I hope you didn’t notice that there was no blog post last weekend. I really needed the clocks to go back again to give me enough time. Picking up the tablet and chisel a fortnight later is not easy.
So much to say!
Another planning minister bit the dust. I liked Iain Thomson’s quip on LinkedIn about 15 minute planning ministers – far more of a scourge than 15 minute cities.
As part of its ongoing market study into housebuilding the Competition and Markets Authority has published on 15 November 2023 two further working papers, on landbanks and planning rules. To quote from the press release:
“On land banks, the CMA’s analysis has found that, although land equivalent to over a million plots is held in landbanks, in most local areas that land is held by several different builders. The CMA is seeking feedback on this analysis, and in particular, whether local competition is being negatively impacted in the small number of areas where large amounts of developable land are controlled by a small number of housebuilders.
The CMA is continuing to examine the size of land banks overall, recognising that housebuilders need to hold a pipeline of land as sites pass through the planning system. The conclusions of this analysis will be published in the final report.”
“On planning, the CMA has developed options that the UK, Scottish and Welsh governments may consider when reforming their planning systems, including:
Whether a zoning or rules-based approach to development may help improve competition between housebuilders and boost housing delivery.
Making better use of councils’ limited time and resources by requiring them to only consult statutory stakeholders, rather than a wider group, as part of their assessment of planning applications. Late consultee responses on development could also be ignored.
Having an effective housing target which reflects the housing need of specific areas, and improving the ways governments ensure all councils have a proper local plan in place.”
Yep, another set of helpful suggestions as to planning reform.
But I wanted to step back from the politics and just shine a torch on two useful recent planning law cases. And to save myself from too much chiselling, all I am going to do is to point you to the following case summaries put out by those involved:
In the context of a challenge by local residents to an inspector’s decision to allow an appeal for a solar farm and battery storage scheme in Hampshire, the judgment covers a number of practical issues such as:
Where an environmental statement is to be updated at the appeal stage, can the appellant carry out the publicity and consultation process? Yes.
Can a party choose not to call a witness, despite having submitted that witness’ proof of evidence to the inquiry? Yes.
Does the Government’s Planning Practice Guidance on renewable and low carbon energy impose a requirement to consider alternatives where solar farms use best and most versatile agricultural land? No. Consideration of alternative sites will only be relevant to a planning application in “exceptional circumstances”.
Secondly, a summary by Landmark Chambers of NRS Saredon Aggregates Limited v Secretary of State and Worcestershire County Council (Eyre J, 16 November 2023), a case in which Landmark’s Jenny Wigley KC appeared for the successful claimant. Eyre J quashed an inspector’s decision refusing planning permission for a sand and gravel quarry in the green belt, on the basis that the inspector made a legal error in relation to the weight to be applied to the biodiversity net gain (BNG) that would arise from the project. To quote from the summary:
“It was agreed at the inquiry that the scheme would deliver over 39% BNG. The Inspector afforded ‘only moderate weight’ to this on the basis that “some of the biodiversity net gain that would be achieved is required to meet national policy and future legislative requirements in order to mitigate the environmental impact of the development”.
The High Court agreed with the Claimant that the Inspector’s judgement as to weight was affected by a mistaken view as to requirements of forthcoming legislation. Because there was no basis for considering that the legislation might be retrospective, it was plainly not applicable to the scheme to be determined:
“The effect of that interpretation is that when assessing the weight to be attributed to the biodiversity net gain for the purposes of assessing whether there were very special circumstances outweighing the harm to the openness of the Green Belt the Inspector reduced the weight on the basis of a mistaken view as to the law. He did so believing incorrectly that some of the net gain would be required in any event by reason of the forthcoming legislation. That was an error of law and meant that the Inspector exercised his planning judgement as to the weight to be given to that material consideration (namely the net gain) on a basis that was wrong in law.”
The case is a useful way of reminding decision makers that there is, as yet, no legal requirement for 10% biodiversity net gain. The relevant provisions in the Environment Act 2021 have yet to come into force and, when they do (in January, we’re now told), the requirement will only apply to new applications submitted on or after that date. There is a policy requirement in the NPPF for biodiversity net gain, but only that such gain should be positive, i.e above zero, and there are also varying policy requirements in some Local Plans, but still no legal requirement. In emphasising benefits of development proposals, it is useful to stress the degree of BNG being offered and, for all applications already in the system, it is worth pointing out that any degree of BNG goes above and beyond legal requirements and should be afforded due weight accordingly.”
Two reminders that the courts are often more useful than politicians in clarifying how important practical aspects of the planning system should work.
Another fact to note: in the NRS Saredon case, all four counsel were female. In the Bramley case, three of the five counsel were female, as well as of course the judge.
As always, these cases, together with any others handed down last week by the Planning Court or on appeal from the Planning Court, will feature in our Town Library Planning Court Judgments weekly update and you can subscribe for free at the link.
Thank you, Heather Sargent, for sharing this appeal win on LinkedIn. This is what I turn to LinkedIn for, rather than for posts about legal directory rankings!
This decision letter dated 6 October 2023 is a must-read for anyone grappling with Conservation of Habitats Regulations issues in relation to nutrient/water neutrality or recreational impact issues.
In summary, the Inspector, Michael Hayden was faced with two identical appeals against the refusal of planning permission relating to proposed residential development (up to 78 homes). The site straddles the South Downs National Park Authority and Horsham District Council areas.
There were various issues to be determined by the inspector but I just want to focus on one:
“the effect of the proposed development on the integrity of the Arun Valley Special Area of Conservation, Special Protection Area and Ramsar sites, with particular reference to water abstraction, taking account of the proposed water neutrality measures.”
I first covered the north Sussex water neutrality issue in my 19 October 2021 blog post Development Embargos: Nitrate, Phosphate & Now Water. This is equivalent to the nutrients issue which of course has recently been so much in the news – and where we await a fresh Bill to re-present the legislative fix rejected by the House of Lords in its report stage debate on the Levelling up and Regeneration Bill (see eg my 16 September 2023 blog post NN No).
One of the frustrations surrounding the neutrality veto has been with the approach of Natural England and local planning authorities, which have been disinclined to accept that, given that any adverse effect on the integrity of the relevant SAC or SPA only occurs when the homes are occupied, in appropriate circumstances planning permission can still lawfully be granted, and reserved matters applications and pre-commencement condition discharge applications approved, with a Grampian condition preventing occupation until a satisfactory solution is in place to ensure no adverse effect. Whilst it is said that this just kicks the can down the road – who will build if there is no certainty as to occupation? – in some circumstances it can assist, where for instance there will in any event be a long development lead time and the developer is prepared to take the risk that in due course a strategic solution will have been arrived at and implemented – and is prepared to contribute to the costs of that solution and generally seek to ensure that it is achieved.
So what is so interesting about the Storrington decision letter is that the appellant took this issue head-on. And the inspector accepted its approach. See paragraphs 67 to 109 of the decision letter. If your work involves neutrality issues, it’s worth reading them in their entirety.
The appellant’s position was that its scheme incorporated various measures to reduce the increased demand for mains water from the proposed development:
“76. In order to achieve water neutrality, the appellant proposes to mitigate the increased demand for mains water from the proposed development through a combination of on-site water reduction measures and an off-site offsetting scheme. In terms of on-site measures, it is proposed to install water efficient fixings, and greywater recycling and rainwater harvesting systems into each dwelling. It is common ground that these measures would reduce potable water consumption from the residential development to 8,129.07 litres per day, subject to suitable management and maintenance to ensure they are effective.
77. The signed and executed UU contains obligations requiring an On-Site Water Neutrality Scheme to be submitted to, and approved by, the LPAs and implemented prior to first occupation, which would include a regime for the management and maintenance of greywater recycling and rainwater harvesting systems by a management company. I am satisfied this would provide a legally binding mechanism for the LPAs to ensure the long term effectiveness of the measures to reduce potable water use to the required level within the proposed residential development. This position was confirmed by the Council’s witness in oral evidence at the Inquiry.”
Over and above these measures:
“79. The appellant seeks to rely on one of two alternative means of offsetting the residual water demand of the proposed development:
• payment of a fee or tariff into an LPA-led offsetting scheme for the Sussex North WRZ as a financial contribution towards an equivalent reduction in mains water demand elsewhere in the WRZ (the strategic offsetting scheme); or
• installation of a rainwater harvesting scheme at a garden centre in Horsham that would deliver an equivalent reduction in mains water use (the site specific offsetting scheme).
80. The strategic offsetting scheme is not yet in place, but how it would operate is explained in the Mitigation Strategy prepared for the Sussex North WRZ45. The first element of the Strategy is a programme being implemented by Southern Water to reduce water demand across the network by reducing leakages and household water consumption. This is expected to mitigate a large part of the increase in demand from committed and planned housing growth in the WRZ in the period 2021-2039.
81. The balance of the increased water demand is proposed to be mitigated through an LPA-led offsetting scheme, comprising a series of measures to reduce water demand in social housing and property under LPA control, which would be funded by a tariff on all new development per litre of mains water required to be offset. The most significant measure would be a programme for retrofitting flow regulators into existing social housing stock within the WRZ managed by local authorities or registered social landlords (RSLs), the effectiveness of which has already been demonstrated in trials.”
“83. On the question of prioritisation, the Mitigation Strategy recommends that priority should be given to sites allocated in local plans or identified in the associated housing trajectories, such as through the allowance for windfall, albeit not strategic-scale windfall49. In this case, around two-thirds of the proposed residential part of the appeal site is allocated for housing in the SSWNP. The housing proposed on the part of the site allocated for allotments would count as windfall provision, not at a strategic scale, for which an allowance is included in the housing trajectory for Horsham district from 2024/25 onwards50. If allowed therefore, the appeal site should be a candidate for priority of access to water neutrality via a payment to the offsetting scheme, given that it forms part of the planned and projected housing growth in Horsham district.
84. I recognise that the governing body for the strategic offsetting scheme is likely to have choices to make in terms of an order of priority for permissions to access the scheme, particularly early on in its operation. However, if the appeal proposals were allowed, the appellant confirmed that they would not need to rely on the strategic offsetting scheme for a period of 18 months from the grant of planning permission, whilst reserve matters were dealt with, the allotments relocated and site infrastructure laid. By that time (early 2025), the LPA-led offsetting scheme would have been operating for around 12 months and offsetting capacity from the SW programme is likely to be available to contribute to water neutrality in planned housing schemes. Furthermore, under the suggested standard time limit condition, the appellant would have up to 5 years from the grant of planning permission for the outline residential component of the proposed development to be implemented. By then (mid-2028), the strategic scheme would have been operating for over 4 years, with further offsetting capacity added to the scheme by both the LPA-led and Southern Water programmes.
85. Therefore, there is firm evidence that the proposed development would be able to access offsetting capacity within the strategic scheme to mitigate its residual water demand. However, case law establishes that in order for a competent authority to reach a conclusion under Regulation 63 of the Habitats Regulations that a project will not adversely affect the integrity of the European site, there must be no reasonable scientific doubt. In order to provide the necessary degree of certainty, the appellant has proposed a ‘Grampian’ condition and an obligation in the S106 UU, the effect of which would be to prevent implementation of the proposed development until a payment is made to HDC under the strategic offsetting scheme and water neutrality secured.”
The inspector noted that the threshold for imposition of a Grampian condition is simply that it would not be the case that there are “no prospects at all” of the action in question being performed within the time-limit imposed by the condition. “The Council’s evidence is that there is a very slim, 5%53 prospect of the appeal proposal being able to offset its water demand through the strategic scheme during the lifetime of any permission. A slim prospect does not amount to no prospect at all. Therefore, the condition would be reasonable in terms of the likelihood of access to the strategic offsetting scheme.”
The council was worried about the precedent effect but the inspector considered that each application needs to be determined on its own merits. “In this case, I have established above that a large part of the residential component of the appeal site is included in the planned housing growth in Horsham District, and the remainder would contribute to the windfall allowance in the housing trajectory, both of which the Mitigation Strategy recommends should be priorities for the strategic offsetting scheme. Accordingly, the condition would not be unreasonable on this count either.”
He considered that the measures set out in the section 106 unilateral undertaking would be workable in practice and met the requirements of Regulation 122 and of section 106 itself.
But what about Natural England’s objection?
“93. NE’s position with regard to the strategic offsetting scheme remains that whilst the mitigation strategy is evolving, decisions on planning applications should await its completion or demonstrate water neutrality by other means. Whilst the advice of NE as the expert national agency on this matter carries significant weight, case law establishes that, as the competent authority, I may lawfully depart from this advice, provided I have cogent reasons for doing so.”
After analysis he considered that he did.
The appeal was allowed. The relevant planning condition reads as follows:
“16. No development shall commence that results in an increased use of potable water when compared with the existing baseline water usage at the site until either:
(1) Water neutrality mitigation has been secured via the Council’s adopted Offsetting Scheme (in line with the recommendations of the Sussex North Water Neutrality Study: Part C – Mitigation Strategy, Final Report, December 2022) as set out in the Planning Obligation that accompanies this planning permission and this has been confirmed in writing by the Local Planning Authority; or
(2) The site specific Water Neutrality Mitigation Scheme set out in the Planning Obligation that accompanies this planning permission has been implemented in accordance with the requirements set out in the Planning Obligation and the Local Planning Authority has given its written confirmation of the same.”
Horsham District Council had applied for costs, partly on the basis that “the Appellant did not submit their full case on water neutrality with the appeals, delayed the provision of key information on their revised water neutrality strategy until 31 January 2023, and presented information on rainwater yield coefficients in an inaccurate and misleading way, leading Natural England and the Council to misinterpret the case, and the Council to incur unnecessary and wasted expense in terms of counsel’s advice and officer time redrafting its evidence.”
That costs application was refused.
This is a decision which will cause ripples but in my view is wholly in line with the regime set out in the Conservation of Habitats Regulations and potentially applicable to issues relating to, for instance, nutrient neutrality or recreational impact (eg Chiltern Beechwoods SAC).
B Side: Keep The Customer Satisfied
Phew, no politics in this blog post. After my midweek Drive Time post I was politely asked by a reader to keep politics out of my comments on planning. I think it was felt that simonicity had become simon15minicity. All reaction is good, and thank you for it, but the request is difficult, given that the whole of the planning system is a political construct and given that every legislative stub that we have to navigate around is the result of an often short-term political decision in the past. We arrive at a better planning system by seeking to ensure that those political decisions are as considered as they need to be. I also had push-back from a couple of people at my characterisation of the prime minister’s comments on 15 minute cities as “bizarre”. I would simply refer readers to the numerous fact-check pieces out there (see eg Full Fact). Whether wilful or in ignorance, I don’t think there really is an excuse for mixing up the 15 minute city concept (previously supported by the Government – see eg this 31 March 2023 statement) with traffic management measures in cities such as Oxford to ration use of road space and prioritise active travel. At the recent Oxford Joint Planning Law Conference, that hotbed of woke radicalism, Jonathan Porritt spoke of the dangers of each of us being a WeWeBe: a well-informed, well-intentioned, bystander. Let’s not be that. We can avoid that whilst maintaining party political neutrality. If people who know about something don’t say something, who will?
The neutrality concept needn’t mean that nothing at all can be done – or said.
The Levelling-up and Regeneration Bill resumed its progress through Report stage in the House of Lords this week, with sessions on 4 and 6 September. This post seeks to identify the main amendments made in those sessions.
I know what you’re all asking – what about the Government’s late proposed amendment to address the nutrient neutrality issue (see my 29 August 2023 blog post The Government’s Big Move On Nutrient Neutrality – Now We Have Seen The Government’s LURB Amendment)? That will be debated at a further session next week, on 13 September 2023. The proposed amendment was in the meantime the subject of an urgent question tabled in the House of Commons by the Green Party’s Caroline Lucas on 5 September 2023. The debate is interesting as a hint of what awaits both in the Lords on 13 September but then once the Bill returns to the Commons for its final stages:
The Speaker agreed that the urgent question was appropriate notwithstanding the Secretary’s written ministerial statement the previous day: “I expect Ministers to come to the House, as I did not think a written ministerial statement was the way to inform the House.”
On being challenged that the amendment amounted to a regression from current standards of environmental protection, the minister, Rachel Mclean responded: “It is important to consider what we are talking about here, which is unblocking 100,000 homes that add very little in terms of pollution. To be clear, our approach means that there will be no overall loss in environmental outcomes. Not only do the measures that we are taking address the very small amount of nutrient run-off from new housing, but at the same time, we are investing in the improvement of environmental outcomes. We do not agree that this is regression on environmental standards. We are taking direct action to continue to protect the environment and ensure that housing can be brought forward in areas where people need it.”
A nuanced question from shadow minister Matthew Pennycook:
“As a result of the Government’s failure over many years to make decisive progress in tackling the main sources of problem nutrients, namely farming and waste water treatment works, the requirements for nutrient neutrality in sensitive river catchments present a challenge to securing planning permission for new housing development. It is therefore right in Labour’s view that the operation of the rules around nutrient neutrality is reviewed with a view to addressing problematic delays and increasing the pace at which homes can be delivered in these areas.
However, we have serious concerns about the approach that the Government have decided on. Not only does it involve disapplying the Conservation of Habitats and Species Regulations 2017, but it does not legally secure the additional funding pledges to deliver nutrient management programmes and does not provide for a legal mechanism to ensure that housing developers contribute towards mitigation.
I put the following questions to the Minister: what advice did the Government receive from Natural England about potential reform of the laws around nutrient neutrality? Did it offer a view on the Government’s proposed approach? Given the amount of mitigation currently available in the pipeline, which is estimated at allowing for approximately 72,000 homes, did the Government consider an approach based on the habitat regulations assessment derogation and a revised credit mitigation system to front-load permissions and provide for future compensatory schemes? If so, why did they dismiss that option? What assessment have the Government made of the impact of their proposed approach on the nascent market in mitigation credits, and investor confidence in nature markets more generally? Why on earth do Ministers believe developers will voluntarily contribute to mitigation under the proposed approach?
Finally, the Government claim their approach will see 100,000 planning permissions expedited between now and 2030. Given that house building activity is falling sharply and the pipeline for future development is being squeezed—not least as a result of housing and planning policy decisions made by this Conservative Government—what assessment has the Department made of the number of permissions that its disruptive approach will unlock within the first 12 months of its operation?”
A rather pithy summation of the position, from the chair of the Levelling Up, Housing and Communities Committee, Clive Betts:
“This is hardly a new problem, is it? The Court decision was in 2018, yet last year we had the levelling-up Bill, which was really a planning Bill with a bit of levelling up added on—no mention of the issue there. In December we had major consultations on changes to the national planning policy framework—no mention of the issue there. The Committee wrote to the Minister and asked how many more consultations on planning issues there would be this year. We were given nine of them—no mention of the issue there. If it is such a serious issue, why has it taken the Government so long to act? It looks like the Government are making it up as they go along. This is a panicked response from the Government to the collapsing numbers of housing starts which the Minister simply wants to do something—anything—about.“
Turning now to the Report sessions on 4 and 6 September 2023 , I set out below the main amendments agreed upon (subject to them surviving the return of the Bill to the Commons). The full list of amendments is much longer and for the detail you can click on the following:
[Many thanks to my Town Legal colleague Amy Penrose for detailed work on all this].
Amendment 184A
This amendment clarifies that inserted subsection (5B) in section 38 of the Planning and Compulsory Purchase Act 2004 requires a determination under the planning Acts to be made in accordance with the development plan and any national development management policies, taken together.
So the replacement to section 38 (6) would now read: “the determination must be made in accordance with the development plan and any national development management policies taken together, unless material considerations strongly indicate otherwise”. What does “taken together“ add? Perhaps to avoid an interpretation that the determination needed to be both in accordance with the development plan and in accordance with any national development management policies – instead look at it all together in applying planning judgment as to whether the determination is in accordance? It’s great being a lawyer.
Amendment 190 (tabled by Baroness Thornhill) – voted through against the Government 186 – 180
The amendment requires the Secretary of State to carry out a sustainability appraisal before designating a national development management policy; it must comply with public consultation requirements and a process of parliamentary scrutiny based on processes set out in the Planning Act 2008 (as amended) for designating National Policy Statements, and it must contain explanations of the reasons for the policy, including an explanation of how the policy set out takes account of Government policy relating to the mitigation of, and adaptation to, climate change.
Amendment 191 (tabled by Lord Ravensdale) – voted through against the Government 182 – 172
The amendment places a duty on the Secretary of State and relevant planning authorities respectively to have special regard to the mitigation of, and adaptation to, climate change with respect to national policy, local plan-making and planning decisions.
Amendment 191A (tabled by Lord Crisp) – voted through against the Government 158 – 149
The amendment specifically places a duty on the Secretary of State to promote healthy homes and neighbourhoods – a huge success for the Town and Country Planning Association’s Campaign for Healthy Homes.
(see also a detailed Schedule to be inserted into the Bill setting out for instance what is meant by healthy homes principles – amendment 191B).
Amendment 193A (tabled by Lord Best) – voted through against the Government 173 – 156
The amendment requires local plans to “identify the local nature and scale of housing need in the local planning authority’s area and must make provision for sufficient social rent housing, to eliminate homelessness within a reasonable period as stipulated in the updated local plan, and to provide housing for persons registered on the local housing authority’s allocation scheme within the meaning of section 166A of the Housing Act 1996.” It would apply both “in relation to social housing provided both by the local housing authority where it retains its own housing stock and by private registered providers of social housing”. The information would need to be updated at least annually.
These are all significant interventions. Let’s see the approach that the Government takes back in the Commons. A motion will also be needed to carry over the Bill to the next Parliamentary session, without which we will see (wait for the LURB pun, wait for it, wait) .. LURB’s labours lost.
I wrote about the impending changes to the Building Regulations in my 7 January 2023 blog post, Tall Buildings & Fire Safety. At that point the Government was proposing various amendments including a threshold whereby residential buildings above 30 metres in height should be designed and built with two staircases. A “very short” transition period was proposed:
“59. The transition period will allow time for schemes to be completed but should not allow the opportunity for developments to get off the ground ahead of the new requirements coming into effect.
60. We would encourage all developments to prepare for this change now.”
Why 30 metres?
“30 metres is an accepted threshold for increased safety measures such as increased fire resistance provisions and marks a recognised trigger representing an increase in the level of risks in buildings overall. We therefore propose to introduce a new trigger in Approved Document B making provisions such that new residential buildings more than 30 metres are provided with a second staircase.”
The Government when publishing the consultation paper will have been aware that that the National Fire Chiefs Council had sought an 18 metres threshold – already the threshold in Scotland.
Now I don’t know whether 30 metres is the appropriate height – I’m told it is roughly equivalent to 10 storeys and that 18 metres is roughly equivalent to six or seven storeys – but that’s not the point of this blog post. Developers have amended their proposals to address what they understood to be the impending 30 metre requirement. Indeed they were specifically encouraged to by the consultation document! Of course there was no certainty pending the outcome of the consultation process but given the additional cost and consequent effect on viability of providing second staircases within buildings under 30 metres that was surely a reasonable stance to take.
“This long-term plan for housing therefore builds on our existing progress by:
Confirming the intention to mandate second staircases in new residential buildings above 18m, following confirmation from expert bodies that they support this threshold. This responds to the call from the sector for coherence and certainty. This is a considered and gradual evolution of safety standards, which, when taken with our other fire safety measures and reforms ensures the safety of people in all tall buildings – both new and existing. The government is clear that this new regulation cannot jeopardise the supply of homes by disrupting schemes that have been planned for years. DLUHC will work rapidly with industry and regulators over the summer to design transitional arrangements with the aim of securing the viability of projects which are already underway, avoiding delays where there are other more appropriate mitigations.”
And in his actual speech the statement that the Government is “providing much-desired clarity to builders that 18m will be the threshold that we will introduce for new buildings requiring second staircases. And of course there will be transitional arrangements in place to make sure that there is no disruption to housing supply.”
So a significant u-turn: 18 metres after all rather than 30 metres.
The big practical questions are:
What will the specific transitional provisions be so as not to “jeopardise the supply of homes by disrupting schemes that have been planned for years“?
Will we have any clarity before the amended Regulations are laid before Parliament?
When is the earliest that the amended Regulations will take effect?
Should this likely change directly affect decisions on planning applications in any event, given separate operation of the Building Regulations regime? To what extent should planners have to second-guess what may or may not be acceptable under the Building Regulations and the nature of any transitional arrangements? And is stronger guidance needed to encourage authorities to treat positively any subsequent applications to amend permissions if amendments are required to meet Building Regulations changes (and potentially to take into account any consequent impact on viability)?
Surely, if DLUHC were seeking to give “much-desired clarity to builders” and avoid “jeopardising the supply of homes“, the 24 July announcement would have been accompanied by a formal reasoned response to the consultation process and certainty that regardless of the detail of the transitional arrangements, the amended Regulations would definitely not catch, for instance, planning applications submitted before that announcement.
Instead, whenever any of us engaged with these issues bump into each other this summer, the topic of conversation – after holidays, the weather and the Government – will continue to be “have you heard anything as to the likely 18 m transitional arrangements?”
Double-digit inflation. Can’t take the train to the job, there’s a strike at the station.
Don’t push me cause I’m close to the edge.
I’m trying not to lose my head.
It’s like a jungle sometimes.
The House of Commons rose on Thursday 20 July 2023, and only then did we have a spate of DLUHC announcements from the following Monday onwards.
This blog post simply aims to keep track of it all. For the actual analysis, you will need to tune into two Clubhouse sessions (Clubhouse! It’s a bit like when people talk about “old-school hip hop” – nod appreciatively, high five, lockdown vibes, those were the days were they not?):
– 5 pm, 2 August – Gove’s “long-term plan” – RSVP here
I’ll be joined by my rock steady crew: Sam Stafford (HBF), the eponymous Catriona Riddell, Landmark’s summer signing Hashi Mohamed, Annie Gingell (Tetlow King), Claire Petricca-Riding and Nicola Gooch (Irwin Mitchell), my Town Legal partner Victoria McKeegan and also perhaps by you?
We’ll discuss:
Michael Gove’s “long-term plan for housing”speech and press statement (24 July 2023), preceded by the same day by Rishi Sunak’s “PM to build 1 million new homes over this Parliament” announcement
A consultation paper on (more) changes to permitted development rights (24 July 2023)
A consultation paper on the implementation of plan-making reforms proposed in the Levelling-up and Regeneration Bill (25 July 2023)
CG Fry v Secretary of State (Sir Ross Cranston, 30 June 2023) is a difficult case with a perhaps unsurprising answer, although one that is disappointing to many.
I’ve often written about the ongoing problems arising from Natural England’s advice that in certain areas, due to potential harm to Special Areas of Conservation and Special Protection Areas by way of nutrients (nitrates or phosphates), water abstraction pressures or recreational pressure, schemes should not be permitted to proceed without demonstrating (through the local planning authority carrying out “appropriate assessment” under the Conservation of Habitats Regulations 2017), that there will not be an adverse effect on the integrity of the relevant protected area. See for example my 18 March 2022 blog post New NE Nutrient Neutrality & Recreational Impact Restrictions (+ DEFRA Nature Recovery Green Paper).
The stage at which appropriate assessment is usually carried out is when an application for outline or full planning permission is being determined in circumstances where it is likely that the development will have a significant effect on an SPA or SAC. But one of the most frustrating aspects for developers about the introduction, usually without notice on the part of Natural England, of these controls is Natural England’s position, supported by the Government, that appropriate assessment is required even if planning permission has already been obtained and where what is being sought is reserved matters approval or discharge of a pre-commencement condition. I mentioned the problem in my 26 March 2022 blog post More On That Natural England Advice. As I said then:
“This of course cuts across the traditional planning law tenet that the planning permission stage is the point at which the principle of the development is determined to be acceptable, with subsequent approvals serving to define the detailed scale and disposition of development within the tramlines of what has been authorised by way of the permission. The authorities’ stance means that planning permission no longer gives any certainty as far as purchasers and funders are concerned and is a real impediment to market certainty and confidence. Who knows what equivalent restrictions lie ahead, after all? Even if your area is not affected at present, this should be of concern.”
I asked:
“Is anyone aware of this issue having been tested, on appeal or in litigation post 1 January 2021? Or is everyone being terribly British and waiting patiently for strategic solutions to be found to all of these neutrality issues before their reserved matters and pre-commencement conditions can be signed off? I suspect that some permissions will expire in the meantime. In my view this is not acceptable, or warranted, but am I a voice in the wilderness here?”
Well, the point now has been tested.
In CG Fry, outline planning permission had been granted for a residential development of 650 houses, community and commercial uses, a primary school and associated infrastructure. Reserved matters approval was secured. Natural England then published its advice to Somerset authorities on development in the Somerset Levels and Moors Ramsar Site, advising that greater scrutiny was required of plans and projects that would result in increased nutrient loads which may have an effect on SPAs, SACs and sites designated under the Ramsar Convention. CG Fry then sought to discharge various pre-commencement conditions but the Council withheld approval on the basis that an appropriate assessment was required before the conditions could be discharged. CG Fry appealed and the inspector dismissed the appeal. To quote from the judgment:
“He determined that it was legitimate to apply paragraph 181 of the NPPF to give the Ramsar site the same protection in all respects as a European site under the Habitats Regulations 2017. That was because the discharge of the conditions would be an authorising act, as part of the wider consent process, that would allow the realisation of potential effects on the Ramsar site which the Natural England advice note sought to manage. Considering the overarching nature of paragraph 181, this applied regardless of the specific subject matter of the conditions themselves: DL24-26. The Inspector considered that the grant of outline planning permission and reserved matters approval did not have an effect on the scope of any necessary appropriate assessment; the validity of the planning permission was not in question: DL41.
The inspector then determined that the requirement for an appropriate assessment in the Habitats Regulations 2017 applied to the discharge of conditions stage. He rejected the claimant’s argument that inclusion of specific provisions relating to the grant of planning permission, including outline planning permission, at regulation 70 of the Habitats Regulations 2017, did not diminish the applicability of regulation 63, which was simply a sweep up provision: DL44. Even adopting the claimant’s approach that the permission in relation to “consent, permission or other authorisation” in regulation 63 is the planning permission referred to in regulation 70, the concept of “other authorisation” was a broad one. The claimant’s approach would create loopholes counter to a purposive approach to the Habitats Regulations 2017: DL45-47.
As the competent authority, the Inspector said, he was unable to carry out the necessary appropriate assessment to agree the conditions: DL71. He said that he had considered the other relevant planning considerations, in particular the impact on housing delivery: DL72, 74. However, the unfulfilled requirement for an appropriate assessment was an issue of material significance: DL77. In other words he conducted the balancing exercise and concluded that in this case the delay in housing delivery was outweighed by the need to protect the Ramsar site.”
“The claimant’s case in general terms is that the effect of additional phosphate loading resulting from its proposed development was not a material consideration to the determination of the conditions at issue in the case. It was legally irrelevant because it fell outside the specific parameters of what the outline planning permission and the reserved matters approval had left over for consideration under these conditions. The material for the discharge of these conditions was satisfactory, and the only thing preventing their discharge was whether an appropriate assessment of the impact of phase 3 of the development on the Ramsar site from additional phosphate loading was required. There was no nexus between the conditions in relation to phosphates, even with the condition relating to waste water. Nor, on the claimant’s case, does the combination the Habitats Regulations 2017 and paragraph 181 of NPPF change that. The Inspector was wrong in his analysis and conclusions.”
“In broad terms ground 1 is firstly, that the Inspector wrongly construed the Habitats Regulations 2017 and should not have applied regulation 63, as he did, to the discharge of conditions on a reserved matters approval. Mr Banner KC contended that regulation 70 was the relevant provision, and it is confined to planning (including outline planning) permission.”
The judge rejected the ground: “While on a strict reading of the Habitats Regulations 2017 the assessment provisions of regulation 63 do not cover the discharge of conditions, in my view they do apply as a result of firstly, article 6(3) of the Habitats Directive, secondly, a purposive interpretation of their provisions and thirdly, case law binding on me”
“ Mr Banner contended that the Habitats Directive had no status in the UK legal system, except through regulation 9(3) of the Habitats Regulations 2017. The provisions of the European Union (Withdrawal) Act 2018 do not take the argument any further, he submitted, because there is no CJEU pre-existing case law which interprets the Habitats Directive as imposing a requirement to conduct an appropriate assessment at subsequent stages, such as the discharge of conditions on a reserved matters approval. He submitted that Harris concerned whether the claimed obligation under article 6(2) had been recognised by the court before Brexit, and it had. By contrast there is no CJEU or domestic case preceding exit day which supports the view that article 6(3) of the Habitats Directive can be relied upon to impose a requirement for an appropriate assessment at the discharge of conditions stage. Unlike Harris section 4(2)(b) of the Withdrawal Act 2018 is not engaged in this case given the absence of relevant pre-exit case-law.
In my view article 6(3) of the Habitats Directive continues to have effect in domestic law as a result of section 4(2)(b). Johnson J explained in Harris that the requirements of article 6(3) were accepted as binding by the CJEU in Waddenzee: [90]. Articles 6(2) and 6(3) of the Habitats Directive are closely related, so as to be “of a kind” with one another for the purposes of section 4: [91]. The demands of section 4(2)(b) are therefore met. The section is explicit that the recognition in the case law does not have to be by way of the ratio of a case “(whether or not as an essential part of the decision in the case)“.
“Consequently, the requirements of article 6(3) of the Habitats Directive remain part of UK law. That article requires that the competent authorities should not agree a project until an appropriate assessment has been undertaken and it shows that it will not adversely affect the integrity of a site. A planning consent is part of agreeing a project when it is necessary to implement a development. In this case the discharge of pre-commencement conditions was a necessary step in the implementation of the development. An appropriate assessment had not been undertaken up to that point, so consequently the Inspector determined that he could not discharge the conditions prior to one being undertaken. His conclusion was consistent with article 6(3) of the Habitats Directive.”
“Secondly, the Habitats Regulations 2017 demand a purposive interpretation so that the appropriate assessment provisions of regulation 63 apply to a subsequent consent stage including reserved matters applications and the discharge of conditions. A broad and purposive interpretation of the regulations flows from the strict precautionary approach which the CJEU has adopted to the assessment provisions of the Habitats Directive…”
“In my view Wingfield and Swire are authority for the proposition that an appropriate assessment can apply at the reserved matters or discharge of condition stage even if there has been a grant of outline planning permission where the subsequent approval is the implementing decision. There is support, as Lang J found in Wingfield, in the case law concerning the EIA multi-stage consenting procedure such as Barker. There, as we saw, Lord Hope recognised that a material change in circumstances could require an assessment at the reserved matters stage. It will be recalled that in Friends of the Irish Environment Ltd the CJEU stated that the meaning of “development consent” was relevant to defining the equivalent term “agree” in the Habitats Directive. All this is retained case law under the Withdrawal Act 2018 concerning the interpretation of the Habitats Directive and the Habitats Regulations 2017. That the facts in Wingfield and Swire were different is no basis for undermining the principle they established. The common law system would not survive if this were the case, since there will always be a variation, even if slight, in the facts of later cases. That does not preclude the continued application of principle.”
“The upshot is that the Habitats Directive and Habitats Regulations 2017 mandate that an appropriate assessment be undertaken before a project is consented. That is irrespective of whatever stage the process has reached according to UK planning law. The basal fact in this case is that neither at the permission, reserved matters, or conditions discharge stage has there has been an appropriate assessment. Application of the Habitats Directive and a purposive approach to the interpretation of the Habitats Regulations 2017 require the application of the assessment provisions to the discharge of conditions. The strict precautionary approach required would be undermined if they were limited to the initial – the permission – stage of a multi-stage process.”
Ground 2: “For the claimant Mr Banner contended that paragraph 181 of the NPPF did not enable the Inspector to take into account considerations which were legally irrelevant to those conditions.” [Paragraph 181 states that Ramsar sites should be given the same protection as SPAs and SACs].
The judge: “The impacts on the Somerset Levels and Moors Ramsar Site and paragraph 181 of the NPPF cannot be said to be irrelevant considerations in this development. The issue is the read-across of the Habitats Regulations 2017 to Ramsar sites as provided by the NPPF in circumstances where the Council’s shadow appropriate assessment shows that if the project if permitted it will cause harm to the Ramsar site.”
Ground 3: “Mr Banner submitted that even if regulation 63 applies to the discharge of conditions, it ought to be interpreted in such a way that the scope of the appropriate assessment reflects the scope of the conditions being considered. Thus, for example, in the context of an application to discharge a condition relating to root protection zones for trees, an appropriate assessment would concern any effects on site integrity arising from the range of choices the decision-maker has in relation to root protection zones, given the permission granted (and any conditions already discharged). The appropriate assessment would not consider the effects of the scheme as a whole on the habitat in question.”
The judge: “Regulation 63 requires an appropriate assessment to consider the implications of the project, not the implications of the part of the project to which the consent relates. […] As Mr Wilcox for the Council put it, the thing which is to be the subject of the appropriate assessment is the thing which will be permitted by the authorisation, so that where the decision is the final stage in granting authorisation for a development, it is the development which is to be assessed.”
It was a certainly an issue to be tested and, whilst Richard Moules and Nick Grant (for the Government) and Luke Wilcox (for Somerset Council) may have been on the winning side, well done to Charlie Banner KC and Ashley Bowes for arguing it (and to CG Fry for being prepared to put its head above the parapet). I hope Charlie won’t mind me quoting his subsequent LinkedIn post in its entirety:
“Judgment in CG Fry has been delivered this morning . Key headlines:
1) The Court agreed with the Claimant that on a natural and ordinary reading of the Habitats Regulations they do not require appropriate assessment at the reserved matters or discharge of conditions stages
2) However, CJEU case law to the effect that the EIA Directive’s requirements apply at the reserved matters stage was to be read across to the Habitats context and to discharge of non-RM conditions, as well as first instance domestic case-law upholding the legality of a *voluntary* AA at reserved matters stage.
3) This is an EU “obligation… identified by a court” pre-Brexit which is preserved by the EU Withdrawal Act 2018 ss4&6, because the direct effect of Article 6(3) of the Habitats Directive had been recognised by the CJEU pre-Brexit.
4) Therefore the Habitats Directive continues to apply directly and overcomes the natural and ordinary meaning of the Regulations.
The judge has indicated he is minded to grant permission to appeal his judgment and the parties are discussing the potential for a leapfrog appeal to the Supreme Court.
The judgment will present Department for Levelling Up, Housing and Communities with some challenges for any future legislative solution for the nutrients issue given the Court’s approach to considering whether s4 of the Withdrawal Act preserves post-Brexit the force of EU “obligations… of a kind recognised by a court “ pre Brexit. The Claimant said that this meant the Courts had to have recognised an obligation for AA at discharge of conditions stage, which they hadn’t. The judgment suggests that the relevant obligation is article 6(3) generally. The potential effect of this is that it will be open to anyone to apply to court to set aside legislation on the basis it is contrary to article 6(3) *even if based upon an interpretation of article 6(3) that hasn’t previously been made by the Courts*
The Home Builders Federation’s evidence to court was that 44,000 already consented homes in England are currently blocked because of this issue. The Land Promoters and Developers Federation has also been very active on this issue.
Watch this space!”
A final couple of wry comments from me:
If anyone voted for Brexit thinking that these sorts of problems would become a thing of the past, more fool them.
Let’s not forget that the root of much of the issues over neutrality – whether in relation to nutrients and water abstraction – is the appalling lack of investment on the part of the privatised water companies.
As the judge says at the beginning of his judgment: “In broad terms, this issue relates to the phosphate loading of protected water habitats, leading to eutrophication. This is caused by reasons including agricultural practices and under-investment in water infrastructure. There is a risk of the problem being exacerbated by water generated by new developments which contain phosphates, principally from foul water. The Home Builders Federation states that, due to the unavailability of mitigation options, this issue is holding up the building of no fewer than 44,000 homes in England which already have planning permission.” (my emboldening)
Until the CG Fry judgment landed this morning, I had been intending to pull together some wider thoughts on the implications for planning and the environment of the poor state of our privatised water industry, provoked by articles such as UK government looks at nationalising Thames Water as crisis deepens (FT, 28 June 2023) where delayed housebuilding, aka providing people with homes, is just part of the collateral damage.
Hey let’s get Joan Armatrading on the Walkman. We’re going back – way back…
The Levelling-up and Regeneration Bill had its first reading in the House of Commons over a year ago on 11 May 2022. It’s not just intervening political chaos which has caused this slow-moving caravan of disparate policy notions to lurch from side to side with occasional abrupt halts Along the way additional bright notions have been loaded onto it, impeding progress still further.
One of those notions is the old chestnut of community land auctions. Clauses 127 to 137 were added to the Bill in November 2022 without prior consultation, once Michael Gove became Secretary of State, so as to allow community land auctions to be piloted for ten years.
CLAs are of course catnip to many political types and economists, for instance supported by Policy Exchange (see eg Alex Morton’s 2013 paper A Right To Build) and the YIMBY Alliance, as part of the wider thinking on land value capture (see eg my 20 May 2017 blog post Money For Nothing? CPO Compensation Reform, Land Value Capture). My conclusion remains that the introduction of community land auctions would inevitably be harmful to the principled operation of the planning system – it’s just too darned complicated – and to the delivery of development in the right places – for instance it introduces a huge conflict of interest for the local planning authority as between whether to plan for the best places or the best returns. In my view primary legislation to allow for a pilot is premature. If there are excess unearned gains for the state (in addition to what is already extracted via the planning system), why not just openly tax them rather than embark on this three cup trick?
“A “community land auction arrangement” means an arrangement provided for in CLA regulations under which—
(a) a local planning authority is to invite anyone who has a freehold or leasehold interest in land in the authority’s area to offer to grant a CLA option over the land, with a view to the land being allocated for development in the next local plan for the authority’s area,
(b) any CLA option granted under the arrangement ceases to have effect if the land subject to the option is not so allocated when that plan is adopted or approved (unless the option has already been exercised or been withdrawn or otherwise ceased to have effect), and
(c) the local planning authority may—
(i) exercise the CLA option and dispose of the interest in the land to a person who proposes to develop the land,
(ii) exercise the CLA option with a view to developing the land itself, or
(iii) dispose of the CLA option to a person who proposes to exercise it and then develop the land.”
Clause 128: “Power to permit community land auction arrangements
(1) This section applies where—
(a) the Secretary of State directs that a local planning authority which is to prepare a local plan may put in place a community land auction arrangement in relation to that plan,
(b) the local planning authority resolves to do so (and that resolution has not been rescinded), and
(c) the community land auction arrangement has not come to an end.
(2) The local plan may only allocate land in the authority’s area for development—
(a) if the land is subject to a CLA option or a CLA option has already been exercised in relation to it, or
(b) in circumstances which are prescribed by CLA regulations.
(3) Any financial benefit that the local planning authority has derived, or will or could derive, from a CLA option may be taken into account—
(a) in deciding whether to allocate land which is subject to the option, or in relation to which the option has been exercised, for development in the local plan;
(b) in deciding whether the local plan is sound in an examination under Part 2 of PCPA 2004.
(4) CLA regulations may make provision about how, or to what extent, any financial benefit may be taken into account under subsection (3) (including provision about how any financial benefit is to be weighed against any other considerations which may be relevant to whether the land should be allocated for development in the local plan or to whether the plan is sound).”
Receipts are to be used to support development in an area by funding infrastructure and paying for the administration of the community land auctions process.
The provisions were debated in House of Lords Committee on 18 May 2023 (the relevant part of the debate starts from amendment 364B) and it might put some flesh on the bones to see how a Government minister, Earl Howe, explains how it is all intended to work:
“Community land auctions are an innovative process of identifying land for allocation for development in a local planning authority’s area in a way that seeks to optimise land value capture. Their aim is to introduce transparency and certainty by allowing local planning authorities to know the exact price at which a landowner is willing to sell their land. The crux of our approach is to encourage landowners to compete against each other to secure allocation of their land for development in the local plan by granting a legally binding option over their land to the local planning authority.
The competitive nature of community land auction arrangements incentivises landowners to reveal the true price at which they would willingly part with their land. If the land is allocated in the local plan upon its adoption, the local planning authority can sell the CLA option, keeping the amount that the successful bidder has paid and capturing the value that has accrued to the land as a result of the allocation. The successful bidder must then pay the price set out by the original landowner in the option agreement to purchase the land. The detailed design of community land auction arrangements will be set out in regulations that will be subject to the affirmative procedure.”
“…sustainable development remains at the heart of our approach. Piloting authorities will decide which land to allocate in their emerging local plans by considering a range of factors, which the Government will set out in guidance. Unlike conventional local plans, when allocating sites, local planning authorities will be able to consider the financial benefits that they are likely to accrue from each site. How, and the extent to which, financial benefits may be taken into account will be determined in regulations. Importantly, the existing requirement to prepare local plans, with the objective of contributing to the achievement of sustainable development under Section 39 of the Planning and Compulsory Purchase Act 2004, will remain.
We are not altering the existing local plan consultation and examination process. Piloting authorities will still be required to consult on the proposed land allocations in their draft local plans, before they are submitted and independently examined in public in accordance with the local plan preparation procedures, as modified by Schedule 7 to the Bill.
… the Secretary of State is required to lay a report before each House of Parliament on the effectiveness of the pilot within the timeframe set out in Clause 134(2). There is a requirement to publish this report, which means that it will be publicly accessible and available to any combined authority that was involved in the pilot.
The noble Baroness, Lady Taylor, asked about whether there had been prior consultations. We will consult on community land auctions shortly, and taking part in the pilot will be voluntary for local authorities. We need the powers in the Bill to enable the pilot to happen.
I appreciate the thought behind my noble friend’s Amendment 366. However, as community land auctions are a new and innovative process for identifying land for allocation for development, our view is that it is right that the Bill makes provision for them to be piloted on a strictly time-limited basis.
If community land auction arrangements are deemed successful, and if there is ambition to extend the approach, further primary legislation would be required to implement them on a permanent basis. As we do not have the evidence about their effectiveness yet, we think it right that the Bill does not include provisions that could make CLAs a permanent fixture. Instead, the Government will take a decision at the relevant point in the future, based on the evidence.”
“The simplest way I can describe this is that community land auctions will be a process of price discovery. In the current system, local planning authorities have to make assumptions about the premium required by a reasonable landowner to release their land for development. For Section 106 agreements, this manifests itself through viability negotiations between the local planning authority and a developer. As these can be negotiated, there is a higher risk that, in effect, higher land prices lead to reduced developer contributions, rather than contributions being fully priced by developers into the amount that they pay for land.
For the community infrastructure levy and the proposed infrastructure levy, a levy rate is set for all development within certain parameters. When setting rates, the local planning authority has to calculate how much value uplift will occur on average, and has to make assumptions about landowner premiums and set a levy rate on that basis. The actual premium required by individual landowners will not be available to local planning authorities and will vary depending on individual circumstances. If the local planning authority makes an inaccurate assumption about landowner premiums, they may either make a lot of sites unviable by setting too high a levy rate, or else they will collect much less than they might have done otherwise by setting too low a levy rate.
Under the CLA process, landowners bid to have their land selected for allocation in an emerging local plan, as I have described, by stating the price at which they would willingly sell their land to the LPA for development. The offer from the landowner, once an option agreement is in place with the LPA, becomes legally binding. The LPA can either exercise it themselves, thereby purchasing the land, or auction it to developers. The competitive nature of CLAs incentivises landowners to reveal the true price at which they would willingly part with their land. If they choose to offer a higher price, they risk another piece of land being allocated for development, in which case they will not secure any value uplift at all.”
But if you’re regularly involved in local plan making and/or the promotion of land for development, obvious points arise, none of which are addressed in the above – or anywhere as far as I can see:
the nature, terms and timing of these “options”. They would need to be investment-grade binding commitments on the owner (or owners – many potential allocations are a patchwork of interests knotted together by land promoters) and the owner’s successors in title, with all those with relevant interests (eg mortgagees, tenants) having consented, legally binding for a very long period of time, until drawdown which would be way past local plan adoption, with no get out if any owner changes its plans.
The above means heavy-duty conveyancing input on the part of the owner but also on the part of the local authority, all within the necessary local plan preparation window. Given the number of sites proposed in any local authority’s “call for sites” this is a truly massive amount of work to be resourced by the authority, even with terms as standardised as possible.
The proposed option price by the land owner is going to be influenced by whether best values are to be achieved (1) blind via this route, (2) by in some way bringing forward a scheme outside the process (if this is ruled out the system is utter nationalisation and state control of development – if that’s what you voted for, fine, but I suspect it’s not) or (3), as has happened with other forms of development land tax, by just waiting it out for a less restrictive regime.
Say two pieces of land are put forward as alternative locations for the expansion of a town, one less sustainable than the other (eg it may be greenfield rather than brownfield, remote from public transport connections). The owner of the less sustainable site may offer to make its land available for a lower price. To what extent can or should the authority take into account the additional monies to be extracted from on-sale of the less sustainable site in deciding which to allocate? My early years as a planning lawyer were in the out of town supermarket wars, where the common situation was the local authority seeking to promote a supermarket on its own, worse, site in opposition to better proposals by others, for obvious reasons that at the time of course had to remain unspoken because having regard to the authority’s potential financial returns was obviously verboten. Just think how this would play out under what is proposed – and with much of the decision making inevitably taking place behind closed doors due to inevitable commercial confidentiality.
How is commercial and mixed used development to be approached and dealt with in valuation terms? Is this how we are going to allocate land for major logistics or industry? It’s a cookie cutter approach as presented: housing, housing, housing.
The local authority is envisaged to be the ring master and banker of the whole processes. Whilst this may be welcome in some ways, capacity building would be required on a huge scale.
In any event, the current system already minimises land values, and will increasingly do that if relatively recent changes to the viability process are allowed to bed down. Every time development comes forward with less affordable housing than required by policy, that is because the authority, or inspector on appeal, has been satisfied, on the basis of valuation advice, that no more affordable housing could be extracted and the scheme still proceed, based on an appraisal that doesn’t feed in the price the developer may actually have paid for the land but, usually, just existing use value with a premium set at the minimum that the valuers agree would have been necessary to persuade the owner to sell. I would like to see an explanation of why the option price offered by a land owner would be likely to be lower than EUV+.
Oh and there’s nothing “community” about it.
That’s just the outcome 15 minutes’ thought at the kitchen table on a Saturday morning with Joan Armatrading on in the background.
Some people seem to think that the planning system can be used as a sandbox for trying out these over-complicated, theoretical constructs. I set out my brief thoughts on the infrastructure levy last week and see also the “no hope value” thinking. We’re barking up the wrong tree folks. Drop the pilot. We don’t have the time. Get the existing system to work, now, with more resources and less complexity, better guidance and – perish the thought – some political consistency. Use the local plans system for planning and the tax system for taxation rather than creating something which sounds more like a complicated board game. In my humble opinion.
Simon Ricketts, 19 May 2023
Personal views, et cetera
The phrase to “drop the pilot” means to abandon a trustworthy adviser. This 1890 Punch cartoon depicts the dismissal of Otto von Bismarck from the Chancellorship of the German Empire by Wilhelm II.
Brave timing, with local elections this week, but it is helpful finally to see some detail today as to Labour’s proposed approach to planning reform in today’s Times piece, Starmer’s growth plan is built on houses (The Times, 1 May 2023 – behind paywall):
“Labour will pledge to restore housebuilding targets and hand more power to local authorities; promise 70 per cent home ownership and hundreds of thousands of new council homes. Given the resistance of so many local authorities to development, that may sound like a contradiction in terms. But I’m told a Starmer government would wield both carrot and stick: councils would be made to work together to come up with plans for development at a regional level, spreading a burden few want to shoulder individually, with cash and infrastructure as the prize for new housing. (Bafflingly, they are under no obligation to work together now.) If proposed developments meet the standards set out in those local plans, they will be approved. So no longer would each town hall have to agree to what one senior Labour source calls “shitty speculative developments” to meet targets arbitrarily imposed upon them. But nor will they be allowed to opt out of building either.
Starmer’s government would also look anew at the green belt, swathes of which — including a petrol station in Tottenham Hale, north London — are neither green nor pleasant. Those sites would be liberated. Not all politics is local, however. We can also expect to hear more about national projects, driven from the centre too: intensive development on the 50-mile Oxford-Cambridge Arc and a generation of new towns are all under discussion as Starmer’s aides work up plans to be announced at Labour conference in September.”
Obviously, more detail is needed and some policy nuances are lost in this summary – for instance:
We still do have targets, it’s just that they will become even more of an advisory starting point than at present.
We still have the duty to cooperate, indeed it seems from a Planning Resource story this week it seems that there may even be a re-think as to its replacement, in relation to housing numbers as opposed to infrastructure and nature strategies, by some vague alignment approach.
But, really, contrast even this thumbnail sketch of Labour thinking with new housing and planning minister’s Rachel Mcclean’s rather defensive and dare I say it unimpressive appearance before Select Committee this week. Much unsubstantiated assertion, much “we’ll come back to you on that”. NB Advice to any politician, never question Lichfields’ research – you won’t win!
Turn away if you feel uncomfortable about use of the B word, but…
I was as unconvinced by her explaining away the current wave of local planning authorities which have paused local plan production as I was later in the week during her appearance on BBC’s Question Time when she became animated in response to someone who asserted that Brexit was one of the causes for this country’s current poor economic performance.
Recognise the issues, own them!
On reflection, perhaps Labour’s unveiling of its approach to housing and planning has come at precisely the right time (although I won’t let that party off the hook on Brexit either…)
The Secretary of State’s 6 April 2023 decision to refuse planning permission for Berkeley Homes’ proposed development of 165 new dwellings in Cranbrook, Kent (a decision in fact taken by planning minister Rachel Mclean on behalf of the Secretary of State) = a head on collision for sure.
Tunbridge Wells Borough Council had resolved to approve the scheme but Natural England, concerned as to the prospect of harm to the High Weald Area of Outstanding Natural Beauty, secured its call in by the Secretary of State.
The council has slightly less than five years’ housing land supply. The scheme included 40% affordable housing: 50/50 rented and shared ownership.
To cut a long story short (read the decision letter and inspector’s report), the Secretary of State disagreed with the inspector’s recommendation that planning permission be granted.
On the main issues:
⁃ AONB: “Overall the Secretary of State agrees with the Inspector at IR823 that there would be some harm to the HWAONB, which would be limited, and that the harm to the landscape and scenic beauty of the HWAONB attracts great weight.”
Tucked within his conclusions on AONB this turns out to be a crucial passage in the decision:
“The Secretary of State recognises that both the HWAONB Management Plan and the High Weald Housing Design Guide emphasise that housing development in the HWAONB should be landscape-led. Whilst he agrees with the Inspector that the proposed development would deliver landscape enhancements (IR826), he does not find the proposal to be of a high standard which has evolved through thoughtful regard to its context (IR723). Overall, he does not find that the scheme is sensitively designed having regard to its setting. He finds that the design of the proposal does not reflect the expectations of the High Weald Housing Design Guide, being of a generic suburban nature which does not reproduce the constituent elements of local settlements. He also considers that the layout of the scheme does not respond to its AONB setting. Rather than being a benefit of the scheme, as suggested by the Inspector, the Secretary of State considers that the design of the scheme is a neutral factor in the context of paragraphs 176 and 177 of the Framework and the planning balance.”
Not “sensitively designed”? “… of a generic suburban nature”? It’s worth looking at the scheme drawings, design and access statement etc on the council’s planning portal. I would disagree. More fundamentally, there is something very odd about a minister (and civil servants) arriving at a conclusion like this, in the face of the elected local planning authority and hands on consideration, site visits and so on conducted at that stage and in the face of the conclusions reached by an inspector after many inquiry days and a site visit. And in the face of Government assertions that it still wants to see 300,000 homes built annually. Frankly why bother with all that if this is the outcome?
⁃ Air quality: “…there would be very limited harm to air quality, and he affords this very limited weight in the planning balance.”
⁃ Site allocation strategy: Whilst he agreed with the inspector that the local plan policies should be treated as out of date because of the lack of five years’ housing supply, because the shortfall was slight he disagreed with the Inspector’s assessment that both the policies and the conflict with them carry limited weight.
⁃ Historic environment: “For the reasons given at IR767-774 the Secretary of State agrees with the Inspector at IR773 that the proposed development would not harm any significant historic landscape resource and all of the individual features which could be of potential interest would be retained.”
⁃ Sustainable transport: “For the reasons given at IR790-793 the Secretary of State agrees with the Inspector that the development would promote sustainable transport in the terms of the Framework and accord with relevant development plan policy in that regard (IR794).”
Turning to the benefits of the scheme:
⁃ Housing delivery: “For the reasons given at IR763-764 the Secretary of State agrees with the Inspector that there is a clear need for both market and affordable housing in the Borough and that the proposed development would make a significant contribution to the delivery of both (IR764).”
⁃ Biodiversity: “…the proposed development would secure significant BNG such that it would accord with the Framework, including paras 174, 179 and 180 and development plan policy, as well as the eLP, in this regard (IR747).
⁃ Other benefits: “The Secretary of State agrees for the reasons given at IR774, IR720 and IR811 that the proposed reinstatement of hedgerows along historic boundaries and of the shaw in the southern fields would be beneficial to the time-depth character of the HWAONB (IR774). Furthermore, the proposed re-creation of Tanner’s Lane would also be beneficial in heritage terms as it would reinstate a historic feature in the local landscape (IR774). The Secretary of State agrees for the reasons given at IR720 and IR811 that the new woodland planting and management of existing woodland would be to the benefit of the environment and landscape. He further agrees for the reasons given at IR786 that the proposed highway works may result in improving highway safety. In addition, for the reasons given at IR811 the additional footpaths and substantial new publicly accessible amenity space would enhance recreational opportunities.”
Overall conclusion on benefits:
“The Secretary of State has had regard to the Inspector’s view at IR824 as to weight attaching to the benefits of the scheme, and notwithstanding his conclusion at paragraph 36 below that there is not a ‘very compelling case’ for the need for development of this type and in Cranbrook, overall he agrees that the combined weight of the benefits is substantial. However, he does not agree with the Inspector’s characterisation at IR826 that it constitutes ‘a package of exceptional benefits’.”
So “the combined weight of the benefits is substantial”….
Application of policies in the NPPF relating to development in the AONB:
⁃ Great weight should be given to conserving and enhancing landscape and scenic beauty in AONBs – conclusion that limited harm but that harm should be given great weight.
⁃ Planning permission for major development in the AONB should be refused unless there are exceptional circumstances justifying the development, and where it can be demonstrated that the development is in the public interest – no exceptional circumstances, not in the public interest.
Overall conclusions:
“Weighing in favour of the development are the need for and delivery of housing, the Biodiversity Net Gain, enhanced recreation opportunities, improvements in highway safety, heritage benefits to the historic landscape and landscape benefits by way of woodland planting and management, which collectively carry substantial weight.
Weighing against the proposal is the harm to the landscape and the scenic beauty of the HWAONB which attracts great weight. There is further harm by way of conflict with the spatial strategy which attracts moderate weight, harm to air quality which is afforded very limited weight and harm to the plan making process through prematurity which is afforded very limited weight.
The Secretary of State has concluded for the reasons given above that exceptional circumstances do not exist to justify the proposed development in the AONB and that the development would not be in the public interest. Therefore, paragraph 177 of the Framework provides a clear reason for refusing the development proposed and as such under paragraph 11(d)(i) of the Framework the presumption in favour of sustainable development is no longer engaged.
Overall, the Secretary of State’s conclusion on section 38(6) of the Planning and Compulsory Purchase Act 2004 is that the conflict with the development plan and the material considerations in this case indicate that permission should be refused.”
The decision appears to have been the final straw for housebuilders, already riled by the overtly anti-housebuilding theme of the proposed amendments to the NPPF (final version soon to emerge). See for example Builders lambast Michael Gove after he blocks plan for ‘generic’ homes in Kent (The Times, 15 April 2023 – behind paywall).
There were no costs applications in this decision but I do note that costs applications and awards appear to becoming more frequent. Often of course these are in favour of appellants where the case against grant of planning permission simply has not been made out by the relevant local planning authority (particularly where the decision to refuse was against officers’ recommendations) – e.g for one example amongst many this decision letter dated 20 April 2023, plus accompanying costs decision letter in relation to a student housing scheme in Bath.
But it’s not just appellants who achieve costs awards. Did people see this recent costs decision letter where Mid Suffolk District Council achieved a full award of costs against the appellant, arising from flooding and access issues which led the inspector to conclude that the appeal had no reasonable prospect of success? Proceed with caution.
By way of reminder (ok gratuitous plug), if you sign up to our free Town Library appeal decisions service you get a list each week of the most recent major planning appeal decisions (namely all those arising from inquiries as opposed to hearings or the written representations process) with links to the decision letters themselves.
Oh finally, another mind blowing decision: the Government continuing to press on with the proposed Infrastructure Levy. Truly a terrible proposal. You may have logged on to our recent clubhouse discussion (hopefully soon to emerge as a 50 Shades of Planning podcast), ahead of the 9 June deadline for responses to the Government’s current technical consultation. If there is anyone out there who can articulate why IL would be an improvement over the current system I would love to hear from you.
DLUHC published a consultation paper on 13 April 2023 setting out its proposal to create a new use class, “C5 Short Term Let“, to cover short term lets, and on related proposals to introduce new permitted development rights. So there will be a distinction between use classes C3 and C5. The Government will at the same time introduce permitted development rights into the General Permitted Development Order to allow changes from C3 to C5 and vice versa without the need for planning permission, unless the relevant local planning authority disapplies one or both of the permitted development rights by way of an article 4 direction.
It is vital that all those engaged in relevant businesses understand what is proposed, for instance serviced apartment operators; Airbnb type businesses and individual hosts, and build to rent businesses where there is a short-term letting element. There are opportunities, but also risks.
The tl:dr appears to be that in principle any flat or house in England (outside London) would be able to be used for Airbnb style short-term accommodation up to 365 days a year without the need for planning permission unless the local planning authority makes, with the necessary justification, an article 4 direction.
But it is all a bit confusing! At least, a number of us at Town Legal have been scratching our heads. Thanks incidentally to my colleague Aline Hyde for much work on this today – and for some of the text which follows.
I think some of the confusion is down to the way that the proposal is trying to be all things to all people. The press statement is headed:
“New holiday let rules to protect local people and support tourism
New proposals will introduce a requirement for planning permissions for short term lets in tourist hot spots”
It explains:
“The government has listened to calls from local people in tourist hotspots that they are priced out of homes to rent or to buy and need housing that is more affordable so they can continue to work and live in the place they call home. The proposed planning changes would support sustainable communities, supporting local people and businesses and local services.
The proposed planning changes would see a planning use class created for short term lets not used as a sole or main home, alongside new permitted development rights, which will mean planning permission is not needed in areas where local authorities choose not to use these planning controls.
Both of these measures are focussed on short term lets, and therefore the planning changes and the register will not impact on hotels, hostels or B&Bs.”
On the face of it then, the Government is both seeking to regulate use of residential properties as short-term, Airbnb type accommodation but also to liberalise the use of residential properties for that purpose. Hmm.
First word of warning: this is not just about “tourist hot spots”. Subject to the ability for local authorities to make article 4 directions (more below), the proposals cover the whole of England.
Second word of warning: can we first be clear as to what exactly is a “short term let”? The consultation paper states:
“The term “short term let” can encompass a range of activity associated with a dwelling. Some short term lets may be let out for a limited period while the owner themselves go on holiday. Others may be properties that provide for a series of lets for holidays etc or very short term overnight sleeping accommodation including renting an individual bedroom while the owners are in situ.“
So DLUHC envisages the term as covering situations:
where a property is let for a limited period whilst the owner is away
where the owner remains in situ and rents out an individual bedroom on a short-term basis (NB not longer term lodgers are excluded) or
where a property provides for a series of lets to holidaymakers.
However, its proposed wording for the new “short term let” C5 is as follows:
“Use of a dwellinghouse that is not a sole or main residence for temporary sleeping accommodation for the purpose of holiday, leisure, recreation, business or other travel.”
Nothing about short-term lets beyond the title itself. Nothing about the letting out of individual bedrooms on a short-term basis whilst the owner remains in residence , which appears to be unrestricted by the proposals. And why list those purposes except perhaps so that the list excludes reference to asylum…?
The anachronistic word “dwellinghouse” beloved of planning lawyers can confuse as well. It just means “dwelling” and so includes flats as well as houses.
How will it be determined whether a property falls within use class C5? The consultation document explains that at the time of commencement of the proposed secondary legislation, properties used for this purpose will automatically fall within use class C5 and that there will therefore be no need to apply for planning permission, though of course an application for a lawful development certificate may be advisable if there is any uncertainty. Thereafter, where there is no article 4 direction disapplying the permitted development right to switch between C3 and C5, the Government intends to require that the local planning authority is notified by the developer when a change of use occurs, but it does not propose that there be a requirement to seek prior approval. There will be no site size limits and no constraint-based exclusions.
DLUHC suggests that, where there is a local problem with the number of short term lets, one or both of these permitted development rights could be removed by way of an Article 4 direction. It is clearly anticipated that most areas will wish to retain the right allowing for change of use from short term let to dwellinghouse, even if they remove the opposing right. The consultation confirms that the policy tests for making an Article 4 direction, to be found within paragraph 53 of the NPPF, will not be amended and so an authority hoping to make one will need to be based on robust evidence and apply to the smallest geographical area possible.
Properties which fall within use class C5 will benefit from the permitted development rights which currently apply to the curtilage of a dwellinghouse such as rear and upward extensions, alterations to the roof, porches and outbuildings.
Another proposal the subject of consultation is for a limit on the number of nights for which a property within use class C3 and is a sole or main dwellinghouse may be let without there being a material change of use. DLUHC tells us it is open to suggestions as to how many nights this should be, but it will apparently only consider numbers divisible by 30 – listing 30, 60 and 90 as potential options. Two legal mechanisms for achieving this are proposed: the first is to create a new permitted development right allowing for the use of the C3 dwellinghouse for temporary sleeping accommodation for a fixed number of nights per year, the benefit of this being that the right could be removed by Article 4 direction. The second and alternative means is by incorporating the limitation on the number of nights into the wording of use class C3 itself.
DLUHC appears to be trying to be helpful by proposing a specific number of nights for which a property may be let, within which it says a material change of use will not have occurred. There is an obvious attraction to giving homeowners certainty that they may do this without planning consequence. Trying to achieve it in this way, however, reveals what must be a basic misunderstanding as to the law relating to material change of use. Supposing that the Government eventually settles on a limit of 30 days: it is not necessarily the case that the use of a dwellinghouse for short term let for, say 31 or 35 (or any other number of) days, will result in a material change of use. A change of use is only development if it is material, and materiality is assessed with reference to a range of factors which are often site- or proposal-specific. To make the use of a dwellinghouse as a short term let for 31 or 35 days a material change of use, would need specific legislative provision, absent which subjective judgments will remain determinative.
This has already been done in respect of properties in London, which can already be let for up to 90 days per year. Beyond 90 days, an application for permission to make a material change of use is required and the consultation confirms that this provision will be unaffected by the changes proposed within this consultation. One infers that DLUHC haven’t simply mirrored this approach across the country so that individual local planning authorities may elect to remove the permitted development right to let a main residence for the limited number of nights if they consider it necessary to do so.
Of course, the ability to use a dwellinghouse as a short term let is subject to the planning conditions and obligations which affect the site, and might be separately restricted, for example by way of covenants in a lease. Whether the changes proposed in the consultation affect the operation of existing planning conditions or obligations may depend on their specific wording.
So, stepping back for a moment, how is all this really going to work? So much is going to come down to the extent to which local planning authorities introduce article 4 directions removing the proposed permitted development right to go from C3 to C5 and indeed the Government intervenes (as it has in the past ) to restrict the scope of directions which it considers to be too wide or unjustified.
If there is no article 4 direction in an area, C3 properties will be able to be used for C5 short term let use without the need for planning permission – liberalising the current position where more than ancillary short-term accommodation use (more than 90 days of that use in London – a restriction which would remain) would amount to a material change of use. In such areas, use of properties in Airbnb type use could be maximised.
The onus is going to be on local planning authorities to do the work and justify appropriate article 4 directions.
There is a separate but related consultation currently underway on a registration scheme for short term lets, led by the Department for Culture, Media and Sport. Having conducted a recent call for evidence, it considers that a registration scheme is necessary to enable local authorities to effectively police the limit on the number of nights.
I wrote a blog post Time To Review The “C” Use Classes? back on 1 July 2016. It is obvious that a more comprehensive review is needed than what is currently proposed.
SIMONICITY 