not have regard to extrinsic materials to assist in interpretation. She recorded that “[a]ll parties contended that the meaning of Policy D9 was clear and unambiguous, despite the differences in their interpretation of it. In those circumstances, applying the principles set out above, I consider that I ought not to have regard to the letter from the Secretary of State to the Defendant dated 10 December 2020 (paragraph 46 above) as it is not a public document which members of the public could reasonably be expected to access when reading Policy D9. Furthermore, it is of limited value as, taken at its highest, it sets out the Secretary of State’s intentions, whereas the Court must consider the meaning of the words actually used in Policy D9, as amended by DR12, which in my view did not give effect to the expressed intentions in the letter.”

(I’m scratching my head as to how the various parties to litigation can be arguing as to the meaning of a policy but can agree that the meaning of the policy is “clear and unambiguous”. In saying that the Secretary of State’s direction letter “was not a public document which members of the public could reasonably be expected to access when reading Policy D9”, I take it that she was not saying that it was not a “public document”, which of course it was, but that a member of the public should not be expected to go searching for such documents to assist with interpretation of a policy if it is indeed clear and unambiguous).

She then concludes that the council’s interpretation of the policy “cannot be correct”:

“Read straightforwardly, objectively and as a whole, policy D9:

i) requires London Boroughs to define tall buildings within their local plans, subject to certain specified guidance (Part A);

ii) requires London Boroughs to identify within their local plans suitable locations for tall buildings (Part B);

iii) identifies criteria against which the impacts of tall buildings should be assessed (Part C); and

iv) makes provision for public access (Part D).

There is no wording which indicates that Part A and/or Part B are gateways, or pre-conditions, to Part C. In order to give effect of Mr Howell Williams QC’s interpretation, it is necessary to read the words underlined below into the first line of Part C to spell out its true meaning:

“Development proposals in locations that have been identified in development plans under Part B should address the following impacts.”

But if that had been the intention, then words to that effect would have been included within the policy. It would have been a straightforward exercise in drafting. It is significant that the Secretary of State’s direction only required the addition of the word “suitable” to Part B(3). It did not add any text which supports or assists the Claimant’s interpretation, even though the Secretary of State had the opportunity to do so.

In my view, the context is critical to the interpretation. Policy D9 is a planning policy in a development plan. By section 70(2) TCPA 1990 and section 38(6) PCPA 2004, there is a presumption that a determination will be made in accordance with the plan, unless material considerations indicate otherwise. Thus, the decision-maker “will have to decide whether there are considerations of such weight as to indicate that the development plan should not be accorded the priority which the statute has given to it”: per Lord Clyde in City of Edinburgh at 1459G. Furthermore, the decision-maker must understand the relevant provisions of the plan “recognising that they may sometimes pull in different directions”: per Lindblom LJ in BDW Trading Ltd at [21], and extensive authorities there cited in support of that proposition. As Lord Reed explained in Tesco Stores Ltd v Dundee City Council, “development plans are full of broad statements of policy, many of which may be mutually irreconcilable, so that in a particular case one must give way to another”.

The drafter of Policy D9, and the Defendant who is the maker of the London Plan, must have been aware of these fundamental legal principles, and therefore that it was possible that the policy in paragraph B(3) might not be followed, in any particular determination, if it was outweighed by other policies in the development plan, or by material considerations. It seems likely that policy provision was made for such cases, given the importance of the issue.

In considering whether to grant planning permission for a tall building which did not comply with paragraph B(3), because it was not identified in the development plan, it would surely be sensible, and in accordance with the objectives of Policy D9, for the proposal to be assessed by reference to the potential impacts which are listed in Part C. The Claimant’s interpretation leads to the absurd result that a decision-maker in those circumstances is not permitted to have regard to Part C, and must assess the impacts of the proposal in a vacuum.”

Therefore:

“Notwithstanding the non-compliance with Part B of Policy D9, the Defendant determined that the proposal accorded with the provisions of the development plan when read as a whole. That was a planning judgment, based on the benefits of the proposal, such as the contribution of much-needed housing, in particular affordable housing, and the suitability of the Site (brownfield and sustainable, with good transport). The Defendant was satisfied, on the advice of the GLA officers, that sufficient protection from air quality impacts would be achieved. The Defendant was entitled to make this judgment, in the exercise of his discretion.”

Accordingly, boroughs do not have a veto, by virtue of their local plans, as to where tall buildings may be located in their boroughs – policy D9 is not to be interpreted in a way automatically treats proposals for tall buildings as contrary to the development plan where they are not supported in the local plan.

Whether or not this is what the previous Secretary of State intended with his direction may be another matter but of course the London Plan is adopted and free from the possibility of legal challenge (and, pragmatically, the Secretary of State could have course chosen to call in the application but did not) – and if parts A and B were indeed to be a necessary gateway there would be the immediate issue that any development of buildings of six storeys or more would be stymied as contrary to the development plan until boroughs’ plans had caught up with, and been examined in the context of, the new policy approach – hardly consistent with the Secretary of State’s urging for London to achieve a significant increase in housing delivery.

To mark the end of 2021 and, self-indulgently, the 5th anniversary of my firm, we have a unique Clubhouse event planned for 6 pm this Tuesday 21 December: “START ME UP: how Town Legal started 5 years ago – & why”. There will be a stageful of “day one” Townies: Clare Fielding, Patrick Robinson, Meeta Kaur, Benita Wignall, Spencer Tewis-Allen, our former chairman (and ex Herbert Smith Freehills COO) John Mullins and former associate Ricky Gama (now Leigh Day) as well as our good friends, without whom…, Drew Winlaw (Simmons Wavelength) and Beau Brooke (Kindleworth). If you ever wondered what it takes to create a professional services firm from scratch, do tune in. Link to app here.

Simon Ricketts, 17 December 2021

Personal views, et cetera

Photo by Jon Parry courtesy Unsplash

Stonewater – Paper – Scissors

We all had a good, evidence-based, moan about CIL on clubhouse last week.

Stonewater (2) Limited v Wealden District Council (Thornton J, 15 October 2021) is of course only the latest example of the complexities and uncertainties that arise – in particular on the question of application of reliefs and exemptions (the importance and number of which has been driven by the fact that CIL liability is in most cases so significant) but also on the question of how to mesh the operation of the CIL regime with the operation of the planning system without jamming the whole thing up.

There are plenty of good summaries and critiques of the judgment by now (for instance this Town Library summary by my colleague Safiyah Islam, or this 18 October 2021 blog post by Nicola Gooch, CIL, S.106 Agreements & Affordable Housing Relief: What happens when the housing crisis hits political reality).

This is my take:

Land with planning permission for 169 houses was acquired by Stonewater, a registered provider of affordable housing. The section 106 agreement provided for 59 dwellings within the development to be affordable housing, with a specified tenure mix. The number of affordable housing units was to “comprise 35% of the Dwellings within the Phase (which shall be rounded up to the nearest whole unit”.

Stonewater’s model was more enlightened than that of the developer which had secured the permission. Stonewater “regularly acquires sites which are subject to a section 106 agreement which secure a low or policy compliant level (35%) of affordable housing, with a view to increasing affordable housing delivery to 100%. The Court was told that this is not unusual, and the Claimant is not alone in doing so. Grants from Homes England are based on the principle that registered social housing providers provide additional affordable housing over and above the levels secured in planning obligations.”

Relief from CIL is available for affordable housing via social housing relief. There are criteria set out in regulation 49 of the CIL Regulations which do not include any requirement that the affordable housing is secured by way of section 106 agreement or condition. After all, if there is a clawback period of seven years within which CIL has to be paid with interest if the occupation no longer meets the criteria for relief.

Unsurprisingly, Stonewater sought social housing relief for the whole development, given that it proposed to deliver it all as affordable housing meeting the criteria in regulation 49. The council refused relief on the basis that a varied section 106 agreement would first be required, committing in the agreement for all the dwellings to be delivered as affordable housing. The council later additionally argued that the existing section 106 agreement was to be interpreted as rendering it unlawful for more than 35% of the dwellings to be delivered as affordable housing.

It might be asked why Stonewater didn’t simply enter into the section 106 agreement required – but of course that would have been likely to destroy its entitlement to Homes England funding given that on the face of it there would then be no additionality, and why should it enter into a further agreement if that was not required by the Regulations? Stonewater challenged the council’s decision by way of judicial review. The first issue melted away once the Secretary of State was joined as an interested party and the council conceded that a section 106 agreement obligation that a dwelling be delivered as affordable housing is not a prerequisite to a claim for social housing relief (although it can be useful evidence that the dwellings will be used in a way that meets the criteria for relief) – as did any notion that the relief is discretionary on the part of the authority rather than mandatory. So the only question was whether delivery of more than 35% of the homes would be in breach of the section 106 agreement.

The judge saw the 35% requirement as fixed, not a minimum:

“In my assessment, the language of the document points to an interpretation that the agreement controls the amount of affordable housing that can come forward, by fixing a specific requirement of 59 dwellings or 35% affordable housing. Paragraph 2(iii) of Schedule 1 says that precisely 35% of the units in any phase must be affordable. Accordingly, if the development proceeds in multiple phases, there must be 35% in each phase and thus, inevitably, as a matter of maths, 35% in aggregate. This specific requirement permeates the definitions, which draw a clear distinction between the ‘Affordable Housing Units’ which are “the 59 Dwellings … which shall be for use as affordable housing” and ‘the Private Dwelling Units’ which means everything other than the 59 Dwellings. Paragraph 3 of Schedule 1 provides the mechanism whereby the Council can exercise control in all cases (not just multiple phases) over the provision of affordable housing. The, broadly defined, Affordable Housing Scheme must be submitted for approval and development may not commence until the Council has approved it.

Accordingly, a scheme which provides less, or more units, of affordable housing would not comply with the section 106 requirement to provide 59 units and hence would be contrary to its terms and to that extent unlawful, albeit the Council would have a discretion to vary the Section 106 agreement or enter into a new agreement.”

I must say I find this a strained interpretation. As the claimant pointed out, there would be no reason in policy to restrict the amount of affordable housing in the scheme – why should the developer not be free to dispose of any of the dwellings at less than market value? Indeed, although not I think mentioned in the judgment, how would such a restriction meet the test in regulation 122? Would an authority really succeed in arguing that a developer was in breach of its section 106 agreement if it disposed of market units at less than market value? Of course not.

The judge asserted that “whilst affordable housing is generally desirable in policy terms, it does not follow that more affordable housing is always desirable without limit. There may be proper planning reasons to prefer a mixed scheme. For example, in this case, the Court’s attention was drawn to extracts from the Planning Officer’s report which suggest the expected CIL receipts from a scheme with 35% affordable housing were relevant to the decision making. The highways authority had expressed concern about the potentially severe impact from the development on the local highway network and considered mitigation was required. It was common ground that the necessary mitigation was to be funded by the CIL receipts from the development. However, it is neither necessary nor appropriate for this court to evaluate any preference for a mixed scheme on the facts of this case. It is sufficient to say that it is in accord with the statutory planning context, and / or “common sense”, to have a section 106 agreement which retains control over the provision of affordable housing. This does not defeat the achievement of more affordable housing since the Council, in the exercise of its planning judgment, may vary the Section 106 to permit this, if persuaded of its desirability.” However, how does this sit with the council’s position that it would grant the relief simply if Stonewater entered into a section 106 agreement varying the previous arrangements and requiring all the dwellings to be affordable?

Surely, instead, this was an overly prescriptive reading of the Regulations on the part of the authority and a strained interpretation of the section 106 agreement on the part of the judge? It is truly depressing to think about how long commencement of development is held up on schemes until disputes such as this are resolved – and how so much money has been wasted on all sides.

Simon Ricketts, 13 November 2021

Personal views et cetera

This week’s Planning Law Unplanned delicacies on clubhouse, at 6pm on Tuesday 16 November, will be Sage and Tulip. We’ll be hearing from Kate Olley, who appeared for Mr Sage in the recent High Court case on the important and topical question as to when planning permission is needed to run a business from home, and we’ll be discussing the Secretary of State’s refusal of planning permission for the Tulip in the City of London. Aside from Kate, our guests include arch-planorak, barrister Zack Simons. Thoughts on the decisions? Then join us, to listen or participate. Link to app here.

Courtesy wikipedia

Live/Work, Repeat

Do you get that blurry feeling too?

I could have been dictating this piece for the overnight typing pool, slipping into the firm’s library to check the case references and tricky spellings, being brought printouts of drafts by a messenger in a firm-logo-branded shirt before the desktop publishing department do their weird stuff on The Firm’s Only Apple Mac.

Those were the days, working in a law factory, as we used dismissively to call our daytime workplace over an overpriced drink in a city bar after hours, incommunicado until the next morning.

Or I could be writing it at home in an hour or two of self-discipline away from an overnight stream of emails and an intertwined social media timeline of planning, law, politics, music, football and hopefully an amusing cat video or ten.

I don’t even know whether writing this blog is work or not.

We’re all grappling more than ever before with questions such as:

⁃ Where are the boundaries between work and home?

⁃ What is the continuing role for formal workspaces when the necessary components for core “office” work are simply a laptop, mobile phone and quiet space; for lockup shops when everyone can be their own etsy or e-bay business, or for studios and workshops where the work carried out may largely rely on nothing more than manual dexterity plus some tech?

⁃ In an age where the average household is having multiple home deliveries of all sorts of goods, what level of business activity is to be regarded as normal or appropriate for a residential area? Can you even generalise – or does it depend on the nature of the area and its dwellings?

⁃ Is this all a Good thing or a Bad thing and to what extent is it any business of the planning system? If it was the industrial revolution that brought about such a sharp delineation between where we live and where we work, are we now in a post-industrial revolution and are there indeed environmental, social and economic benefits to a greater degree of community, as opposed to commuter, living? How to reinvent the office so that it is about unique human communication, rather than as a left behind place, its complex physical functions, systems and gadgets long outsourced to laptop and phone?

Two recent cases led to these thoughts. The main one was Sage v Secretary of State (Sir Duncan Ouseley, 28 October 2021) (I know, one planning law Sage case was confusing enough and here comes another). I very much recommend and won’t repeat our Town Library case summary written by my colleague Stephanie Bruce-Smith (work-related plug: you can still subscribe for free to these brilliant weekly summaries by the Town Legal team of all Planning Court and relevant appellate judgments here).

Sir Duncan Ouseley in his ruling considers whether the advice in the Government’s Planning Practice Guidance is correct as to when planning permission is needed “to homework or run a business from home”. The guidance says this:

“Planning permission will not normally be required to home work or run a business from home, provided that a dwelling house remains a private residence first and business second (or in planning terms, provided that a business use does not result in a material change of use of a property so that it is no longer a single dwelling house). A local planning authority is responsible for deciding whether planning permission is required and will determine this on the basis of individual facts. Issues which they may consider include whether home working or a business leads to noticeable increases in traffic, disturbance to neighbours, abnormal noise or smells or the need for any major structural changes or major renovations.”

Sound sensible to you? Then be wary, because the judge disagreed. He considered that the passage in brackets at the end of the first sentence is expressed too widely and also that the question of environmental impact (the matters referred to in the second sentence) is of limited relevance.

The facts as summarised by the judge were as follows:

“Mr Sage, lives in a two-storey semi-detached house with a garden, about 20 metres deep, in a residential street in a primarily residential area of Beckenham in the London Borough of Bromley. At the rear of his garden is a timber out-building, with windows, which is used in part as a garden shed, and in part as a gym. Mr Sage keeps gym equipment there including a treadmill, cross-trainer, weights, balls, bench, and punch bag. It has no toilet or showering facilities. The garden, and the shed, can be accessed via a passage to the side of the house, shared with the neighbouring property. Mr Sage uses the gym himself and he permits family and friends to use it. He has used the gym part of the shed since 2016 for his business as a personal trainer, for paying clients, who attend at the premises.”

Bromley had refused Mr Sage’s application for a certificate of lawful use, disagreeing that either the use was ancillary to the primary residential use of his property or that that the use fell within section 55 (2)(d) of the Town and Country Planning Act 1990: “the use of any buildings or other land within the curtilage of a dwellinghouse for any purpose incidental to the enjoyment of the dwellinghouse as such;…“

(In passing, it’s not just about working from home, be careful about your hobbies: “Wallington v Secretary of State for Wales (1991) 62 P&CR 150, CA, concerned an enforcement notice alleging that the keeping of 44 dogs as a hobby was not incidental to the use of a dwelling house “as such”, that is as a dwellinghouse. The notice was upheld and the dogs limited to 6. The fact that the owner genuinely regarded this as a hobby “cannot possibly suffice to prove by itself” that the purpose was incidental to the enjoyment of the dwelling house as a dwellinghouse. Significance had to be given to the words “as such”.”)

An inspector dismissed Mr Sage’s appeal and he challenged that decision.

“This latter Guidance suffers from two main problems. The first question is what use is being made of the land, including its ancillary uses, and, in the case of a dwelling house, whether any purposes to which it is put are reasonably incidental to its use as a dwelling house. The passage in brackets at the end of the first sentence of this guidance is correct but too readily capable of leading to the concept, of a material change of use or a purpose incidental to the use of dwellinghouse as such, being misunderstood. This is because a business use in a dwellinghouse may well be secondary to the primary residential use of the dwellinghouse; but may still create a material change of use, be for a non-incidental purpose. A secondary use will involve a material change of use of the dwellinghouse to a mixed or composite use, as was found to have occurred here, unless it is so secondary that it is merely ancillary to the residential use as a dwelling house such that there is still just that one use; or in the case of a dwelling house, the purpose at issue is reasonably incidental to the enjoyment of the dwelling house as such. This is a crucial point which the Guidance ignores or blurs badly.

Second, a material change of use can be made without any adverse environmental impact at all. Treating environmental impact as the seemingly crucial issue for the judgment as to whether a material change of use has occurred, or a purpose is reasonably incidental is not consistent with clearly established law. The crucial test is whether there has been change in the character of the use. Environmental impact can be relevant as evidence that a material change has occurred, because a use of the new character may be capable of yielding environmental impacts or have done so already. The Guidance as written is apt to mislead as to what the real question is, and as to the true but limited relevance of environmental impact.

Once the use of the outbuilding for the business of a personal training studio for paying visitors is accepted as an ancillary to or reasonably incidental to the use of a dwellinghouse as such, the difficulty of measuring the materiality of a change in the scale of the activities or their mode of operation points to the limitations of using environmental impact as the measures not of impact but of materiality of the change of use. It appears quite difficult to contend that using the garden for exercise, warming up and warming down, post-exercise conversation, refreshment, or using the outbuilding with the doors open in hotter weather or if the air-conditioning is inadequate, or enabling visitors to traipse to the lavatory and back, involves a material change of use, when use of the outbuilding for 6 days a week for personal training did not. This is the more so if others, who are not commercial clients, do so. It is difficult to see that an increase in numbers and disturbance would be of itself a material change of use. The neighbours might change; a new owner of the house could intensify the use. There could be, as here, a local difference of view about the effect of the business. This all is grist to the mill of the limitations of the role of environmental impact in resolving the materiality of a change in use and the incidental nature of the additional use. The Guidance is far too loose to reflect the true focus of the question at issue.”

There is then this final fascinating passage:

“I also appreciate that there are many forms of service offered within a dwelling house, from private tuition, including in music or singing, child minding, medical services. I accept that what is normal or reasonably incidental now may have shifted with changes in work habits as a result of Covid. This is not relevant to this particular case. And an important distinction would have to be drawn between working from home, where work-related visitors were few and far between, and working from home which took the form of routine and frequent work-related visitors, notably customers. However, the question of how much actual noise the music or maths teacher and pupil make, how much actual disturbance is generated by young children or dogs being minded, is not the touchstone of the materiality of the change of use, although it may point to a nature or degree of use which is materially different from that of a dwellinghouse or its incidental purposes. One is a residential use, and the other is a residential and commercial use. Of course, they both may vary in their intensity and impact, but one cannot be controlled through the need for planning permission and the other can and should be.”

How is this distinction really to be drawn, clearly, in practice?

The second case is a judgment of the Central London County Court. AHGR Ltd v Kane Laverack (HHJ Johns QC, 27 September 2021). The judgment is unreported but summarised in County Court at Central London considers Live/Work units (Landmark chambers, 27 October 2021). Nostalgia time for some of us – “live/work units” are now a rather outmoded concept but were once given favourable policy status by certain London authorities in specific areas.

In leafing through books in the library (ok, by googling) I came across this excellent 2005 report by Andrew Lainton prepared for the London Borough of Hammersmith and Fulham, Does Live/work? Problems and Issues concerning Live/Work Development in London:

“ The concept took off in London during the late 1990s. The concept was initially welcomed by many planning officers as they saw it meeting multiple employment and housing objectives. Initially proposals were by individual and artists, however developers soon became involved as it became seen as a means of securing planning permission in areas where existing zonings made development difficult.

There was a gradual disillusionment with the concept and many planners began to see the concept as a ‘fig leaf’ for primarily housing schemes. Policies in most boroughs have significantly tightened.

Some developers are quite open that Live/Work is simply a ruse for securing planning permission. There is widespread evidence of large scale residential reversion and little evidence of continued employment occupancy, other than in areas where there is a strong market for small offices where units are more likely to revert to employment use. The search for examples of good ‘work/ live’ practice has proven a largely barren one.”

AHGR was a landlord and tenant case which concerned the proper interpretation of a user clause in a lease required use “as a live/work unit in accordance with the terms and conditions of the planning permission”.

Excitingly for us lawyers, but leading to a rather curious outcome, it revolved around the interpretation of “/“: does “live/work” means “live and work” or “live and/or work”? A salutary lesson for users of the dreaded slash…

To quote from the summary:

“The live/work unit had been built out as a flat, without apparent regard to the requirements set out in building regulations for commercial premises at the time. The user clause required use “as a live/work unit in accordance with the terms and conditions of the planning permission”. The Defendants (a barrister and doctor) had resided in the live/work unit primarily as their home, albeit that they had undertaken various work-related activities in their open-plan living space and spare room, such as writing books, publishing papers, and undertaking triaging and consultation of patients by phone. There was no designated work space in the unit and despite inspections over the years, no objections had been raised by the landlord’s agents to such use.”

“After a 4 day trial, HHJ Johns QC dismissed the claim. He concluded the planning permission meant “live and/or work”. The construction of the planning permission was central to the construction of the leasehold covenant and particular regard was had to: (i) the planning policy background to the permission, (ii) the absence of conditions, (iii) the fact that the plans marked the whole area as live/work, (iv) the fact that other plans referred to in the permission used a “/” to indicate “and/or”, (v) the planning framework (including the fact that a breach of planning control can have criminal sanctions) (vi) the fact that a “live and/or work” construction still serves a purpose of allowing a business to be run from the premises; and (vii) how the planning permission had been implemented. A 1999 Supplementary Planning Guidance document, which was relied on by the Claimant, did not alter that interpretation.

The Judge also held that if the clause had mandated work, the planning permission did not require running a business from the unit and the activities undertaken by the Defendants were sufficient.”

Given that the whole purpose of “live/work units” was to require an element of employment use, rather than just use for residential purposes the judgment does not sit well with any purposive approach to interpretation of the documents but life, and the nature of work, has certainly moved on.

I wrote a long time ago about the many definitional problems within the Use Classes Order C-classes, in my 1 July 2016 blog post Time To Review The “C” Use Classes? Those problems are multiplying. What new boundary lines do we need, if any?

Simon Ricketts, 6 November 2021

Personal views, et cetera

Our clubhouse session this Tuesday at 6pm will be another good one: CIL horror stories. Story tellers will include Tom Dobson, Zenab Hearn, Claire Petricca-Riding, Professor Samer Bagaeen and Graham Cridland. Link here.

Simonicity Towers