London Calling: Mayoral Interventions

Sadiq Khan is now 10 months into his role. How has he been using his Mayor of London Order 2008 powers to intervene in relation to strategic planning applications? The number one priority in his manifesto was, after all, to:
tackle the housing crisis, building thousands more homes for Londoners each year, setting an ambitious target of 50 per cent of new homes being genuinely affordable, and getting a better deal for renters.”


The consultation draft of the new London Plan is expected in August 2017, although we already have his draft affordable housing and viability SPG with its 35% affordable housing threshold approach (below which viability appraisal justification is required), covered in my 1.12.16 blog post. Ahead of the anticipated adopted version, a couple of items in the 14 March 2017 report to the London Assembly’s Planning Committee are of background interest:

– from page 9 a transcript of a discussion held on 1 February 2017 with James Murray, Jamie Ratcliff and private sector representatives in relation to the draft SPG

– from page 51 the Committee’s proposed response to the draft SPG.

Given that the Mayor’s intervention powers under the 2008 Order (to direct refusal of an application or call it in for his own determination) are the most direct levers that he can pull in relation to specific development proposals, it is perhaps surprising that so far we have not seen them used as much as under the last days of the Johnson regime.
This is how it stands as at 18 March 2017:
Flamingo Park, Bromley
Khan’s first intervention was in fact to direct refusal on 15 June 2016 of the Flamingo Park scheme in Bromley of a Green Belt scheme for a new stadium for Cray Wanderers FC along with 28 flats. (One for pub quizzes: Cray Wanderers claim to be the oldest football club in London – and second oldest in the world!). 
The London Borough of Bromley was minded to grant planning permission, but the Mayor considered that the ‘very special circumstances’ test for inappropriate development in the Green Belt had not been met. He added:
“Whilst writing I would take this opportunity to express my concern as to the lack of affordable housing and the effect the excess parking provision will have on the highway network in the vicinity of the site.”
Unusually, the Secretary of State promptly intervened and called in the application before the refusal was issued. The Mayor was preparing to defend the refusal direction but the applicant Cray Wanderers announced yesterday (17 March 2017) that it has withdrawn the application following legal advice and discussions with the Mayor and Bromley Council. It will resubmit a new application “in the next four to six weeks”. 
It will be interesting to see the extent to which the new scheme sees any increased housing component and the approach taken to affordable housing. 

Plough Lane, Merton

Khan’s next intervention also related to a proposed football stadium – this time Galliard Homes proposal for a new 20,000 seat football stadium for AFC Wimbledon and 602 residential units, on the Wimbledon Greyhound Stadium site, next to the site, now redeveloped for housing, of the old Wimbledon FC stadium in Plough Lane (Wimbledon FC now having of course having emigrated to Milton Keynes as MK Dons). (I hope you’re following this – I rather wish I had included Wimbledon and Cray Wanderers in my 7.1.17 blog post Level Playing Fields: Football Stadia & Planning).
The proposals included 9.6% affordable housing (all intermediate, shared ownership) with a review mechanism. The application was called in by previous Mayor Boris Johnson on 26 March 2016 (against GLA officers’ advice), but in an unusual twist, Mayor Sadiq Khan released it back to Merton on 19 August 2016 for Merton to approve. I had previously doubted (and possibly still do) whether it is lawful for a Mayor to release back an application which has previously been called in – there is certainly no express power to do so – but the Mayor’s reports set out the legal justification that he relies on. 
Bishopsgate Goodsyard, Hackney

There is one further Johnson hangover, the application for the mixed use redevelopment of Bishopsgate Goodsyard (including 1,356 residential units) which was called in by him on 23 September 2016 at the request of the applicant. Despite having been called in presumably with the intention of approving it, or at least reaching a determination more speedily than if it had been left with the London Borough of Hackney as local planning authority, the application then hit the buffers when a GLA officers’ report was published on 8 April 2016, recommending that he refuse it at the representation hearing arranged for 18 April 2016. The applicant decided to defer the hearing to address the issues and there it rests. The next twist is anyone’s guess. Will Khan even have to reach any decision or will we see withdrawal and resubmission?

We now come to two much more recent decisions, both on 10 March 2017. The Mayor’s draft SPG was obviously referred to in both cases and affordable housing review mechanisms imposed in both cases, with a cap of 50% – which is the borough-wide requirement applicable in both cases (albeit Haringey’s emerging local plan appears to be proposing a lower 40% borough wide target). 
Hale Wharf, Haringey
Haringey members had resolved, against officers’ recommendations, to refuse planning permission for this 505 residential unit scheme, within the Upper Lee Valley Opportunity Area and the Tottenham Housing Zone, on no fewer than eleven grounds. The Mayor called it in on 4 January 2017 and approved it on 10 March 2017 as recommended in his officers’ stage 3 report.
The position secured on affordable housing was as follows:
a minimum of 177 units (35% of overall units) to be affordable, with 20% affordable rent and 80% shared ownership by habitable room. 

Details of affordability will be secured. Review mechanisms as follows will secure the delivery of more affordable housing (up to 50% of the scheme or the level of grant funding) should it be viable: 
- 

Review mechanism (1): In the event that the development has not been substantially implemented within 2 years of the date of the decision, an updated viability assessment shall be submitted in order to establish if additional affordable housing can be provided and any such additional affordable housing shall be provided on site; 
- 

Review mechanism (2): A viability assessment shall be submitted prior to substantial completion of Phase 1 in order to establish if additional affordable housing can be provided and any such additional housing shall be provided on site; 
- 

Review mechanism (3): A viability assessment shall be submitted prior to substantial completion of Phase 3, to establish whether there is any surplus from the completed scheme which can be contributed towards off-site provision of affordable housing. 
- 

Review mechanism (4): Further review if development stalls for a period of more than 24 months.
It’s worth noting that there was already significant GLA funding being given for infrastructure for the scheme before the application was called in but the Mayor’s involvement appears to have secured £7.75m worth of affordable housing funding to a registered provider, so the review mechanism will be aimed at recovery and recycling of that grant funding.
Palmerston Road, Harrow

Harrow members resolved, again against their officers’ recommendations, to refuse an application by Origin Housing for a mixed use development within the Harrow and Wealdstone Opportunity Area and the Heart of Harrow Housing Zone to provide 187 residential units, within 5 buildings of between 1 and 17 storeys. Again, on 10 March 2017 the Mayor accepted the recommendations in his officers’ stage 3 report.
The affordable housing position secured is as follows: 
– a minimum of 74 homes (40% of overall units) on the site to be provided as affordable homes, with 30% affordable rent and 70% shared ownership (40% was proposed in the original application but the tenure mix is different);

– a viability review mechanism will secure the delivery of more affordable housing (up to a level of 50% of the scheme) should it be viable. 

 The affordable housing is with grant based on the Mayor’s Affordable Housing Programme 2016-21, with an early review mechanism if enabling works are not substantially commenced within two years. 

Conclusions

Of course the Mayor has to be selective as to how to use his powers. After all, the legal limits are clear from R (Spitalfields Historic Trust) v Mayor of London (Gilbart J, 10 May 2016), where Mayor Johnson’s use of the Mayoral call in power was tested and just about survived. However, so far, perhaps true to the man – and maybe no bad thing – we have seen a more cautious approach from Sadiq Khan:

– one direction of refusal where, who knows, a compromise may be on the cards

– one previously called in application returned to the borough to determine

– two applications called in and approved, but both schemes offering more than 35% affordable housing, with a review mechanism potentially to get to 50% – both schemes in opportunity areas and London housing zones where officers’ recommendations to approve had been overturned.

Administrations usually become more interventionist over time. I headed this piece London Calling, but with Mayor Khan we certainly haven’t yet seen The Clash. 
Simon Ricketts 18.3.17
Personal views, et cetera

 

 

 

Definitely Maybe: Defining Affordable Housing

Affordable housing is defined in the NPPF as follows:
The Government carried out a consultation  in December 2015, proposing that the definition be expanded so as to include

– low cost ownership models, which “would include products that are analogous to low cost market housing or intermediate rent, such as discount market sales or innovative rent to buy housing”
– starter homes (of which more later). 

Two further changes were proposed in the February 2017 response to consultation:  
* introduction of a household income eligibility cap of £80,000 (£90,000 for London) on starter homes. 

* introduction of affordable private rented housing

The Government is accordingly consulting until 2 May 2017 on the following replacement definition for the NPPF (long isn’t it?):


Starter homes

There were howls of anguish at the starter homes initiative as first unveiled by the Government, the key elements of which were (as set out in chapter 1 of the Housing and Planning Act 2016 and March 2016 technical consultation):
– a legal requirement that 20% of new homes in developments should be starter homes, ie
– to be sold at a discount of at least 20% to open market value to first time buyers aged under 40. 

– Price cap of £250,000 (£450,000 in London)

– The restriction should last for a defined number of years, the first suggestion being five years, replaced with the concept of a tapered restriction to potentially eight years

– Commuted sums in lieu of on site provision for specified categories of development, eg build to rent

The obvious consequence would have been a significant reduction in the potential for schemes to include a meaningful proportion of traditional forms of affordable housing. 
After all of last year’s battles over the Bill, it is now plain from the Government’s response to the technical consultation, that the starter home concept is now much watered down:
– There will be no statutory requirement on local planning authorities to secure starter homes, just a policy requirement in the NPPF, which is to be amended accordingly. 

– Rather than requiring that 20% of new homes be starter homes, the requirement will be that 10% of new homes will be “affordable housing home ownership products” so could include shared equity or indeed low cost home ownership. 

– maximum eligible household income of £80,000 a year or less (or £90,000 a year or less in Greater London 

– 15 year restriction

– No cash buyers, evidence of mortgage of at least 25% loan to value

– It will only be applicable to schemes of ten units or more (or on sites of more than 0.5h). 

There will be a transitional period of 18 months (to August 2018) rather than the initially intended 6 to 12 months. 
Whilst we now have a more workable arrangement, plainly all that Parliamentary work was a complete waste of time. There was no need for chapter 1 of the 2016 Act – the current proposals can be delivered without any need for legislation. 
We will need to see the degree to which LPAs embrace the starter homes concept in reviewing their local plans. We will also need to be wary that we may lose the only benefit of a national standardised approach, ie the hope that there might be a standard set of section 106 clauses defining the operation of the mechanism (which will not be straightforward – see my 21.6.16 blog post Valuing Starter Homes). 
Affordable Private Rent
One of the documents accompanying the Housing White Paper was a consultation paper: Planning and affordable housing for build to rent.
The term Affordable Private Rent is now used for what we have all previously been calling Discounted Market Rent. Changes to the NPPF are proposed (subject to consultation) advising LPAs to consider asking for Affordable Private Rent in place of other forms of affordable housing in Build to Rent schemes, comprising a minimum of 20% of the homes in the development, at a minimum of 20% discount to local market rent (excluding use of comparables within the scheme itself), provided in perpetuity. The Affordable Private Rent housing would be tenure blind and representative of the development in terms of numbers of bedrooms. Eligible income bands are to be negotiated between developer and LPA. Developers will be able to offer alternative approaches where appropriate (eg greater discount, fewer discounted homes – or different tenures). “Build to Rent” will be defined and it is acknowledged that developers should be able to cease to operate the property as Build To Rent subject to payment of a commuted sum reflecting the affordable housing requirement that would otherwise have been applicable. 
There is also recognition in the consultation paper that factors in London may be different, allowing for an amended response and recognition of Mayor of London’s November 2016 affordable housing and viability draft SPG.
There will be a transitional period of 6 months from the time that the NPPF changes are made. The possibility is held out of model section 106 clauses, which would help minimise unnecessary delays. 

The recognition that Build to Rent is a model that doesn’t sit well with ‘ownership’ forms of affordable housing is what that industry (largely self-defining through scale of scheme and extent of professional management) has been lobbying for. Nor is there any more any reference to off-site starter home provision.
Wider implications
The extensions to the meaning of ‘affordable housing’ are all in the direction of private sector provision. The definition is now very wide indeed. Battles lie ahead once LPAs consider the implications of the changes for their local plan affordable housing requirements against a backdrop of, for example:
– reduced levels of socially rented housing over the last six years or so following the introduction of affordable rent (minimum discount of at least 20% to market rent), vividly demonstrated in the Government’s affordable housing statistics published on 2 March 2017:

– restrictions on housing benefit, for instance ineligibility of 18-21 year olds from 1 April 2017 under the Universal Credit (Housing Costs Element for claimants aged 18 to 21) (Amendment) Regulations 2017  made on 2 March 2017. 
– the continuing, onerous, requirement on registered providers since 2015 to reduce rents by 1% a year for four years resulting in a 12% reduction in average rents by 2020-21. 
– Loss of stock via the Housing and Planning Act 2016’s voluntary right to buy scheme in relation to registered providers and the Act’s provisions requiring local authorities to sell vacant higher value housing (the Government’s most recent statistics on sales date from October 2016 but already show significant numbers). 
A debate took place in the House of Lords this week, on 2 March 2017, on the Economic Affairs Committee’s July 2016 report, Building More Homes  in the context of the Housing White Paper. Lord Young closed for the Government saying many of the right things but, after such a background of continuing changes (I believe it was Adam Challis at JLL who recently counted 180 housing initiatives since 2010), with further uncertainty for at least 18 months, surely we now just need to get on with the matter in hand – ensuring that there are enough homes to meet all social needs, whilst not killing the golden goose without which this will simply not happen under any foreseeable system, ie profitable development by the private sector.
Simon Ricketts 4.3.17
Personal views, et cetera

Completion Notices: More Pointy, Still Pointless?

Completion notices have always been a blunt tool, little used by local planning authorities. The Housing White Paper proposes sharpening them, but to what end?
If we blow the dust off a bit we can remind ourselves that the current completion notice procedure in sections 94 and 95 of the Town and Country Planning Act 1990 is as follows:
– Development must have been begun within the time limit on the planning permission and that time limit must have now expired. 

– If the LPA considers that the development “will not be completed within a reasonable period” they can serve a completion notice stating that the planning permission will cease to have effect after a period specified in the notice which must be at least 12 months. 

– Any notice is only effective if confirmed by the Secretary of State, who may extend the 12 months’ period. Any person served with a completion notice who objects within a time limit set out on the notice (must be at least 28 days) has a right to a hearing before the Secretary of State before he reaches his decision.

– If the notice takes effect, the planning permission becomes invalid at the end of the specified period, but this does not affect any development carried out under the permission before the end of the period. 

The procedure is very seldom used, for various reasons:
– It doesn’t do what it says on the tin. It does not secure completion of the development. If development has stalled, the developer is already having pretty fundamental problems. The threat of a completion notice is not going to lead to a developer finding significant amount of money to overcome those problems – indeed it could jeopardise a solution being found if funders are spooked.  

– Instead, use of the procedure is likely to lead to an uncompleted development – it should perhaps be called an uncompletion notice. Furthermore, the courts have resisted to date any notion that if, by the end of the specified completion deadline, only part of a building has been built, the part built is in any way no longer unauthorised (Cardiff County Council v National Assembly for Wales, Davis J, 22 June 2006 – in that case, an unsightly part-built garage, which the Council sought unsuccessfully to enforce against after the deadline in the completion notice). 

– The test as to whether the development “will be completed within a reasonable period” is too vague, particularly in relation to major projects. What is it to be judged against?

– The need for approval by the Secretary of State adds to the potential for delay and uncertainty. 

So what is the Government now proposing? As part of its collection of “Holding Developers And Local Authorities To Account” measures, the white paper contains the following:
“2.42 We want to ensure local planning authorities have more effective tools to deal with circumstances where planning permission has been granted but no substantive progress has been made. We propose to simplify and speed up the completion notice process, whereby if development on a site has stopped and there is no prospect of completion, the local authorities can withdraw planning permission for the remainder of the site. This would make it easier for local authorities to serve a completion notice, helping to stimulate building or clear unused permissions from their planned supply of land. “

Views are sought by 2 May on two proposals:

“A.107 The Government proposes to amend legislation to remove the requirement for the Secretary of State to confirm a completion notice before it can take effect. Local authorities know their circumstances best, and removing central government involvement will help shorten the process, and give authorities greater control and certainty. The opportunity for a hearing will be retained where there are objections. 

A.108 We also intend to amend legislation, subject to consultation, to allow a local authority to serve a completion notice on a site before the commencement deadline has elapsed, but only where works have begun. This change could dissuade developers from making a token start on site purely to keep the permission alive. However, it is important that this would not impact on the willingness of lenders to invest.”

These proposals are hardly radical. The Government published a report on completion notices back in July 2001, that it had commissioned from Cardiff University and Buchanan Partnership, no longer on the web as far as I know, which back then made these recommendations (to which it appears the Government never responded):
* Greater thought should be given to tailoring the time period in the standard condition relating to the commencement of development to fit the situation. In particular, the period could be reduced to two years for minor development.
* The Government’s advice, then in Circular 11/95, against including a condition requiring that the whole of an approved development be completed should be reviewed.

* No justification for referral to the Secretary of State, and this should be replaced by a right of appeal.

* Better publicity for the system could lead to its greater use.

The first recommendation in the white paper echoes the 2001 report and is hardly controversial. There should be no reason to require confirmation by the Secretary of State if objections to the notice haven’t been received. 
The second recommendation is more worrying, when looked at in conjunction with the separate proposals in the white paper, that:
– the applicant should “provide information about their estimated ‘start date’ (month/year when a substantive start would take place) and ‘build out rate’ (the number of homes built per financial year) for all proposals for or including housing development
– developers should “provide local authorities with basic information (in terms of actual and projected build out) on progress in delivering the permitted number of homes, after planning permission has been granted”

– large housebuilders should be required to publish “aggregate information on build out rates”

Owners and developers are normally vigilant to keep planning permissions alive by carrying out a material operation prior to the implementation deadline on the permission, reflecting the frequent reality that detailed architectural and engineering work post-permission, as well as the funding structure to underpin a development, often including necessary pre-lets in the case of commercial floorspace, take longer than the deadline for implementation (in relation to which the default period is now proposed to be reduced to two years). Missing the deadline means going down a very long snake to submit a fresh application for planning permission. 
The white paper proposal envisages that an LPA could serve a completion notice at any time after the developer has carried out a material operation, even before the implementation deadline has expired. What would there be to prevent an LPA serving completion notices as a matter of routine where development appears to be slower than was previously indicated, or than housebuilder averages? The white paper itself questions whether this would “impact on the willingness of lenders to invest”. The answer is that it surely would as there would be no certainty for a lender that if the borrower developer defaults on its loan the lender will have time to step in and secure the completion of the development under the same permission – or work through another solution with the borrower. The underpinning certainty of the permission is lost. Two years to implement a permission is no period at all and if relatively minor works within that period may not suffice to keep the permission alive, banks will undoubtedly want to consider the risk profile vis a vis particular authorities very carefully. 
Why not look at more constructive opportunities with the information to be provided about actual or projected build out rates? For example:
– Remember the section 106BC procedure? Revised section 106 arrangements alleviating affordable housing requirements ceased to apply to those parts of the development that had not been completed within three years. That sort of structure could be considered by LPAs in section 106 agreements where justified.

– Any viability review mechanism could be expressed as only operable if specified amounts of development had not been achieved by defined milestones.

– Encourage LPAs to tie any funding they control, eg use of CIL monies for the benefit of the scheme, to timely build out progress.

So much can be achieved by planning obligations and conditions, instead of spending time working out how to hack at the problem with what is hardly the sharpest tool in the box.


Simon Ricketts 25.2.17

Personal views, et cetera

Five Problems With Neighbourhood Plans

The real effects of neighbourhood plan making on housing delivery and on the efficient, democratic operation of the planning system are hard to pin down and yet the Government continues to champion its role. Are we really heading in the right direction? After all, despite the positivity of government sponsored initiatives such as mycommunity.org.uk  it isn’t all sweetness and light. Here is my personal worry list:
1. Neighbourhood Plans are usurping the role of local plans, whilst being subject to a lighter-touch examination process
The Court of Appeal, in R (DLA Delivery Ltd) v Lewes District Council  (10 February 2017), has now confirmed that a neighbourhood plan may be made without there being an up to date local plan. Until such time as the local plan comes forward, as the only up to date development plan, the neighbourhood plan’s policies will benefit from the statutory presumption in section 38(6) of the Planning and Compulsory Purchase Act 2004 and from paragraph 198 of the NPPF: “[where] a planning application conflicts with a neighbourhood plan that has been brought into force, planning permission should not normally be granted”.
This gives neighbourhood plans a role which was surely not foreseen by Parliament. Neighbourhood plans are intended to be in general conformity with the local plan’s strategic policies. But instead any policy vacuum can be filled by the neighbourhood plan’s own strategic policies. Whilst the Planning Practice Guidance urges collaborative working between neighbourhoods and local planning authorities, this does not prevent problems from arising which are exacerbated by two further factors:
–  in order to survive the ‘relatively limited‘ (Court of Appeal in DLA Delivery, para 5) examination process, neighbourhood plans only have to satisfy the ‘basic conditions’ set out in the paragraph 8(2) of Schedule 4B to the Town and Country Planning Act 1990 as applied to neighbourhood plans by section 38A of the Planning and Compulsory Purchase Act 2004, rather than the wider and more rigorous soundness test applicable to local plans. 
–  the Neighbourhood Planning Bill proposes to accelerate the process, by deeming post-examination pre-referendum neighbourhood plans to be a material consideration in the determination of planning applications (clause 1) and by deeming post-referendum neighbourhood plans to be treated as part of the statutory development plan ahead of formally being made by the district or borough council (clause 2). It will be easier for the Secretary of State to dismiss appeals on the basis of inconsistency with emerging neighbourhood plans (a sensitive subject for DCLG given for example Holgate J’s quashing in Woodcock Holdings Limited v Secretary of State, 1 May 2015 and a series of examples of the Secretary of State having consented to judgment in similar circumstances). 
2. The Neighbourhood Plan process is “complex and burdensome”
Not my words but a description given by participants, according to recent research by the University of Reading: Neighbourhood Planning Users Research Revisited.  
Any community embarking on a neighbourhood plan has to be ready for the long haul. Because policies within the plan can have real consequences for communities and developers alike, it is no surprise that the process can be litigious. 
R (Crownhall Estates Limited) v Chichester District Council  (Holgate J, 21 January 2016) was the third (third!) judicial review in relation to the Loxwood Neighbourhood Plan, with the claimant developer seeking unsuccessfully to challenge the plan’s provision for only 60 homes against a background of a failure of the district council to meet its obejectively assessed housing needs. 

I do not believe that there is a transcript of Dove J’s rejection in Swan Quay LLP v Swale Borough Council on 31 January 2017 of a challenge to the Faversham Creek Neighbourhood Plan which contained a policy preventing redevelopment of the claimant’s property on the basis that it would lead to ‘gentrification’. The ruling is summarised by the Faversham Creek Trust in a press release.  
Challenges commonly focus on whether there has been compliance with the requirements of the Strategic Environmental Assessment Directive, another unsuccessful ground of challenge in DLA Delivery. R (Stonegate Homes Limited) v Horsham District Council (the late, missed, Patterson J, 13 October 2016) was an example of a successful challenge on this basis. The Haddenham Neighbourhood Plan is another, where Aylesbury Vale District Council consented to judgment.
3. Neighbourhood Plans dissipate the local planning authority’s resources

Parish councils such as Haddenham are unlikely to have the resources to resist a legal challenge, leaving the responsibility to the local planning authority which, under the legislation, formally “makes” the plan. How much say will they have over the way in which the defence case is brought and, as importantly, why should the local planning authority’s resources be stretched in this way?

We also have of course dissipation of CIL proceeds, with 15% of CIL proceeds available to be spent by parish councils, increased to 25% where a neighbourhood plan is in place – proceeds that would otherwise have applied towards infrastructure projects required to deliver development. 
4. Neighbourhood Plans are unnecessary and marginalise the role of the local planning authority

District and borough councils are designed to operate down to ward level. We elect ward councillors to represent our local interests – that is to say, the things we care about in relation to our home environment, our neighbourhood. Local plans can and do include policies at neighbourhood level. Additionally, there is scope for area action plans to provide more detailed site-specific policies where justified. 

We should all engage more with local plan making. Does the distraction of neighbourhood planning fuel the inaccurate sense that what happens at district or borough level is remote and not to do with us? What if the energy that one sometimes sees expended on neighbourhood planning were to be properly harnessed at local planning authority level, with proper access to officers and with consistency of plan making over a strategically sensible area?
5. Neighbourhood Plans are not fit for the further roles that Government continues to give them
Neighbourhood planning is of course voluntary. It is more prevalent in affluent areas and its heartland is in the south east (Turley research, 2014). In unparished areas it is the preserve of unelected groups. And yet the Government intends it to play a grown up role alongside local plans. Indeed, given that they have statutory force, unlike the NPPF, have neighbourhood plans in fact become more important than the Government’s own planning policies?
Gavin Barwell’s 12 December 2016 written ministerial statement (see my blog post That Ministerial Statement) set out that relevant policies for the supply of housing in a neighbourhood plan that is part of the development plan should not be deemed to be ‘out-of-date’ under paragraph 49 of the National Planning Policy Framework where the following circumstances arise at the time a planning decision is made: 
* the written ministerial statement making the policy change on 12 December 2016 is less than 2 years old, or the neighbourhood plan has been part of the development plan for 2 years or less;

* the neighbourhood plan allocates sites for housing; and

* the local planning authority can demonstrate a three-year supply of deliverable housing sites. 

The statement is of course the subject of a judicial review. In the meantime, the Government’s Housing White Paper has added the further qualification that neighbourhoods should be able to demonstrate that their site allocations and housing supply policies will meet their share of local housing need and that the local planning authority should be able to demonstrate through the White Paper’s housing delivery test that, from 2020, delivery has been over 65% (25% in 2018; 45% in 2019) for the wider authority area (to ensure that delivery rates across the area as a whole are at a satisfactory level). 
 The White Paper also proposes changes to the NPPF to “highlight the opportunities that neighbourhood plans present for identifying and allocating small sites that are suitable for housing, drawing on the knowledge of local communities”.

Finally, local planning authorities will now be “expected to provide neighbourhood planning groups with a housing requirement figure, where this is needed to allow progress with neighbourhood planning. As part of the consultation on a new standard methodology for assessing housing requirements, we will seek views on whether a standard methodology could be developed for calculating housing need in a neighbourhood plan area“.
Let us remember that these are voluntary plans, prepared by parish councils and community groups. Are we not seeing, yet again, a relentless move towards process and complexity, in an effort to make running repairs to a mechanism that was not designed for this function? 
Simon Ricketts 19.2.17
Personal views, et cetera

From The White Paper Mountain, What Do We See?

After so long we have reached the top of the mountain: the white paper and accompanying documents have all been published today, 7 February 2017. However, now we see a series of further peaks on the horizon. 
A good way into the white paper itself, Fixing Our Broken Housing Market, is to start at the back end. From page 72 you have the detailed proposals listed, including a series of proposed changes to the NPPF and other policies which are now the subject of a consultation process from today until 2 May 2017. The consultation focuses on a series of 38 questions but some of the questions are potentially very wide-ranging. Further consultation is proposed on various matters, including 
– housing requirements of older people and the disabled

– Increasing local authorities’ flexibility to dispose of land at less than best consideration and related powers

– Potentially increasing fees for planning appeals (up to a maximum of £2,000 for the largest schemes, recoverable if the appeal is allowed)

– Changes to section 106 processes (with further consideration being given to dispute resolution “in the context of longer term reform”)

– Requiring housebuilders to provide aggregate information on build-out rates and, for large-scale sites, as to the relevance of the applicant’s track record of delivering similar schemes

– Encouragement of use of CPO powers to support the build out of stalled sites. 

There is a supplementary consultation paper on planning and affordable housing for build to rent  containing a further 26 questions, with a consultation deadline of 1 May 2017.
There are responses to previous consultation papers and reports:
– Summary of responses to the technical consultation on implementation of planning changes, consultation on upward extensions and Rural Planning Review Call for Evidence  (including a u-turn on the previous idea of an upwards extensions permitted development right in London, now to be addressed by policy). 
– Government response to the Communities and Local Government Select Committee inquiry into the report of the Local Plans Expert Group 
There is plenty to get to grips with, for example:
– the housing delivery test and new methodology for assessing objectively assessed need

– an understandable focus on whether the applicant will proceed to build out any permission and at what rate, although with a worrying reduction of the default time limit for permissions from three to two years

– Homes and Communities Agency to become “Homes England”. 

It is also reassuring to see the Government applying real focus to build to rent, reducing its emphasis on starter homes – and also reducing its reliance on permitted development rights. 

However, it is surprising how much still remains unresolved. We will apparently have a revised NPPF “later this year” but for much else the start date looks to be April 2018, for example a widened affordable housing definition including watered-down starter homes proposals (no longer a statutory requirement and with reference to a policy target of a minimum of 10% “affordable housing ownership units” rather than the requirement of 20% starter homes previously proposed) and a new methodology for assessing five year housing land supply. 

Liz Peace’s CIL review team’s review of CIL: “A new approach to developer contributions”  (October 2016 but only now published) remains untackled. The Government’s response will be announced at the time of the Autumn Budget 2017. 

Decision-makers will need to grapple very quickly with the question as to the weight they should give to the white paper as a material consideration, given the Government’s clear policy direction now on a range of issues. 


Simon Ricketts, 7.2.17
Personal views, et cetera

That Written Ministerial Statement

Gavin Barwell’s 12 December 2016 Neighbourhood Planning: Written Statement  has attracted criticism not just for its content, but for inserting significant changes to the operation of the NPPF without prior consultation and without indeed making an amendment to the NPPF itself. 
Paragraph 49 of the NPPF provides that:
“Relevant policies for the supply of housing should not be considered up-to-date if the local planning authority cannot demonstrate a five-year supply of deliverable housing sites.”
ie the presumption in favour of sustainable development in paragraph 14 is triggered. This means:
“where the development plan is absent, silent or relevant policies are out-of-date, granting permission unless: 

    * any adverse impacts of doing so would significantly and demonstrably outweigh the benefits, when assessed against the policies in this Framework taken as a whole; or 


    * specific policies in this Framework indicate development should be restricted”


The December 2016 written ministerial statement provides, “…that relevant policies for the supply of housing in a neighbourhood plan, that is part of the development plan, should not be deemed to be ‘out-of-date’ under paragraph 49 of the National Planning Policy Framework where all of the following circumstances arise at the time the decision is made:

* This written ministerial statement is less than 2 years old, or the neighbourhood plan has been part of the development plan for 2 years or less;


* the neighbourhood plan allocates sites for housing; and


* the local planning authority can demonstrate a three-year supply of deliverable housing sites.”


It seems that consultation will take place in due course that will refine the policy, but in the meantime it takes immediate effect:

“Following consultation, we anticipate the policy for neighbourhood planning set out in this statement will be revised to reflect policy brought forward to ensure new neighbourhood plans meet their fair share of local housing need and housing is being delivered across the wider local authority area. It is, however, right to take action now to protect communities who have worked hard to produce their neighbourhood plan and find the housing supply policies are deemed to be out-of-date through no fault of their own.”

So, suddenly local authorities have an additional “get out of jail” card even where they cannot demonstrate a five-year supply – if the proposal is in a part of its administrative area that (1) has a neighbourhood plan that has policies for the supply of housing (including allocation of sites) and (2) if the local authority has at least a three-year supply of sites.


Local authorities with a dubious housing land supply position may now be immediately tempted to secure that neighbourhood plans within their area contain policies that echo their own housing supply/allocation policies!

Those determining applications and appeals will now need to grapple with the additional questions of whether the relevant neighbourhood plan includes policies for the supply of housing (a phrase that will be examined by the Supreme Court in February in the Hopkins Homes/Richborough Estates litigation) as well whether there is a three-year supply of deliverable housing sites (of course in some situations there may be a five-year supply but not a three-year supply, if the allocated sites have a long lead-in period but the lack of a three-year supply will be irrelevant if the five-year supply is there). 

It seems that the Government does not intend to amend the NPPF but to leave it to be read alongside the written ministerial statement. So much for the intent behind the NPPF in the first place, as described rather sceptically by the Court of Appeal in Hopkins/Richborough  (17 March 2016):
“”The “Ministerial foreword” concludes by stating that “[by] replacing over a thousand pages of national policy with around fifty, written simply and clearly, we are allowing people and communities back into planning”. Some judicial doubt has been expressed about that assertion. As Sullivan L.J. said in Redhill Aerodrome Ltd. v Secretary of State for Communities and Local Government [2015] 1 P. & C.R. 3 (in paragraph 22 of his judgment, with which Tomlinson and Lewison L.JJ. agreed), “[views] may differ as to whether simplicity and clarity have always been achieved, but the policies are certainly shorter”. In an earlier case in which this court had to consider the meaning of the policy in paragraph 47 of the NPPF, City and District Council of St Albans v Hunston Properties Ltd. [2013] EWCA Civ 1610, Sir David Keene had expressed the view (in paragraph 4 of his judgment, with which Maurice Kay and Ryder L.JJ. agreed), that “[unhappily] … the process of simplification has in certain instances led to a diminution in clarity”.” (paragraph 8)
The lack of any intention to amend the NPPF is particularly disappointing given the fact that the Government consulted  in December 2015 over other proposed changes to the framework, which remain in hiatus pending the forthcoming Housing White Paper. If the document is to be updated, why not do the job properly (and clear up other ambiguities at the same time), rather than to allow people and communities to be shut out again from the process by having a supposedly comprehensive policy statement that is anything but?
Policy making by written ministerial statement  is understandably attractive for politicians. Indeed, since the changes to the Government’s consultation principles in January 2016  we can presumably expect much less consultation:
“Do not consult for the sake of it. Ask departmental lawyers whether you have a legal duty to consult…Do not ask questions about issues on which you already have a final view. “
A legal duty to consult often does not arise – if, for example, there is no specific statutory requirement, if there has been no prior indication that has lead to a legitimate expectation that there will be consultation or if the proposal is not a plan or programme to which the Strategic Environmental Assessment Directive applies.  
The Government’s 28 November 2014 written ministerial statement that introduced the vacant building credit and affordable housing small sites threshold predated the Government’s amended consultation principles. It may well be that there was in fact no duty on the Government to consult. However, if a public body chooses to carry out consultation it must abide by judge-made rules of lawful consultation – the Sedley principles:
a)  Consultation must take place when proposals still at a formative stage;
b)  The public must be given sufficient information to allow for intelligent consideration and response;

c)  Adequate time must be given for consideration and 
response;

d) The consultation responses be conscientiously taken into 
account in finalising the proposal.

The adequacy of the consultation undertaken ahead of the 2014 statement was of one of the grounds of challenge in West Berkshire Council v Secretary of State  (Court of Appeal, 11 May 2016). Whilst the Court of Appeal found the consultation process to be lawful, that had not been the conclusion of Holgate J at first instance. No wonder the advice is now: if you don’t have to consult, don’t. Depressing for those who might hope that open debate leads to better policy making and fewer unintended consequences.

Simon Ricketts 29.12.16

Personal views, et cetera

Section 123…Go!

Rightly, no-one ever believed section 1(1) of the Localism Act 2011: “A local authority has power to do anything that individuals generally may do”. Section 2 (“boundaries of the general power”) put paid to that. 
There are many good things which authorities might do, if they were allowed. In some circumstances, this would be to dispose of their interests in land at an undervalue, where this would unlock viable development, or would for example secure more affordable housing.  
In an excellent recent Property Law Journal article  Stephen Ashworth sets out the pitfalls of section 123 of the Local Government Act 1972, which prevents local authorities from disposing of land “for a consideration less than the best that can reasonably be obtained”. “Consideration” means financial consideration rather than any wider benefits that may be secured. There is an exemption from consent in cases where the undervalue is £2m or less and the purpose of the disposal would contribute to the promotion or improvement of economic, social or environmental well-being. Stephen rightly questions this:
Critically the £2m limit is risible in the present market. It is the value of less than five London starter homes. It is often less than the difference between competing bids for land. At the very least it needs updating. In a devolutionary world, maybe, if a limit is necessary, it should be set locally, perhaps by mayors or local enterprise partnerships.”

It is certainly disappointing that the £2m cap hasn’t been increased, or that the Secretary of State has not set out any guidelines that encourage deals at an undervalue above the threshold which promote well-being, particularly in the form of increased delivery of housing, especially affordable housing. 

By coincidence, since the article was written, on 26 August 2016 Holgate J delivered judgment in R (Faraday Development Ltd.) v. West Berkshire Council & Anor  where he rejected a claim by a competing developer that West Berkshire’s development agreement with St Modwen in relation to the comprehensive regeneration of the London Road Industrial Estate in Newbury was in breach of section 123. Landmark Chambers’ summary  sets out the judge’s distillation of the principles to be applied in determining when a court should intervene in relation to the application of section 123. After a detailed examination of the deal that had been negotiated he rejected the section 123 challenge. It was common ground between the parties that if that ground of challenge failed, so too would the allegation fail that the deal amounted to unlawful state aid (ie a distortion of competition by favouring any party by virtue of the support provided by the Council to that party). 

The case is also interesting and useful for its detailed examination as to whether the arrangement between St Modwen and the Council was caught by public procurement requirements as a public works contract, in which case the Council would have breached its obligation to follow the formal public notification and competitive procedures laid down in the Public Contracts Regulations. After an analysis of the European case-law, the judge rejected this ground too:
“In my judgment the DA is a contract to facilitate regeneration by the carrying out of works of redevelopment and to maximise WBDC’s financial receipts, particularly rent, from the LRIE. The provision of services under clauses 4 to 7 and land assembly do not represent a main purpose in themselves, but simply facilitate the Council’s regeneration and financial objectives, the “twin objectives” with which WBDC’s process began (see paragraph 29 above). WBDC lawfully decided that the DA itself should not impose upon the developer an enforceable obligation to carry out the redevelopment. It is therefore not a “public works contract.

 The case should give comfort to developers and authorities alike that the pitfalls of section 123 along with equivalent risks arising from EU state aid and public procurement legislation can be safely navigated. However, challenges on these grounds remain an ever-present threat, whether for instance the state aid complaint  that has been brought in relation to the London Borough of Hammersmith and Fulham’s arrangement with CapCo in relation to the Earls Court development and the successful challenge (Stephen Ashworth acting for the claimant…) of Winchester City Council’s revised development agreement with Thornfield for the now possibly defunct Silver Hill project in R (on the application of Gottlieb) v Winchester City Council (Lang J, 11 February 2015). 

The need for some common-sense over section 123 is illustrated by the interesting wrinkle in London in relation to section 123: it doesn’t apply to Transport for London, because it is not a “principal council” for the purposes of the section, even though Schedule 11 paragraph 29 of the Greater London Authority Act 1999 does require that when it engages in development, either directly or through a subsidiary, it must do so “as if it were a company engaged in a commercial enterprise”. So it can dispose of land at an undervalue (subject to avoiding state aid problems) but can’t take an equivalently enlightened position when developing in its own right or through a subsidiary! These complications will no doubt constrain how the London Mayor delivers on his promise of increased levels of affordable housing on Transport for London land, the subject of a 26 August 2016 EGi piece

It would of course be equally useful to see a lighter touch state aid and public procurement regime, but that relies on rather larger political cogs. 
A final note arising from Faraday:
Interesting to see that the case featured Landmark’s Batman and Robin, David Elvin QC and Charlie Banner, this time on opposing sides, with Robin being given a very hard time by Holgate J, if the judgment is anything to go by…


Batman and Robin in happier times. 

Simon Ricketts, 2.9.16
Personal views, et cetera