Category: London

Elephant, Dove, Old Oak, RICS

I thought I would start 2020 by trying to establish some common ground, before then mentioning what happened shortly before Christmas in relation to the Elephant & Castle and Old Oak projects, both controversial in different ways. The questions are long but I hope that the answers are short.

Do we all agree that…

1. more housing is needed for those who cannot afford homes that are being built by the private sector in their local area, even when these are required to be sold or let at significant discounts to market rates – and that what we call that housing (eg social housing/socially rented) and the nature of the body that delivers and manages it (housing associations or other registered providers, local authorities) are secondary issues?

2. the current system of seeking to require developers to deliver that housing (whoever then manages it) is not working and is hugely inefficient, in that: (1) local policy expectations set out in local plans are often not met, due to those expectations being determined not to be viable – leading to prolonged negotiations and local objection (2) the complexities and multitude of inputs to any negotiated section 106 affordable housing package, often including intricate mechanisms to provide for later reviews of the viability position, are at best a costly distraction for all parties (needing to be tooled up with valuation and QS professionals) and at worst are prone to lead to huge delays and, over time, the prospect of renegotiation where the negotiated outcome is not sufficiently attractive to funders, or where (almost inevitably) circumstances have changed during the long course of the process?

3. it is in the public interest for communities within developments to be socially and economically diverse?

4. the system worked more easily when much more Government money was available to support affordable housing by way of grant (without grant obviously a requirement to deliver social housing has a huge impact on the viability of a scheme) and that we need to get back to a system that (1) is simple (2) delivers housing that is truly affordable for those who need it (3) is efficient and (4) does not delay development more generally?

5. government (ie our) money needs to be spent where it can have most beneficial impact and is most needed?

There has been a lot of government tinkering but don’t we have to get back to those fundamentals? I’m not sure that the Government’s promised Social Housing White Paper is going to get us there, given the absence of relevant detail about affordable housing in the Conservatives’ manifesto – talk about owning first homes is a world away from the very different challenges faced by so many.

I’m sorry to be a cracked record – see my 28 May 2017 blog post Affordable Housing Tax or 4 November 2017 blog post Viability Assessment Is Not A Loophole, It’s A Noose. We could look at the idea of expanding CIL to include a social housing contribution, so that local authorities can deliver or procure it, with the option of provision on site counting as works in kind? But I’ve previously been against further rolling out another complex and inefficient regime, ie CIL, and most authorities, hollowed out and stretched as they are, are not currently in any position to deliver or procure social housing at scale. Instead, personally I would simply prefer that we go back to the old way – grants to providers so as to reduce the impact on viability for the developer of providing social housing.

In the meantime, we have to make the current system work. My 8 June 2019 blog post The Bottom Line: Updates On CIL And Viability reported on the RICS professional statement on financial viability in planning, which came into effect on 1 September 2019, and mentioned the revisions made to viability passages of the PPG by the Government on 9 May 2019, reflecting changes to the NPPF that seek to ensure, amongst other things, that detailed viability examination takes place at plan-making stage rather than when applications come forward.

The RICS professional statement sets out the professional responsibilities of the surveyor in the viability appraisal process, to seek to ensure that the surveyor operates with professional independence and integrity throughout. The RICS is now consulting from 13 December 2019 until 9 February 2020 on a draft guidance note Assessing financial viability in planning under the National Planning Policy Framework for England, 1st edition that seeks to set out the methodology to be applied by those professionals, so as to give effect to Government policy.

“We are not seeking comments contrasting the government framework with a market-based appraisal. Comments should focus on whether our draft guidance gives effect to government policy and practice guidance, in an administratively efficient way, in order to deliver the objectives of the NPPF.”

Make your views known.

In the meantime…

Elephant & Castle

Delancey’s proposed redevelopment of the Elephant & Castle shopping centre and London College of Communication has long been controversial. It proposes a large mixed-use development comprising a range of buildings of up to 35 storeys, with a mix of uses including 979 dwellings (proposed to be for rent rather than sale) and accommodation for retail, office, education, assembly and leisure along with a remodelling of the London Underground station. One of the lines of attack for objectors, including the 35% Campaign, has been the perceived lack of “genuinely affordable” housing.

Planning permission was granted by the London Borough of Southwark on 10 January 2019. Just before Christmas, in Flynn v London Borough of Southwark (Dove J, 20 December 2019), the High Court rejected a crowdfunded challenge to the permission brought on behalf of the 35% Campaign. The grounds of challenge all turned on the affordable housing deal that Southwark struck in the section 106 agreement with the developer.

The case doesn’t turn on any particularly interesting legal principles or make any new law. But the facts, set out in careful detail by Dove J, illustrate precisely the concerns that lay behind my attempt just now to establish some common ground:

The policy background is not straightforward, with a changing position both at borough level and at London Plan level.

The Mayor has set out criteria in his 2017 affordable housing and viability SPG for different tenures of affordable housing, including social rent (target rents determined through the national rent regime), affordable rent (rent controls requiring a rent of no more than 80% of the local market rent), intermediate (available for rent or sale at a cost above social rent but below market levels – and eligible only to households whose annual income is within a defined range) and intermediate London Living Rent (only available to households renting with a maximum income of £60,000 without sufficient current savings to purchase a home within the local area).

The adopted London Plan requires boroughs to seek the “maximum reasonable amount of affordable housing…when negotiating on individual private residential and mixed use schemes, having regard to” a number of factors, including “development viability” and the “availability of public subsidy”.

Within the Elephant & Castle area, Southwark’s adopted plan seeks a minimum requirement of 35%, on the basis of a split of 50% social rented and 50% intermediate housing. Its emerging plan seeks, in relation to build to rent developments, a different tenure split for the 35%: social rent equivalent (ie social rent level but not managed by registered provider) 34% minimum, affordable rent (aka discount market rent) capped at London Living Rent equivalent 52% minimum, affordable rent (aka discount market rent) for household incomes between £60,000 and £90,000 per year 14% minimum. The lack of social rent reflects the specific nature of build to rent developments, where it is more efficient for all of the housing to remain under single management rather than for a separate registered provider to be introduced.

At the time Delancey’s application first went to committee on 16 January 2018, its proposal was 36% affordable housing based upon habitable rooms, with the 36% made up as follows: 10% social rent equivalent, 46% London Living Rent, 43% discount market rent. The non policy compliant offer (in terms of tenure split) was based on an agreed viability assessment. Despite a recommendation for approval, members deferred a decision until a meeting scheduled for 30 January 2018 at which they intended to formulate reasons for refusal. The day before the follow-up meeting the developer made further proposals in relation to the affordable housing offer and the application was deferred to a subsequent meeting.

The revised proposal was to replace 33 social rent equivalent units with 74 socially rented units, all to be located on the western part of the development and to be owned and operated either by the borough or by a registered provider. This changed the tenure split (of the 35% affordable housing dwellings) to: social rent 24.9%, London Living Rent 27.9%, discount market rent 47.2%.

In June 2018 the offer was increased again. The developer’s consultants indicated that following “in-principle agreement from the GLA to provide grant funding towards the proposed scheme” the number of social rent units could be increased to 116 homes, or 38.1% of the 35% of the units that were to be affordable.

The application was approved at a committee meeting on 3 July 2018. It was acknowledged in the report that the proposed tenure split was still not policy compliant but was justified by way of the agreed viability appraisal. The report also noted that there would need to be a fallback arrangement in the section 106 agreement to cater for the possibility that the developer might choose after all to develop the western part of the development on a for sale rather than for rent basis (in which case the affordable housing requirement for that part of the site would return to 50% social rented, 50% intermediate).

If all of this does not start to give an idea of the inevitable complexity of negotiations on a scheme such as this, then consider the viability appraisal. As is common with a significant longterm development, where application of the more straightforward benchmark land value plus developer’s profit approach does not reflect accurately the financial modelling of a project over time, viability was judged against a minimum internal rate of return for the developer.

The latest RICS draft guidance defines internal rate of return (or “IRR”) as follows:

“The rate of interest (expressed as a percentage) at which all future project cash flows (positive and negative) will be discounted in order that the net present value (NPV) of those cash flows, including the initial investment, be equal to zero. IRR can be assessed on both gross and net of finance.”

However, unless I have missed it, there is no guidance anywhere as to when an IRR approach is appropriate and how to arrive at and test the inputs and modelling.

The agreed benchmark was 7.15% IRR, with annual growth to 11% over the construction period. Review mechanisms in the section 106 agreement provide that 50% of any excess are to be applied to increasing the affordable housing provision up to a policy compliant level/tenure split.

The claimant had three grounds of challenge. The first turned on an alleged inaccuracy in the way that the GLA’s offer of funding had been reported – it had not been formally confirmed and discussions were at an “in principle stage”. The second alleged that one of the detailed mechanisms in the section 106 agreement departed from the relevant head of term in the committee resolution. The third related to the mechanism in the section 106 agreement for determining the affordable housing to be provided if the western part of the site turned into a “for sale” development, but a deed of variation had been entered into after the challenge was brought, largely correcting the error that had been identified.

Dove J rejected each of the grounds, whilst accepting that each was arguable. (1) The report did not materially mislead members. (2) The section 106 mechanism was not outside the scope of the committee resolution (“True it is that the solutions arrived at are not a literal interpretation of paragraph 364 [of the report to committee], in that they do not include for the provision of land and a substantial cash dowry to construct the social rented units but, in my judgment, that was not required in order to remain within the scope of the delegation granted by the members”). (3) The approach to the fallback (“for sale”) scenario was “entirely rational and appropriate”. Part of the claimant’s criticism of the arrangements turned on whether the additional affordable housing in these circumstances should be social rented units rather than the social rented equivalent units provided for. The judge saw nothing relevant in the distinction:

“In terms of the matters raised by the Claimant the quality of tenure enjoyed by tenants in social rented equivalent properties are, as the nomenclature suggests, equivalent to those in social rented properties. Of course, there may well be nuanced differences between them as a consequence of them being separately defined. Furthermore, they will be managed in different ways as the definition implies. Be all of this as it may, in my view the important point is that the requirement of the officers’ report was a review in terms of affordable housing, and whether the additional habitable rooms were to be provided as social rented or social rented equivalent accommodation was not identified as being in any way a critical point upon which the delegation to the officers of authority to enter into the section 106 obligation turned. Put another way, whatever may be the nuanced differences between social rented equivalent property and social rented units that was not identified as a key requirement in relation to the review mechanism contemplated were the developer to take up the fall-back scenario.”

Will the new guidance make any of this more straight forward? I doubt it. Would proper funding for social rent and social rent equivalent housing? Of course it would.

Old Oak and Park Royal Local Plan

The recent NPPF and PPG changes of course seek to move the viability spotlight to the point at which sites are allocated for development. The Old Oak plan was examined last year under the previous NPPF but viability matters were still centre stage and the inspector’s findings may be an indicator of the detailed scrutiny that is likely to be given to the viability in particular of strategic sites (taken together with proposed policy requirements in terms of infrastructure delivery and affordable housing).

One of the key issues for the inspector was whether the proposed allocation of the 54 acre Cargiant site for residential and associated development was viable. Cargiant had itself attempted development of its site in the past. It had concluded that it would be unviable to contemplate relocating or extinguishing its business and carrying out the development – and took the position that there was no reasonable prospect within the plan period of the Old Oak and Park Royal Development Corporation (“OPDC”) being in a position to carry out such proposals, even by resorting to compulsory purchase and even with the benefit of £250m Housing and Infrastructure Fund monies which had been agreed in principle to be allocated by MHCLG.

My firm acted for Cargiant and so I will restrict myself to pointing out the level of detail to which the inspector went in his interim findings on viability of Cargiant site proposal (10 September 2019) before concluding that the allocation would be unviable and therefore unsound.

The day after the general election, on 13 December 2019, the OPDC announced that it would change its proposals, which will now leave Cargiant in place:

New focus for Old Oak and Park Royal regeneration:

“The Old Oak and Park Royal Development Corporation (OPDC) has today set out a revised approach to deliver tens of thousands of new homes and jobs through collaboration with major public sector landowners.

The regeneration of Old Oak, Park Royal and surrounding areas in west London, has the potential to deliver 25,500 new homes and 65,000 jobs over the next 30 years. OPDC has already approved plans for over 5,000 homes including 1,500 already completed or being built.

The shift in approach has been triggered by recent, rapid increases in industrial land values in west London which mean that it is currently not financially viable to deliver OPDC’s early regeneration plans at Old Oak North. This area, close to the planned new HS2 interchange station, includes the 54-acre site that is owned and operated by Cargiant, which had originally been earmarked for development.

Earlier this year, the Planning Inspector, in his interim report on the OPDC’s draft Local Plan, de-designated the Cargiant site from Strategic Industrial Land, but also concluded that Old Oak North had become commercially unviable for residential-led development at this time.”

Whilst this situation might be taken to be an example of how viability matters can indeed in practice be taken into account at the plan-making stage, I do have concerns:

⁃ There is now a bigger onus on authorities to carry out proper viability work, including work to a sensible level of detail on strategic sites (albeit often with assistance from those promoting those sites for development), and is it actually going to be done?

⁃ Where it is not done, delays will occur in the examination process. At Old Oak, the necessary work had not been done and there was a significant hiatus whilst it was commissioned.

⁃ Development proposals are often not sufficiently worked up, at the stage that the plan is being prepared, so as to enable a sensible viability appraisal to be undertaken. And will developers be prepared always to come clean at the allocation stage as to the challenges they are facing in making the numbers stack up?

⁃ Will there always be participants in the local plan examination process with the motivation and resources to put authorities to proof on the work that has been carried out? If Cargiant hadn’t taken its stance (entailing lawyers and a team of consultants to challenge much of the inputs) I suspect the allocation would have been confirmed without challenge – and then proved over time to be undevelopable.

The next blog post will be shorter, I promise.

Simon Ricketts, 4 January 2020

Personal views, et cetera

Pic credit: Bizarro Comics

Can’t Buy A Thrill: Evenings In High Streets

We’re hosting a workshop for London First this week, as part of its London’s Transforming High Streets programme.

Usual mistake of agreeing to say a few words and then reading what it’s about:

“The aim of the workshop is to bring together London First members and stakeholders to investigate the barriers to town centre transformation thrown up by the licensing system, and whether there is a disconnect between the places envisioned by the planning system and the permissions given to operators through licensing. Too often we hear examples of businesses trying to create the kind of vibrant live-work-eat-play, 24h places that consumers increasingly demand, only to be actively shut down through licensing. Or developers berated for not incorporating bold design into their regeneration plans, knowing full well the suggested outdoor spaces would never get permission to be used for anything mildly interesting. Are there good examples of where licensing is actively enabling change and growth, and how can we make sure this becomes standard practice to support our a fast-changing retail and hospitality sector?”

This is all close to my heart. Opportunities for socialising and cultural activity, theatres, live music, all make London what it is. I walked through the latest phase of Argent’s Kings Cross development last night, the area already buzzing with people enjoying the spaces and venues. And, whilst some change is always inevitable, even more important are London’s existing pubs and venues, under threat by any combination of the five Rs: rents, rates, regulation, residents and redevelopment.

But I realised how much a planning lawyer like me operates in a professional silo, trained to think of the statutory regimes for alcohol and entertainment licensing, just like Building Regulations, as “not planning law”.

Which is a bit odd.

If town and city centres are to retain their central economic and social role they have to be about more than working and shopping. And that needs legislation and policy to be focused on common objectives.

See this BBC piece The growing importance of the night-time economy (17 November 2019). The “live music” sector alone made a contribution of £1.1 billion to the UK economy in 2018, according to UK Music’s Music By Numbers 2019 (20 November 2019).

I can only talk first hand about London.

When becoming London Mayor in May 2016, one of Sadiq Khan’s early steps was to appoint Amy Lamé as London’s “night czar”. Aside from presenting her excellent Sunday afternoon BBC6 Music show (at a time when even I am still awake), she has played an active role in encouraging all aspects of London’s night time economy and the Mayor has made steady progress, including on TfL’s important night tube strategy. Could more have been done? I would be interested to hear views.

As announced in the Mayor’s 31 January 2019 press release London’s night-time economy can help save the high street, London’s Night Time Commission published its report Think Night: London’s Neighbourhoods from 6pm to 6 am with its ten recommendations:

“RECOMMENDATION 1: The Mayor should put the night at the heart of London policy- making. He should introduce a Night Test for all new policies to rate their impact on London’s culture, sociability, wellbeing and economy at night.

RECOMMENDATION 2: The Mayor should produce Night Time Guidance for boroughs. This will help them develop holistic Night Time Strategies that go beyond the night time economy and cover all aspect of their town centres and other areas between 6pm and 6am.

RECOMMENDATION 3: The Mayor should set up a London Night Time Data Observatory. This central hub of data on the economy, transport, licensing, infrastructure, safety and health would help boroughs create their Night Time Strategies and inform local decision making

RECOMMENDATION 4: The Mayor should publish an annual report on London at Night. It should include a series of night time metrics that show his progress in implementing the Night Time Commission’s recommendations and achieving the ambitions of his 24-Hour City Vision

RECOMMENDATION 5: The Mayor should establish a Night Time Enterprise Zone fund that boroughs can bid into, starting with a Pathfinder Zone in 2020

RECOMMENDATION 6: The Mayor should carry out research to establish the case for longer opening hours across London

RECOMMENDATION 7: The Mayor, should help establish new partnerships across the capital to improve safety, reduce violence and make London welcoming for everyone at night

RECOMMENDATION 8: The Mayor should develop guidance to help boroughs, landowners and developers create welcoming, safe and vibrant public spaces at night

RECOMMENDATION 9: The Mayor should set up a Late Night Transport Working Group to ensure that workers, visitors and customers can get around London quickly and safely at night. The group should consider extending night services, introducing a ‘Night Rider’ fare that allows workers to move between bus, tube, train, DLR or tram in a single fare, and encourage more use of TfL’s land and buildings at night

RECOMMENDATION 10: The Mayor should extend the remit of London & Partners so that they can promote London’s night time offer to Londoners

The Mayor’s responses to the recommendations have included:

“• The Night Czar convening a quarterly 24-hour London delivery group at City Hall to assess the impact of policies on London at night

• The Night Czar and Night Time Borough Champions Network working together to produce guidance for boroughs to develop night-time strategies

• Creating a Night Time Data Observatory to build a full picture of the capital at night

• Reporting progress on the Commission’s recommendations as part of the Mayor’s Annual Report

• Creating a Night Time Enterprise Zone pilot scheme to help a borough develop its night-time offer

• Conducting research into the benefits of longer opening hours across London

• Championing partnerships across the capital that support the night-time economy and investing in the creation of the Safer Sounds Partnership

• Including guidance on improving public spaces at night as part of the work to develop borough night-time strategies

• Establishing a Late-Night Transport Working Group to ensure transport meets the needs of London’s night workers

• Continuing to support London & Partners in their work to promote the capital’s 24-hour tourism offer”

In June the Mayor launched a bidding process to select a pilot Night Time Enterprise Zone, as well as establishment of the Safer Sounds Partnership, led by the music industry and part of the Safer Business Network, aimed at developing better liaison between venue operators and event organisers with police and council licensing teams, together the night czar (see his 7 June 2019 press release).

On 10 September 2019, the Mayor announced that Walthamstow High Street had won the bidding process to be London’s first Night Time Enterprise Zone. According to the Mayor’s press release:

“The pilot, which runs from October to January, will see Waltham Forest try out a range of proposals for the high street, including:

 

•          Offering entrepreneurs low-cost and flexible business spaces to hire in the evenings

•          Establishing a new fund to help business and community groups host events after 6pm

•          Running a ‘shop local late’ campaign

•          Hosting a ‘reclaim your high street event’ with activities for all ages

•          Creating a step-by-step guide for night-time businesses to help them apply for planning and licensing approval

•          Encouraging late shopping with a new evening map and events listings

•          Encouraging local people and night-time workers to have their say on how to make Walthamstow work better for them after 6pm.”

I would be interested to hear how all this going. There is relatively little on line – and no sign yet of the “step-by-step guide for night-time businesses to help them apply for planning and licensing approval”.

The draft London Plan has policy HC6 (“supporting the night-time economy”):

“HC6

• Boroughs should develop a vision for the night-time economy, supporting its growth and diversification, in particular within strategic areas of night-time activity (see Table A1.1 and Figure 7.7), building on the Mayor’s Vision for London as a 24-Hour City.

• In Development Plans, town centre strategies and planning decisions, boroughs should:

1. promote the night-time economy, where appropriate, particularly in the Central Activities Zone, strategic areas of night-time activity, town centres, and where public transport such as the Night Tube and Night Buses are available

2. improve inclusive access and safety, and make the public realm welcoming for all night-time economy users and workers

3. diversify the range of night-time activities, including extending the opening hours of existing daytime facilities such as shops, cafés, libraries, galleries and museums

4. address the cumulative impact of high concentrations of licensed premises and their impact on anti-social behaviour, noise pollution, health and wellbeing and other impacts for residents, and seek ways to diversify and manage these areas

5. ensure night-time economy venues are well-served with safe and convenient night-time transport

6. protect and support evening and night-time cultural venues such as pubs, night clubs, theatres, cinemas and music and other arts venues.

• Promoting management of the night-time economy through an integrated approach to planning and licensing, out-of-hours servicing and deliveries, safety and security, and environmental and cleansing services should be supported. Boroughs should work closely with stakeholders such as the police, local businesses, patrons, workers and residents”

But how effective is this in the short-term, given how long it will take for the policy to be reflected on borough plans/licensing policies, and the various planning policies at all levels (national, London-wide and borough) that point in potentially conflicting directions?

I would be interested to hear how joined up, or not, boroughs’ planning and licensing strategies are, in practice, at present. Operating hours for a development will often for instance be set down in planning conditions, only for a different set of hours to be set out in the eventual premises licence – or detailed operating strategies required which should be the domain of the licensing process.

The formal procedures and statutory criteria to be applied are certainly very different.

The Home Office’s guide to alcohol licensing under the Licensing Act 2003 covers the three types of licence required, namely

“ •any business or other organisation that sells or supplies alcohol on a permanent basis needs to apply for a premises licence

• anyone who plans to sell or supply alcohol or authorise the sale or supply of alcohol must apply for a personal licence

• qualifying members’ clubs (such as the Royal British Legion, working men’s clubs and rugby clubs) need to apply for a club premises certificate if they plan to sell or supply alcohol”

The DCMS guide to entertainment licensing, sets out the licensing process required, since the coming into force of the Live Music Act 2012, for:

• “anyone that provides any entertainment between 11PM and 8AM;

• anyone that provides amplified live or recorded music to an audience of more than 500 people;

• anyone that provides recorded music to an audience on premises not licensed for the sale or supply of alcohol;

• anyone that puts on a performance of a play or a dance to an audience of more than 500 people, or an indoor sporting event to more than 1,000 spectators

• anyone that puts on boxing or wrestling

• anyone that screens a film to an audience”

The Home Office has published guidance (April 2018) as to how licensing authorities are to discharge their functions.

There are four licensing objectives:

• The prevention of crime and disorder;

• Public safety;

• The prevention of public nuisance; and

• The protection of children from harm.

The guidance goes on to explain that “the legislation also supports a number of other key aims and purposes. These are vitally important and should be principal aims for everyone involved in licensing work. They include:

• protecting the public and local residents from crime, anti-social behaviour and noise nuisance caused by irresponsible licensed premises;

• giving the police and licensing authorities the powers they need to effectively manage and police the night-time economy and take action against those premises that are causing problems;

• recognising the important role which pubs and other licensed premises play in our local communities by minimising the regulatory burden on business, encouraging innovation and supporting responsible premises;

• providing a regulatory framework for alcohol which reflects the needs of local communities and empowers local authorities to make and enforce decisions about the most appropriate licensing strategies for their local area; and

• encouraging greater community involvement in licensing decisions and giving local residents the opportunity to have their say regarding licensing decisions that may affect them.“

Each licensing authority must publish a statement of its licensing policy at least every five years. Here, by way of example, is Camden’s statement of licensing policy 2017 – 2022, with much detail as to its expectations of operators, examples of licensing conditions for different kinds of venues and framework hours. How many of us, or our clients, get involved in this process?

Licensing applications are publicised and consultations take place with the police and other bodies. Contested applications are likely to go to a hearing before a licensing sub-committee, with appeals heard by the Magistrates’ Court.

A practitioner recently explained to me some of the differences that he sees. For instance:

⁃ a premises licence is automatically granted where there are no objections. Imagine the planning system working like that!

⁃ the grant of a premises licence is a material consideration in the determination of a planning application, but not vice versa.

⁃ there is a greater focus at premises licence hearings on evidence of actual, rather than potential, impact.

⁃ There is ongoing regulatory control as to a premises licence – not a once and for all event in the way that the grant of planning permission is.

⁃ Licensed premises form only a small part of planning officers’ workload (especially outside central London) and there can be little knowledge of the detailed ways in which the licensing regime works, often leading to a “belt and braces” approach.

Fair points?

A House of Lords Select Committee considered the operation of the 2003 Act licensing regime in an April 2017 report.

One of the Select Committee’s main areas of focus was whether the licensing and planning regimes should be better integrated:

“In our call for evidence we asked: “Should licensing policy and planning policy be integrated more closely to shape local areas and address the proliferation of licensed premises? How could it be done?” An overwhelming majority of respondents criticised the current lack of coordination between licensing and planning, and thought that there should be better integration. We were given numerous examples of the absurdities caused by the separation of the systems, especially for applicants for new premises which need permission for both planning and licensing, and for whom permission for one without the other is of no use.

This example given to us by the London Borough of Hounslow is just one illustration:

“One recent problem is a restaurant who built a structure in their garden without planning permission. Planning permission was subsequently applied for and refused. There was fierce opposition to the structure from local residents and in our view the concerns of the residents were valid. The owners have also applied for a premises licence which includes the structure. Planning could not object because the regimes are supposed to be separate and the licence was subsequently granted with restrictions. We now have a situation where the planning permission is refused and the licence is granted. Residents have commented on their confusion and the premises licence holder has received an approval and a refusal for the same structure from the same local authority.”

Their conclusion was: “The whole process is confusing for our residents and we would support a change in the position so that planning permission can be considered when determining licence applications.”

The Select Committee concluded:

“If, as we think, it is not only permissible but logical to look at licensing as an extension of the planning process, it would have been sensible for the Licensing Act to transfer the powers of licensing justices to the planning committees of local authorities, rather than set up a new and untried system of licensing committees with a new and different procedure, new staffing, and a new appellate process. Instead the result has been that each local authority has been able to deal with all aspects of land use through a planning committee with the single exception of licensed premises, which require a separate committee and a separate mechanism. Now that the system has been in operation for 11 years, we believe that this can be seen to have been a mistake and a missed opportunity.

We recognise that a suggestion that licensing committees should be abolished and their work amalgamated with that of planning committees is a radical one. It is not a change which should be made without first being trialled over a small but representative sample of local authorities over perhaps two years.”

The Government pretty much rejected the recommendation out of hand in its August 2017 response:

“While the Government rejects some recommendations and conclusions, there are several recommendations which are a spur to further work, particularly in respect to how the system of licensing can be made to function more effectively and the lessons that can be learned from the planning system.”

“We accept that improvements could be made in some local areas and that the synergies between planning and licensing should be part of an ongoing discussion about how we can support local improvements. Instead of transferring the functions of licensing committees to planning committees, we are focusing on improving training and providing stronger guidance on how licensing hearings should be conducted.

The basic structures of the planning and licensing system are similar and our focus will be on improving how the two regimes communicate and interact at local level. There is good practice in many local areas that we will disseminate and build on, for example whether there is additional support that local residents could be given to frame and present their concerns about a licensing application to the committee effectively.”

Will this separation hold firm? Is it sensible for statements of licensing policy to be prepared separately from local plans? Is it sensible for licensing and planning matters to be dealt with by different committees and sub-committees? Is this efficient and understandable both by potential users of the systems, by local authority officers and members, and by local residents? Is there another way of reconciling the desirability of encouraging the night-time economy with legitimate local concerns as to amenity?

You tell me.

Simon Ricketts, 30 November 2019

Personal views, et cetera

Detail from Port of London, Night by Maximilien Luce, 1894

Planning Or Politics? Significant London Planning Decisions 2019

Here is the skeleton of a presentation I am giving at the RTPI London Annual Summit 2019 on 20 November 2019. You’ll have to come along for the flesh, as it were.

I just wanted to do a basic trawl of what has been happening over the past year in terms of:

• Mayoral directions to refuse

 

• Mayoral directions that he is to be the local planning authority

 

• Secretary of State call-in decisions

 

• Secretary of State decisions on recovered appeals

 

Mayoral directions to refuse

 

Former Tesco car park, Conington Road/LB Lewisham

Affordable housing provision, viability review mechanism

Direction 9 March 2019

 

The Tulip/City of London

Urban design, historic environment (including Tower of London world heritage site), strategic views, pedestrian movement, cycle parking

Direction 15 July 2019

 

Harrow School/LB Harrow

Direction 29 November 2018 – no very special circumstances for development in MOL

Secretary of State allowed on appeal 31 October 2019, with costs award against Mayor

 

Mayoral directions that he is to be the LPA

 

Former Biscuit Factory, Bermondsey/LB Southwark – 1,342 build to rent units and other uses

Direction 7 May 2019 – housing and affordable housing

Public consultation on scheme amendments including to increase housing to 1,548 build to rent units and affordable housing from 27.5% to 35%

No representation hearing yet arranged

 

Osiers Road/LB Wandsworth – commercial with 168 resi units

Direction 10 June 2019 – housing and affordable housing

Raised AH offer from 39% habitable rooms to 100%

Representation hearing and planning permission 18 October 2019

 

100 West Cromwell Road/RB Kensington & Chelsea – 145 affordable housing units, 282 market residential units and other uses

Direction 1 July 2019 – housing and affordable housing

Revisions to scheme including increased quantum of affordable housing (427 total of which 186 affordable), reduced parking and improved community leisure offer. Increased height and other design changes

Representation hearing anticipated February 2020

 

Homebase site, Manor Road/LB Richmond-upon-Thames – 385 residential units and other uses

Direction 29 July 2019 – housing and affordable housing

No representation hearing yet arranged

 

Kidbrooke Station Square/LB Greenwich – new bus station interchange, commercial, 619 residential units – applicant Notting Hill Genesis & TfL

Direction 5 August 2019 – housing and affordable housing

Representation hearing was to be 31 October 2019

 

Kensington Forum Hotel/RB Kensington & Chelsea – hotel, service apartments, 46 affordable housing units (100%)

Direction 5 November 2018

RBKC JR, direction quashed by consent order 16 April 2019

2nd Direction 23 April 2019 – visitor economy, housing and affordable housing

Public consultation on scheme amendments including increase in residential units from 46 to 62

Representation hearing and planning permission 21 June 2019

2nd JR by RBKC, going to full hearing 21 November 2019

 

Secretary of State call-in decisions

 

No London call-in decisions in 2019 but:

 

Purley Baptist Church/LB Croydon – 106 residential units and other uses

Refused by Secretary of State by 3 December 2018 decision letter , following 12 April 2017 call-in

Quashed by consent of parties March 2019, back with Secretary of State for redetermination

 

Vauxhall Cross Interchange/LB Lambeth – hotel and 677 residential units

Called in by the Secretary of State, May 2019

Inquiry commences 17 December 2019

 

Holocaust Memorial, Victoria Tower Gardens/Westminster CC

Called in by Secretary of State, November 2019, at request of applicant following WCC non-determination

 

Secretary of State decisions on recovered appeals

 

Slade Green SRFI/LB Bexley & Dartford BC

Dismissed 7 May 2019, following inspector’s recommendations

 

1 Cambridge Heath Road/LB Tower Hamlets – replacement foodstore, 471 resi units and other uses

Dismissed 10 June 2019 against inspector’s recommendations

• Fails to meet NPPF’s aims of creating an inclusive place

• Harm from loss of daylight and sunlight

 

The Curve, Great West Road/LB Hounslow – up to 325 residential units and other uses

Dismissed 19 July 2019 against inspector’s recommendations

• Harm to setting of designated heritage assets

Decision subject to legal challenge, permission to proceed to a full hearing, no hearing date yet

 

Harrow School (see earlier)

 

Simon Ricketts, 15 November 2019

Personal views, et cetera

Pic courtesy of https://commons.m.wikimedia.org/wiki/User:Colin/London .

More Plans Grounded: West Of England; Sevenoaks; London

My 13 July 2019 blog post Less Than Best Laid Plans: Political Pragmatism commented on the previous Secretary of State’s 18 June 2019 letter to PINS, which stressed the need for pragmatism on the part of local plan inspectors.

MHCLG must be careful not to shoot the messenger. Inspectors are continuing to point out basic flaws in plans which, in most cases, have been pretty clear to the planning community for some time. Aside from the passive aggressive approach of that letter, which I hope will not be supported by the new Secretary of State, inspectors are also facing increasing hostility from some local political leaders.

West of England joint spatial strategy

I referred in my 17 August blog Gestation Of An Elephant: Plan Making to the inspectors’ letter dated 1 August 2019, which was provisionally recommending withdrawal of the West of England joint spatial strategy. Since then the inspectors have set out their detailed reasoning in a subsequent letter dated 11 September 2019 which focuses on the “key points which have led us to conclude that there are very substantial soundness problems with the plan.”

The plan had identified that 17,000 dwellings needed to be provided at 12 “strategic development locations”. The inspectors pointed out that despite the fact that the plan comprised two housing market areas and despite evidence as to various local housing needs, “no requirement figures (either precise or indicative) have been considered or identified for any individual settlements, for each local authority area or for any other sub- area of the West of England as a whole. Thus, we understand that the SDLs were selected on the basic presumption that any candidate SDL anywhere within the plan area could meet the plan area’s housing needs just as well as any other candidate.” There was no robust assessment of reasonable alternatives.

“[We] conclude that robust evidence has not been provided to demonstrate that the 12 SDLs proposed in the plan have been selected against reasonable alternatives on a robust, consistent and objective basis. Consequently, given that the SDLs are an integral part of the plan’s spatial strategy, we cannot conclude that the spatial strategy is itself sound. Additionally, the absence of a robust SDL selection process or a strategy which is not based on specific SDLs means that there is not a clear basis on which to select alternative/additional SDLs (either in a review of the JSP or in local plans) should this be necessary if one were to “fall away” (eg because of deliverability problems) or if the quantum of development needs were to change over time.”

The inspectors plainly were aware of that need for “pragmatism” (indeed the advice is acknowledged paragraph 49 as a matter to which they attached “great weight”). They say this:

“We first set out our concerns about the spatial strategy and the SDL selection process in June 2018, a few weeks into the examination. In the spirit of pragmatism and recognising the desirability of getting a sound plan in place, we gave you the opportunity to prepare a considerable amount of further evidence in an attempt to address these concerns. Unfortunately, this has not been successful and for the reasons detailed above our concerns remain and, indeed, have deepened. In the light of this we consider that any further work to simply re-justify the selection of SDLs included in the plan or any change in the way the existing strategy is merely articulated in the JSP, could not now be considered to be anything other than retrospective justification of the plan. Consequently, it would be very unlikely to persuade us that the SDLs, and thus the spatial strategy overall, were selected on a robust, consistent and objective basis.”

The approach to SDLs was not the only issue. The inspectors also set out their concerns as to:

⁃ “the approach to, and policy steer on, the purpose, amount and distribution of non-strategic growth; and

⁃ the plan’s proposals for overall employment land provision if, as we believe is likely, we were to conclude that policy 4 is not sound, including proposals for, or the policy steer on, growth at Bristol Port and Bristol Airport if, as we believe is likely, we were to conclude that the plan is not currently sound in these particular respects.”

Furthermore:

“Additionally, if we were to conclude that the contended OAN of 102,800 is significantly underestimated, there would be a need to provide for a significantly higher objective-assessed need for housing in the plan.

Moreover, each of these elements cannot be considered in isolation, as the preferred and justified approach in relation to one is likely to impact on at least some of the others. Furthermore, there would need to be robust justification that there are exceptional circumstances to justify any proposed alterations of the Green Belt boundary for housing or any other purposes. It is also very likely that key policy decisions would need to be taken in respect of most or all of these elements of the plan.”

Finally, there is recognition of the confusion caused to local communities by endless stages of re-consultation in relation to flawed plans:

“At the hearings we heard from a number of examination participants who were already confused by the processes of, and multiple rounds of consultation undertaken in, getting the plan to this stage. This was particularly so given the parallel processes of developing and consulting on the emerging local plans for each authority and the Joint Local Transport Plan 4. Continuing with the examination along the, undesirable, lines detailed above would also be likely to be more complicated in consultation and public participation terms than returning to the plan preparation stage, thus potentially hindering the community’s ability to comment on and influence the plan.

Consequently, whilst we recognise that the Councils’ preference might be to continue with the examination if at all possible and, although we will not reach a final decision on the way forward until we have had the opportunity to consider the Councils’ response to this letter, we remain of the view that withdrawal of the plan from examination is likely to be the most appropriate option.”

Sevenoaks district local plan

The Sevenoaks plan is another one that has pretty much crash-landed on take off. The hearing sessions started on 24 September 2019. On 17 October 2019, the inspector wrote a one and a half page letter to the council to indicate that she has “significant concerns about a number of aspects of the Plan, both in terms of legal compliance and soundness.”

She states:

“My main concern relates to the lack of constructive engagement with neighbouring authorities to resolve the issue of unmet housing need and the absence of strategic cross boundary planning to examine how the identified needs could be accommodated. Indeed, the Council did not formally ask neighbouring authorities if they were in a position to address its unmet housing need until just before the Local Plan was submitted for Examination. I am not satisfied, therefore, that the Council has addressed this key strategic matter through effective joint working, but has rather deferred it to subsequent Plan updates. This is evidenced by the ‘actions’ set out in the Statements of Common Ground with neighbouring authorities submitted to the Examination. I consider this to be a significant failure in the Council’s Duty to Co-operate. Any failure of the Duty to Co-operate cannot be rectified during the Examination and therefore the only option is for a Report recommending non-adoption to be issued or for the Plan to be withdrawn from Examination.

Furthermore, I have significant concerns about the soundness of the Plan in respect of a number of areas including the approach to Sustainability Appraisal, the chosen Strategy for Growth, the assessment of the Green Belt and housing supply and distribution.”

What is no doubt frustrating to the council, aside from the very visible and expensive failure, which will have significant practical consequences not just for the district but for plan-making by nearby authorities, is the lack at present of more detailed reasoning. A more detailed letter is promised. However, surely nothing excuses the council’s intemperate response, which is hardly likely to assist a positive outcome. The council’s disappointment is clear enough from its formal response dated 21 October 2019:

“The Inspector’s initial conclusions are at odds with the independent advice that the Council received in advance of submission, including our discussions with the Government’s own Planning Advisory Service (PAS), the opinion of a QC and industry experts – including former senior Planning Inspectors. This extensive peer review was undertaken in good faith, to inform the examination process and avoid the circumstances that we now appear to find ourselves in.”

However, surely comments attributed to the council’s leader in its press statement issued the same day are inexcusable, for instance:

“To call into question an evidence-led approach comes to the root of our concerns with the actions of the Inspector. If we are not to follow the evidence to make our Plan then the Government may just as well dictate how many homes an area should have and then pick sites, we need to put an end to the thinly veiled charade that local plans are in any way locally led.

“But the most damning comment has to be left for the Inspector’s approach to publish her brief note before allowing the Council to either see her full reasoning or have a chance to respond. This suggests her mind is far from open and she and her masters have made their minds up.

“Sevenoaks District Council will stand up for its residents and the District’s environment against what we believe is a huge abuse of the process by the Planning Inspectorate and the Government department responsible. We will not allow them to run roughshod over the huge weight of evidence we have amassed, community views we have collated and the few powers we have left as a planning authority.”

London Plan 2019

We finally have the inspectors’ report into the London Plan, together with their detailed recommendations.

I set out the peculiar legal framework that applies to the London Plan in my 23 April 2017 blog post Make No Little Plans: The London Plan. An additional peculiarity is that the Mayor of course does not have to accept the inspectors’ recommendations. If he does not intend to accept the recommendations, he has to send the Secretary of State a statement of his reasons (see regulation 9 of the The Town and Country Planning (London Spatial Development Strategy) Regulations 2000) and the Secretary of State has the power to direct that modifications to the plan be made “if it appears to the Secretary of State that it is expedient to do so for the purpose of avoiding (a) any inconsistency with current national policies …, or (b) any detriment to the interests of an area outside Greater London” (see section 337 of the Greater London Authority Act 1999).

London First’s Sarah Bevan, who played a crucial role at the examination, representing the interests of London First members, has prepared a good summary of the inspectors’ findings.

The inspectors conclude that subject to recommended modifications the plan meets the tests of soundness and provides an appropriate basis for the strategic planning of Greater London. However, some of the conclusions and recommended modifications will not have made welcome reading for the Mayor and his team, for instance in relation to:

Viability

The inspectors identify that the viability assessment work underpinning the plan is broadly acceptable but has shortcomings, particularly in relation to specialist housing for the elderly and purpose built student accommodation, and the assumptions about the redevelopment of sites with currently operating supermarkets. The inspectors are not persuaded that “these forms of development would be viable if they are required to meet all of the policy requirements in the Plan”. (paragraphs 80 and 81).

“To be effective in London, the approach to viability at the planning application stage set out in current national policy and guidance will require consideration of the viability evidence supporting both the London Plan but also the relevant local plan. In other words, it is only where there is an up to date local plan in place supported by appropriate viability evidence, that we would expect full weight to be given to the assumption that planning applications that fully comply with all relevant development plan policies are viable.” (paragraph 24).

Small sites strategy realism and overall housing target

The inspectors recommend that the overall housing target should be reduced due to given that the target for what can be achieved from small sites is “aspirational” and “not realistic”. “In some cases the imposition of such large increases in this element of the target is heavy-handed and not helped by the lack of detailed engagement with the boroughs in deciding the small site capacity methodology. As some suggested a more nuanced approach might have borne fruit.” (paragraph 165).

Green belt

The inspectors’ “inescapable conclusion…that if London’s development needs are to be met in future then a review of the Green Belt should be undertaken to at least establish any potential for sustainable development. Therefore we recommend that this Plan include a commitment to a Green Belt review [PR35]. This would best be done as part of the next London Plan. Given its strategic nature and to ensure consistency the review should be led by the Mayor and should involve joint working with authorities around the administrative boundary as well as the boroughs. This would form the basis for the Mayor to consider Green Belt release as a means to deliver housing and industrial development that cannot be accommodated in the existing built up area or in adjoining areas.” (paragraph 457).

The inspectors also recommend amending the policies that preclude boroughs reviewing green belt boundaries applying the “exceptional circumstances” test and that seek refusal for development proposals that would cause harm to the green belt without reference to the “very special circumstances” test.

Airports, fracking

The inspectors identify policies, such as those in relation to Heathrow and other airports and in relation to fracking, which are inconsistent with national policy or in relation to which there is insufficient justification.

So what stance will the Mayor take towards these recommendations? There has been a certain scepticism on the part of many potential participants in the process, borne of what has happened with previous versions of the plan, that, no matter what the recommendations, those which are unpalatable to the Mayor will not be accepted.

Particularly with the Mayoral election process looming, it is perhaps unsurprising that this is how it may well play out. He has already come out with some pretty hostile comments, reported in a Guardian piece on 21 October 2019: Sadiq Khan to fight government attempt to water down green policies.

The prospects of a new adopted London plan before the 7 May 2020 Mayoral election appear to be fading fast, although it will be interesting to see the extent to which the existing ministerial team at MHCLG are prepared to stand up for the inspectors’ green belt approach.

The inspectors’ conclusions will also have implications for authorities outside London, in the rest of the south east, many of which are green belt authorities already failing to plan to meet local housing needs:

“If London cannot accommodate all of its development needs, the most significant strategic issue facing the wider South East for the coming decades will be how and where to accommodate that growth outside London in a way that will contribute towards achieving sustainable development. Many representors, with a wide variety of interests, have argued that this could and should be achieved. However, it is clear from past experience and evidence about increasing development pressures that areas in the wider South East outside London already face, that there are no easy solutions or clearly identified potential growth locations. Furthermore, it is apparent from the representatives from the South East England Councils, East of England Local Government Association and individual local authorities outside London that there is limited appetite to consider the possibility of accommodating significant amounts of additional development associated with the growth of London.” (paragraph 111)

Much as every politician tries to avoid the very subject, isn’t green belt the underlying theme of this entire blog post?

Simon Ricketts, 26 October 2019

Personal views, et cetera

Secretary Of State Throws Another Curve Ball

My 15 June 2019 blog post National Lottery: 2 Problematic Recovered Appeal Decisions focused on two appeals dismissed by the Secretary of State against inspectors’ recommendations.

Well, here is another one, in relation to the Chiswick Curve scheme on the Great West Road within the London Borough of Hounslow, the 19 July 2019 decision letter out just before Parliament rises on 25 July (by which date we will have a new prime minister). Another long inquiry (15 days), long delays (the initial application was made over three and a half years ago, the inquiry was a year ago), detailed analysis from an experienced inspector who had heard the evidence and seen the site first hand, ultimately counting for nothing.

The Secretary of State’s decision followed an inquiry held by inspector Paul Griffiths BSc(Hons) BArch IHBC, into appeals by Starbones Limited against the decisions of the London Borough of Hounslow to (i) refuse planning permission for a mixed use building of one part 32 storey and one part 25 storeys comprising up to 327 residential units, office and retail/restaurant uses, basement car and bicycle parking, residential amenities, hard and soft landscaping and advertising consent with all necessary ancillary and enabling works and (ii) refuse to grant advertising consent for 3x digital billboards. The applications were dated 11 December 2015 and amended in October 2016.

The differences of judgment as between the inspector and Secretary of State appeared to boil down to the following:

⁃ The Inspector considered “that the proposal would bring a massive uplift to the area around it” and would be in accordance with various local plan policies. “While the Secretary of State recognises that public realm improvements and the publicly accessible elements of the scheme…do offer some improvement to current conditions, in terms of accessibility and movement, he does not agree that this constitutes the massive uplift as described by the Inspector.”

⁃ Both agreed that the harm to designated heritage assets (the Strand on the Green Conservation Area plus its listed buildings; Kew Green Conservation Area plus its listed buildings; Gunnersbury Park Conservation area plus its listed buildings and Registered Park and Garden, and the Royal Botanic Gardens Kew World Heritage Site plus its listed buildings) would be less than substantial but the Secretary of State disagreed with the inspector’s finding that the public benefits of the proposals would be sufficient to outweigh the harm.

⁃ The Secretary of State disagreed with the Inspector that there would be no conflict with a local plan policy concerning the impact of tall buildings proposed in sensitive locations such as conservation areas, listed buildings and their settings, and World Heritage Sites.

⁃ Accordingly the Secretary of State disagreed with the Inspector and found that the proposals did not comply with the development plan when read as a whole.

⁃ The Secretary of State “considers that the site has a strategic location, and he recognises the constraints and challenges associated with it. While he agrees with the Inspector […] that the proposed design seeks to respond to those challenges in a positive way, he does not find the proposal to be of such high quality as to be a brilliant response to its immediate context. He finds the scale and massing of the proposal to be such that the proposal does not relate to its immediate surrounding. While he recognises that attempts to minimise this impact have been taken with regard to glazing and fins, the building would still dominate the surrounding area. He considers the design to be a thoughtful attempt to respond to the challenges and opportunities of the site, but due to its scale, he disagrees with the Inspector […] that it is a significant benefit of the scheme.”

⁃ The Secretary of State considered that the proposals “would not provide the levels of private and communal amenity space that [the relevant local plan policy] requires. While he has found this to be a limited departure from this policy, the Secretary of State also recognises that the on-site provision, supplemented by the relative proximity of Gunnersbury Park does reduce the weight to be attached to this conflict.”

⁃ Given his finding that the proposals would not be in accordance with the development plan he went on to consider whether whether there were any material considerations to indicate that the proposals should be determined other than in accordance with the development plan. After a detailed analysis in paragraphs 34 to 38 of the decision letter, he concludes:

“Overall, the Secretary of State disagrees with the Inspector […], and finds that the moderate weight to be attached to the benefits of the appeal scheme in terms of housing provision, workspace provision and economic benefits, are not collectively sufficient to outweigh the great weight attached to the identified ‘less than substantial’ harm to the significance of the above heritage assets. He considers that the balancing exercise under paragraph 196 of the Framework is therefore not favourable to the proposal.”

Local MPs Ruth Cadbury (Labour) and Zac Goldsmith (Conservative) were recorded as having objected to the proposal. The objectors appearing at the inquiry included Historic England, the Royal Botanic Gardens Kew and the Kew Society (the first two instructing Richard Harwood QC and James Maurici QC respectively). Russell Harris QC and Richard Ground QC appeared for the appellant and for the London Borough of Hounslow respectively.

I note that on 19 July 2019, the Secretary of State also refused, against his inspector’s recommendation, Veolia’s called in application for planning permission for an energy recovery facility in Ratty’s Lane, Hoddesdon, Hertfordshire.

The Secretary of State accepted that there is an “urgent and pressing need” for the facility, that there is “no obvious alternative site”. “Given the urgent and pressing need, the Secretary of State considers that the provision of an ERF with sufficient capacity to accommodate the waste demands of the county carries substantial weight in favour of the proposal, and the climate change benefits of the proposal also carry substantial weight”. However, he considered that in view of the fact that the proposal was contrary to the development plan and there were unresolved concerns over highways matters, together with “significant adverse landscape and visual impacts”, the application should be refused. I thought that “need” means “need” but there we go.

Not much getting past this Secretary of State is there? An inference of his recent letter to the Planning Inspectorate (see my 13 July 2019 blog post Less Than Best Laid Plans: Political Pragmatism) might be that he considers that inspectors may on occasion be too robust in their examination of local plans and yet an inference of his approach on recovered appeals and call-ins might be that he considers that on occasion inspectors are not robust enough in assessing development proposals that are before them at inquiry. For my part, neither inference would be justified.

Simon Ricketts, 20 July 2019

Personal views, et cetera

Far Far Away: Slade Green SRFI

Two years after my 6 May 2017 blog post Slow Train Coming: Strategic Rail Freight Interchanges In The South East, progress remains slow.

I referred in my blog post to the ongoing saga of the Howbury Park (now known as Slade Green), strategic rail freight interchange scheme promoted initially by Prologis (who obtained a, now time expired, permission on appeal in 2007) and now by Roxhill.

The site straddles the boundaries of the London Borough of Bexley and Dartford Borough Council. (The effective boundary is the River Cray, with the elements of the scheme within Dartford’s administrative boundaries being an access road and bridge over the river). At the time of my blog post, Dartford had resolved to refused planning permission. Bexley had resolved to grant planning permission but the Mayor of London was considering whether to intervene.

The Mayor on 17 July 2017 directed Bexley to refuse the application, on this ground:

“The proposal is inappropriate development in the Green Belt and very special circumstances have not been demonstrated which would clearly outweigh the harm to the Green Belt by reason of inappropriateness, and any other harm. The development is therefore contrary to Policy 7.16 of the adopted London Plan 2016 and the National Planning Policy Framework 2012.”

Dartford’s reasons for refusal additionally related to the likely effects of additional traffic on air quality and congestion detrimental to the quality of life of the community in Deptford.

Roxhill appealed. The appeals were recovered for the Secretary of State’s own determination on 7 November 2017 for the reason that they related to proposals for significant development in the Green Belt. An inquiry was held over 18 days between June and September 2018.

The Secretary of State issued his decision letter on 7 May 2019. He dismissed the appeals. He found that the scheme was not in accordance with the relevant development plans. “He has gone on to consider whether there are material considerations which indicate that the proposal should be determined other than in accordance with the development plan.

25.In this case the Secretary of State considers that the harm to the Green Belt from inappropriate development carries substantial weight against the scheme and the effect on the character and appearance of the local area carries significant weight along with the adequacy of the proposed rail link and the effect on existing/future passenger rail services. Significant weight is also given to the effect on the convenience of highway users.

26.The Secretary of State considers that the provision of social economic benefits of the scheme has overall limited weight and the resulting net biodiversity gain has moderate weight.

27.The Secretary of State considers that the benefits of the scheme do not outweigh the harm to the Green Belt by reason of inappropriateness and any other harm, and so very special circumstances do not exist. He considers that the adverse impacts of the proposal significantly and demonstrably outweigh the benefits. Overall, he considers that there are no material considerations which indicate that the proposal should be determined other than in accordance with the development plan.

28.The Secretary of State therefore concludes that the appeal is dismissed, and planning permission is refused.”

In terms of the availability of alternative sites:

“18.The Secretary of State agrees with the Inspector that in the 2007 decision it was identified that there was no alternative development site, a finding which attracted considerable weight in favour of that scheme (IR4.2). However, since 2007 the London Gateway, a brownfield site not located in the Green Belt, has been developed. For the reasons given in IR15.8.18 to 15.8.24, the Secretary of State agrees with the Inspector’s conclusions that the London Gateway site has the potential to provide an alternative development option for the provision of a SRFI to serve the same part of London and the South East as the appeals proposal (IR15.8.26)”

The Inspector’s conclusions, set out in section 15 of his report, are also worth delving into.

His findings ahead of his overall conclusions relied upon by the Secretary of State included the following:

“The proposal would have a substantial adverse effect on the openness of the Green Belt and the introduction of this massive development beyond the built limits of Slade Green would constitute urban sprawl.”

“[G]iven the requirement of the NPSNN [National Policy Statement on National Networks] that ‘as a minimum, a SRFI should be capable of handling 4 trains per day’, it follows that in order for the proposed rail link to be considered ‘adequate’, it would be necessary for it to be capable of accommodating 4 trains/day as a minimum…Based on the evidence presented, in my judgement, the number of trains that could be pathed to/from the appeals site, having regard to the current timetable, would be likely to fall well short of 4 per day (each way)”

“Unlike the circumstances in 2007, there is no longer a formally identified requirement for 3 or 4 SRFIs around London [4.2, 7.2.6, 8.5.1, 11.2.12, 11.2.14.f.]. The Government approach set out in the NPSNN is to support the realisation of the forecast growth by encouraging the development of an expanded network of large SRFIs across the regions [11.2.9]. Furthermore, ‘…SRFI capacity needs to be provided at a wide range of locations…There is a particular challenge in expanding rail freight interchanges serving London and the South East’. ”

“Overall, I am content that there is a need and market for SRFIs to serve London and the South East [11.2.2-3]. I turn then to consider the extent to which the appeals scheme would be likely to meet the requirements of SRFIs set out in the NPSNN. ”

However, “the appeals scheme would not be well qualified to meet the identified need for SRFIs to serve London and the South East”

“[T]he appellant’s ‘very special circumstances case’ included the assertion that ‘no alternative development options exist for SRFIs to serve this part of London and the South East…this represents a material consideration of very considerable weight’ ”

“London Gateway, a brownfield site, has the potential to provide an alternative development option for the provision of a SRFI to serve the same part of London and the South East as the appeals proposal. Under these circumstances, even if the appeals scheme was also well qualified to meet that need, in my view, the weight attributable to this would be limited.”

Finally, the inspector also had significant concerns in relation to the traffic modelling that had been relied upon by the local authorities, including Transport for London and concluded that “the residual cumulative impact of the development on the local road network would be severe, with particular reference to congestion.”

How uncertain, expensive and slow this process is. And how valuable it would be have been to have kept the 2007 Howbury Park permission alive.

Simon Ricketts, 11 May 2019

Personal views, et cetera

VIP, Biscuits: 2 More Refusals For Major Projects In London

“Getting messy isn’t it?” was how I ended my 26 January 2019 blog post The Secretary Of State & London.

Two more decisions to note since that blog post:

VIP Trading Estate and VIP Industrial Estate, Charlton

I suspect that this is the first example of a London Mayor calling in an application for his own determination and refusing it. In the final month of his mayorality in April 2016, Boris Johnson had agreed to defer a decision in relation to Bishopsgate Goodsyard, faced with an officer’s recommendation to refuse the application (it ended up never being determined). But Sadiq Khan’s flip flopping over Leopard Guernsey Anchor Propco Limited’s application to the London Borough of Greenwich for planning permission to redevelop the VIP Trading Estate and VIP Industrial Estate, Charlton has been quite something else.

This is a scheme that started off as comprising 975 dwellings , together with non-residential floorspace, in buildings ranging from nine to 28 storeys. Following consultation responses and comments from the Mayor in his stage 1 referral report, the 28 storey tower was removed and the amount of housing reduced to 771.

Greenwich officers recommended approval but on 9 July 2018 committee members resolved to refuse it on five grounds, namely overdevelopment, insufficient proportion of family sized housing, lack of a safe access to the business premises next door (a building known as Imex House that houses Squeeze’s Glenn Tilbrook’s studio) and introduction of noise sensitive uses, failure to make appropriate replacement employment floorspace provision and daylight/sunlight deficiencies.

Having considered his officers’ stage 2 report dated 13 August 2018, the Mayor called in the application for his own determination. The report sets out the various improvements that would be sought to the proposals as part of the call in process.

Various amendments were negotiated and secured. Officers’ stage 3 report was published for the representation hearing held on 29 January 2019. The report recommended approval.

But then the bombshell at the end of the representation hearing. Despite having intervened to prevent Greenwich members refusing the application against their officers’ recommendations six months previously, and despite amendments to the scheme proposals having been negotiated to officers’ satisfaction, presumably in line with the Mayor’s instructions (if not, was he not paying attention or something?), the Mayor then announces that he is refusing the application. His reasons for refusal published a few days later on 4 February 2019 in part bear a marked resemblance to those of Greenwich’s planning committee: poor design; unsatisfactory relationship with Imex House and introduction of noise sensitive uses; failure to make appropriate replacement employment floorspace provision, and absence of a section 106 agreement to secure affordable housing and other obligations (I’m not sure whether this is a purely procedural reason for refusal or he was actually not satisfied with the affordable package negotiated by his officers: 35%, rising to 40% with grant).

I have no views on the scheme itself, and I accept that of course he must have an open mind during the representation hearing, but what a waste of six months! He says in the letter setting out his reasons for refusal that he “called in this application to subject it to further scrutiny” but that is a poor excuse. He was surely looking to use the particularly useful Mayoral call in power in order to squeeze some further enhancements from the scheme so that, when that had been done by his officers to his satisfaction, he could approve it. In turning it down, where does that leave his officers? And given that applicants are unable to engage with the man himself, can they now be sure that what they are being told by his team is necessary to secure approval will indeed be sufficient?

Bermondsey Biscuit Factory and Bermondsey Campus Site

The decision of the London Borough of Southwark at its planning committee meeting on 6 February 2019 to refuse planning permission for Grosvenor’s 1,342 dwelling build to rent scheme in Bermondsey is another one to be aware of. Members followed the recommendations in the officers’ report, the main reason being that Grosvenor’s affordable housing package was unacceptable, comprising, in summary, that 27.37% of the habitable rooms would be let at an average discount of 25% below market rents, with usual early and late stage viability review mechanisms. (The application indicated that “the depth of discount across the affordable units could vary, with greater discounts offered on some units, but this would require higher rents (up to 80% of market rents) on others to ensure that the overall level of discount does not exceed 25% overall. Grosvenor has described the sum equating to a 25% discount as the ‘subsidy pot’ and suggested whilst this could be distributed in a variety of ways, the impact of the DMR cannot exceed the financial value of that ‘subsidy pot’ “).

The Mayor of London had flagged in his stage 1 report: “Whilst the proposed increase in housing supply is strongly supported, in the absence of an independently verified viability position the proposed 27% provision of affordable housing is unacceptable. The applicant must deliver deeper DMR discounts, including London Living Rent”

Southwark took an equivalent position but the report to committee is interesting in the way that it (1) transparently sets out the differences between the viability work carried out by the parties’ respective viability consultants (GVA – in old money, now Avison Young – having advised the council after the publication of the Mayor’s stage 1 report) and (2) highlights the differences in build to rent (referred to as PRS, private rental sector, in the committee report) affordable housing policy approach in two dimensions: at GLA vs borough level, and as between adopted and emerging plans. Not an unfamiliar position for any developer but particularly difficult for those promoting build to rent (which is, after all, strongly supported in principle by MHCLG and the Mayor of London) as a relatively new product in terms of determining the appropriate approach to affordable housing.

The viability differences are nicely summarised by Mike Phillips (ex Property Week editor) in his 4 February 2019 Bisnow piece Grosvenor’s Bermondsey Rejection Is A Microcosm Of London’s Affordable Housing Quandary.

As to the complexities arising from varying policy approaches to build to rent, a few extracts from the committee report:

⁃ “London Plan policies 3.11 and 3.12 and draft London Plan Policy H5 seek to maximise the delivery of affordable housing, with the draft London Plan seeking delivery against a strategic target of 50%. Policy H6 of the draft London Plan and the Affordable Housing and Viability SPG prescribe a threshold approach to affordable housing to incentivise swift delivery, and draft London Plan Policy H13 applies this principle to ‘build to rent’ products. In this case, a minimum of 35% affordable housing threshold applies.”

⁃ The Mayor’s affordable housing and viability SPG “recognises that Discount Market Rent is an appropriate tenure within PRS developments and considers that the rent level for DMR should be pegged at London Living Rent levels, for households with incomes up to £60,000. The guidance requires affordable housing to be secured in perpetuity, and in addition requires a clawback mechanism if the wider PRS homes are sold out of the Build to Rent sector within 15 years. The clawback is intended to respond to the different financial model applied to the PRS sector and to ensure the developer does not benefit financially if the homes are converted to market sale.”

⁃ The borough’s core strategy “requires that a minimum 35% affordable housing is provided on all residential developments of 10 or more units, with a tenure split in the Bermondsey area of 70:30 social rent: intermediate homes. Applications would be subject to viability assessments if policy compliance is not being offered, with the expectation that as much affordable housing will be provided as is financially viable. The Core Strategy makes no specific reference to PRS housing.”

⁃ The submission version of the New Southwark Plan “requires the affordable ‘DMR’ housing to be secured in perpetuity, and the overall housing development to be secured within the rental sector for at least 30 years” [contrast with the Mayor’s 15 year requirement] with a changed tenure split of 15% social rent and 20% DMR at London Living Rent [contrast to GLA position where it can all be London Living Rent DMR]

Clearly it is going to be key for the parties to resolve their difficulties over viability, whether that requires changes to the scheme or an appeal. This was a decision taken against up to date government guidance on the approach to viability appraisals, the work was relatively transparent and there was not a major difference of principle over benchmark land value. The reality is that the process is not straightforward; there are issues of judgment, particularly when dealing with a relatively untested business model and the need to estimate the rents that will be achievable in an area that will have been significantly changed by way of development. After that, the tenure split question is surely economically subsidiary, although clearly on-site social rented housing will come at greater cost to the scheme’s viability in a number of ways and so there are political choices to be made.

More widely

I’m not sure whether the Secretary of State had either scheme specifically in mind, when he threw his own political pebble into the pond, as reported in the Planner on 31 January 2019: Brokenshire tells GLA to step up (https://www.theplanner.co.uk/news/brokenshire-tells-gla-to-‘step-up’ ). People in glass houses…

In the meantime, the examination continues into the draft London Plan. Hearing sessions are currently considering housing issues, with MHCLG participating. The Just Space website is a useful unofficial resource in relation to the examination, with links to each written statement for each session together with thumbnail-sketch type notes of the session itself.

Lastly, as a postscript to my 26 January 2019 blog post, it has now been reported that Croydon Council as well as possibly the Mayor are supporting Thornsett Group’s challenge of the Secretary of State’s Purley Baptist Church call-in decision.

Still messy, isn’t it?

Simon Ricketts

Personal views, et cetera

Peek Frean biscuits, from Bermondsey.

The Secretary Of State & London

The Secretary of State wrote last year to the Mayor of London: “I am not convinced your assessment of need reflects the full extent of housing need in London to tackle affordability problems. I have listened carefully to yours, and others, representations, and I am clear that the public interest lies with ensuring you deliver the homes London needs, including in the short term, as quickly as possible.”

Do we see this same message being delivered in his recent interventions?

None of this is news to regular readers of Planning magazine but I give you:

Purley Baptist Church site, Croydon

A scheme by Thornsett Group and Purley Baptist Church for the “demolition of existing buildings on two sites; erection of a 3 to 17 storey development on the ‘Island Site’ (Purley Baptist Church, 1 Russell Hill Road, 1-4 Russell Hill Parade, 2-12 Brighton Road, Purley Hall), comprising 114 residential units, community and church space and a retail unit; and a 3 to 8 storey development on the ‘South Site’ (1-9 Banstead Road) comprising 106 residential units, and associated landscaping and works.”

Supported by the London Borough of Croydon and by the Mayor. But opposed by, amongst others, Conservative MP Chris Philp (Croydon South). The application was called in on 12 April 2017 and, despite inspector David Nicholson recommending approval, refused by the Secretary of State in his decision letter dated 3 December 2018, essentially on design and heritage grounds:

26. Given his serious concerns about the design of the scheme as set out above at paragraphs 13 to 15, for the reasons given above the Secretary of State does not consider that the application is in accordance with the development plan overall. He has gone on to consider whether there are material considerations which indicate that the proposal should be determined other than in accordance with the development plan.

27. In favour, the scheme will provide 220 new homes which he considers should be given significant weight. The Secretary of State also affords significant weight to the benefits to Purley District Centre arising as a result of the regeneration of the site. The provision of a new church and greatly enhanced community facilities are also benefits, to which the Secretary of State gives moderate weight. He considers the level of affordable housing and the potential effects on air quality to be neutral in the planning balance.

28. Against the scheme, however, the Secretary of State gives substantial weight to the poor design of the South Side proposals, and to the height and proportions of the tower set out in paragraphs 13 to 15 above, which he considers not to be in accordance with relevant policies in the development plan.

29. The Secretary of State has also considered whether the identified ‘less than substantial’ harm to the significance of Purley Library and surrounding Conservation Areas is outweighed by the public benefits of the proposal. In accordance with the s.66 LBCA duty, he attributes considerable weight to the harm the significance of Purley Library. However, he considers that the benefits of the scheme, as set out in Paragraph 22 of this letter, are insufficient to outbalance the identified ‘less than substantial’ harm to the significance of Purley Library and surrounding conservation areas. He considers that the balancing exercise under paragraph 196 of the Framework is therefore not favourable to the proposal.”

It always feels slightly odd when the Secretary of State, on a desk-based examination of a set of papers, and following a public inquiry, considers it appropriate to overrule the judgment of local planning authority, Mayor and inspector in relation to these sorts of issues

I understand that the decision has been challenged in the High Court by the applicants.

Sir William Sutton Estate, Royal Borough of Kensington and Chelsea

By contrast, a scheme opposed both by RBKC (which refused permission) and by the Mayor for “demolition of the existing [Sir William Sutton] estate (Blocks A-K, N and O) and ancillary office; delivery of 343 new residential homes comprising of 334 apartments and 9 mews within buildings of 4-6 storeys; provision of Class D1 community floorspace with associated café; new Class A1-A5 and B1 floorspace; creation of new adopted public highway between Cale Street and Marlborough Street; new vehicular access from Ixworth Place; creation of new basement for car parking, cycle parking and storage; new energy centre fuelled by CHP, and works to adjacent pavement“.

The developer, Clarion Housing Group (formerly Affinity Sutton Homes Limited), appealed. Curiously, the appeal was only recovered by the Secretary of State for his own determination on 1 May 2018, just over a week before the start of the inquiry. By his decision letter dated 18 December 2018 the Secretary of State accepted his inspector’s recommendation and dismissed the appeal.

The main issue was in relation to the level of affordable housing proposed. After the appeal was submitted, the appellant had attempted to improve the position with changes to the scheme:

“The key changes relate to the quantum of social rented housing and the number of mews houses. The Revised Scheme proposes 2,825 m2 more social rented floorspace, an increase from 237 to 270 social rented homes. The 9 private mews houses would be removed and replaced with social rented flats. Elements of the building design would be changed. The Revised Scheme results in an increase in the overall number of homes from 343 to 366.

The non-residential floorspace in the Appeal Scheme and the Revised Scheme would be the same in respect of Classes A1-A3 and B1 workspace, but there would be a decrease in the community floorspace in the Revised Scheme.”

However, applying ‘Wheatcroft‘ principles (“the main, but not the only, criterion on which… judgment should be exercised is whether the development is so changed that to grant it would be to deprive those who should have been consulted on the changed development of the opportunity of such consultation”) the Secretary of State, agreeing with the recommendation of his inspector, refused to consider the revised scheme due to concerns as to the adequacy of the consultation that had been carried out. (One legitimate criticism was of “skewed” questioning of the public in a Feedback Form which asked “Do you support the proposals to amend the scheme to provide 33 additional homes for social rent?“, although I have seen similarly skewed questioning in MHCLG consultation documents…).

The Secretary of State did not accept the appellant’s position as to whether there was existing affordable housing on the site:

“vacation of a property by a Registered Provider as a preliminary step towards estate renewal cannot reasonably be a basis for disregarding that floorspace for the purposes of affordable housing policy. He further agrees, for the reasons given at IR206-218, that the AS fails to comply with the ‘no net loss’ element of development plan policy.”

He considered that for the same reason the benchmark land value for the purposes of viability appraisal should be “based on the current situation, that is based on social housing development, as the Council contends.”

He concluded that the appeal scheme failed “to satisfy the policy aims of no net loss of social housing and maximum reasonable provision, largely for reasons related to the way in which the exiting [sic] vacant units of social housing are treated.”

Newcombe House, Notting Hill

Still in RBKC and back to the saga of Newcombe House. As summarised in my 18 June 2017 blog post, an appeal in relation to the proposed development of the site had been rejected by inspector David Nicholson (as of the Purley Baptist Church site case above). The refusal had partly been on similar grounds to the dismissal of the Sir William Sutton Estate appeal.

A new scheme was brought forward by the developer, Notting Hill KCS Limited, for “demolition of existing buildings and redevelopment to provide office, 46 residential units, retail uses, and a flexible surgery/office use, across six buildings (ranging from ground plus two storeys to ground plus 17 storeys), with two-storey basement together with landscaping to provide a new public square, ancillary parking and associated works.”

RBKC resolved to refuse the new application on 31 January 2018, on townscape, heritage and affordable housing grounds. On 26 March 2018 the Mayor of London intervened and took over the application. The applicant varied the scheme to increase the humber of homes and amount of affordable housing and the Mayor resolved to approve it on 18 September 2018 subject to completion of a section 106 agreement.

However, following representations by RBKC, the local residents group and Emma Dent Coad MP, the Secretary of State has issued a holding direction so that he can consider whether to call in the application for his own determination.

Kensington Forum Hotel

Another RBKC saga. An application by Queensgate Bow Propco Limited for the redevelopment of the Kensington Forum Hotel for “comprehensive redevelopment and erection of a part 30, part 22 and part 7 storey building comprising hotel bedrooms and serviced apartments (Class C1) with ancillary bar, restaurants, conferencing and dining areas, leisure facilities and back of house areas; residential accommodation (Class C3); with associated basement, energy centre, plant, car parking, cycle parking, refuse stores, servicing areas; associated highway works and creation of new publicly accessible open space with associated hard and soft landscaping“. The scheme included 46 homes.

On 27 September 2018 RBKC resolved to refuse planning permission – as with Newcombe House on townscape, heritage and affordable housing grounds. As with Newcombe House, the Mayor of London intervened and took over the application, on 5 November 2018.

This time however RBKC has issued proceedings for judicial review, seeking to quash the Mayor’s decision to take over the application. From the 7 December 2018 pre-action letter it appears that the grounds are (1) alleged errors of fact as to the number of homes which RBKC has recently delivered and (2) a failure to take into account RBKC’s programme for building new homes (including homes for social rent).

In the meantime it is reported that the Secretary of State has, again as with Newcombe House, issued a holding direction so that he can consider whether to call in the application for his own determination.

Getting messy isn’t it?

Simon Ricketts, 26 January 2018

Personal views, et cetera

The Purley scheme, image from inspector’s report

An Update On CIL: Reform Promised, Meanwhile Continuing & Increasingly Expensive Uncertainties

Well done for getting past the heading.

Someone recently asked me whether the Government ever changes its proposals as a result of a consultation process. For an example of just such a thing, I was able to point to the Government response to supporting housing delivery through developer contributions: a summary of consultation responses and the Government’s view on the way forward (29 October 2018). The proposals set out in the Government’s March 2018 consultation paper (summarised in my 10 March 2018 blog post Developer Contributions, CIL, Viability: Are We Nearly There Yet?) have been modified significantly as a result of consultation, mostly for the better in my view at least.

This blog post focuses on the changed proposals and then looks at some looming issues facing phased developments in areas where charging authorities are looking to increase rates (I’m focusing on the Mayor of London’s MCIL2 but I’m sure the issue is of wider application).

The Government response

The document acknowledges some of the flaws of the current system:

“The complexity and uncertainty of the current system of developer contributions is acting as a barrier to the delivery of housing. The system does not react quickly to changes in market conditions or allow local authorities to effectively secure the contributions needed to support new development. It is also not as transparent as it should be; local communities are not clear what infrastructure is provided alongside new development. And the current system could also be more effective in securing funding towards strategic infrastructure and supporting cross boundary planning.”

The Government intends to consult on draft regulations “later this year” to implement the changes set out in the March 2018 consultation document, as now modified. It is important to note that the Government will “also consider whether changes could be made to the Community Infrastructure Levy to incentivise the build out of developments.” (perhaps something that Sir Oliver Letwin might have looked at but…).

The Government has now modified its proposed changes as follows:

1. The previous proposal to replace charging authorities’ current statutory consultation requirements, in relation to proposed charging schedules, with self-certification as to whether it has sought “an appropriate level of engagement” has been amended. The Government “intends to take forward a modified proposal to ensure that regulations continue to require charging authorities to consult on draft charging schedules, whilst removing the current statutory requirement for two separate rounds of consultation in every circumstance.”

2. The pooling restriction will now be removed in its entirety in all areas. Hooray! Although of course there is the risk that tariff-type section 106 contribution requirements will again become more prevalent, in my view the pooling restriction led to many unnecessary problems and uncertainties, which would have continued under the Government’s March 208 idea of only removing the restriction in in areas where specified criteria were met.

3. The Government had intended to introduce a two month grace period for developers to submit a commencement notice in relation to exempted development, to address disproportionately severe problems arising for eg self-builders who, if they fail to meet procedural requirements, find not only that they fail to qualify for any exemption but that all CIL due has become immediately payable. The Government will not now introduce the grace period (which local authorities considered could lead to practical complications) but instead will be “making changes to the penalties associated with the failure to submit a Commencement Notice prior to development being started. This will ensure that any penalty is set at a proportionate level and will not result in the whole liability becoming payable immediately.”

There may also be more guidance as to potential exemptions: “A number of responses sought additional exemptions to address the unintended viability impacts of Levy liabilities on particular forms of development. The Government will consider how guidance could be used to manage these effects by encouraging authorities to take account of these issues when setting Levy rates and choosing how they use existing powers for discretionary social housing relief. In addition, the Government has already committed to bring forward legislation to exempt Starter Homes from the Community Infrastructure Levy.”

4. The complicated proposal in the March 2018 consultation document that charging schedules might be set with reference to the existing use of land has been dropped. “However, the Government has reviewed this proposal and considers there are existing flexibilities in the Community Infrastructure Levy Regulations that, through the use of differential Levy rates, will allow local authorities to go some way towards achieving the objective of the proposed reform. The Government therefore proposes to make changes to guidance to support local authorities to set differential rates more effectively.”

5. At the time that it publishes the draft amendment regulations, the Government intends to “consult on changes to indexation of Levy rates and the way in which it would be implemented“. Its current preference is to index CIL rates “for residential development to the House Price Index using local-level data on an annual basis” and to index rates for non-residential development to the Consumer Price Index. It recognises the transitional issues that will arise.

6. The Government still intends to remove the restriction in relation to section 106 obligations that relate to an infrastructure project or type of infrastructure that is set out in the authority’s Regulation 123 list. “New reporting standards, which are set out in the Infrastructure Funding Statement, will address concerns about double dipping by ensuring that there is transparency over how developer contributions from both CIL and section 106 planning obligations are being used, rather than by placing formal restrictions in regulations.” We need to watch this one with care!

In relation to one specific issue that often leads to wrangles: “The Government also recognises the need to address existing uncertainty around using section 106 planning obligations to collect monitoring sums. The Government therefore intends to take forward proposals to make clear that local authorities can seek a fee from applicants towards monitoring planning obligations. In developing these proposals, the Government will consider how best to ensure that monitoring sums are set at an appropriate level.”

7. The Government had intended to give combined authorities and joint committees with strategic planning powers the ability to charge a Strategic Infrastructure Tariff. “The Government has decided to take forward a modified proposal, to enable Combined Authorities with strategic planning powers to take forward a Strategic Infrastructure Tariff, and to encourage groups of charging authorities to use existing powers to more effectively support the delivery of strategic infrastructure through the pooling of their local Community Infrastructure Levy receipts. In the longer term, the Government will bring forward proposals for allowing joint planning committees to charge the tariff, and will review options for giving other groups the power to levy a Tariff.”

The Government had also included a final “catch all” question seeking any other comments. Particular issues that were raised in responses included “the definition of gross internal area, implementation of the Levy in particular circumstances (such as in relation to development that takes place in a number of phases or there is a change of use), and the operation of exemptions and reliefs, indexation and in-kind payment.”

Issues such as these are indeed causing much uncertainty.

The implications of increased rates/MCIL2

Whilst we wait for eventual reform of the system, of more immediate focus are the implications of gradual increases by charging authorities in CIL rates.

In London, the Mayor of London is waiting for the inspector’s report following the examination into the draft charging schedule for MCIL2. MCIL2 is proposed to part-fund Crossrail 2, in the way that MCIL1 (together with a related policy of seeking section 106 contributions in relation to some areas and types of development) is part-funding Crossrail 1.

The charging schedule for MCIL1 was adopted on 1 April 2012 (which is why there are many section 106 agreements and permissions dated March 2012, as developers and boroughs scrambled to ensure that permissions were not subject to the levy!).

This table sets out borough by borough the significant sums of money that MCIL1 has now raised:

The section 106 contributions policy for Crossrail (set out in the Mayor’s Crossrail Funding SPG, updated March 2016) predated MCIL1 and provided for section 106 contributions based on the following table and plans:

The standardised wording included in relevant section 106 agreements provides that any MCIL1 which is payable reduces the contributions which are required to be made under the relevant section 106 agreement.

As long as the inspector’s report is received on time and gives it a clean bill of health, MCIL2 will be adopted on 1 April 2019. The changes in rates, compared to where the 2012 rates currently sit with indexation applied, are mostly not huge, but they are significant in some areas. In areas where the increases are material, I am sure we will see a similar rush to beat the deadline.

One uncertainty is of course whether the examination inspector will accept a charging schedule that is predicated on Crossrail 2 coming forward. Little has progressed on the project since my 1 July 2017 blog post, Crossrail 2: Where Are You? We are all still awaiting outcome of an independent affordability review being chaired by Mike Gerrard. The Mayor is hedging his bets, simply indicating:

“Should the Crossrail 2 project not be taken forwards, the Mayor would be able to apply the MCIL 2 proceeds to fund other strategic infrastructure.”

Assuming that MCIL2 is waved through and the charging schedule is adopted on 1 April, the relevant point at which it takes effect is determined by everyone’s least favourite phrase in the CIL Regulations: “at the time planning permission first permits the chargeable development“.

For a non-phased permission, this is the date of the permission – easy.

For a phased outline permission, this is either “the date of final approval of the last reserved matter associated with that phase” or “if earlier, and if agreed in writing by the collecting authority before commencement of any development under that permission, on the day final approval is given under any pre-commencement condition associated with that phase“.

For a phased full permission, this is either “the day final approval is given under any pre-commencement condition associated with that phase” or “where there are no pre-commencement conditions associated with that phase, on the day planning permission is granted“.

It will be seen that (1) the revised charging schedule is liable to bite in respect any phase of an existing phased permission if sufficient progress has not been made in relation to reserved matters or discharging pre-commencement conditions in relation to that phase and (2) that there are inherent uncertainties in the drafting, eg

⁃ What does “associated with that phase” mean?

⁃ Does “any” mean “any” or, in fact, “all“?

As a final example of the inadequacies of the legislation: where there is a phased permission and a revised charging schedule is subsequently adopted, the only indexation that applies is of the amount arising from the initial charging schedule up to the end of the year prior to the date of the permission. There is no further indexation through to commencement of development or any indexation of the revised charging schedule insofar as it applies to the phases! Would it not be simpler and more predictable if indexation were not to stop at the initial grant of the permission and instead to continue through to final approval (or even commencement of development) in relation to each phase, but if the potential application of revised charging schedules were removed?

In case anyone has made it down this far…

In conclusion:

⁃ the proposed reforms, and most recent proposals, look to be mainly positive

⁃ but the whole regime really does still need simplifying: to state the obvious, significant liabilities can unexpectedly arise for the unwary – and large sums of money can turn on uncertain issues of interpretation.

Simon Ricketts, 9 November 2018

Personal views, et cetera

In A Cycle Superhighway In The Sky

The high ambition on the part of successive London Mayors since 2008 to create a network of (mostly) segregated cycleways across London has often been controversial and often impeded due to differences arising with individual boroughs.

Cyclists, please put me right if I have got any of this this wrong but I think there are now eight operational routes:

CS1 – Tottenham to the City

CS2 – Aldgate to Stratford

CS3 – Barking to Tower Gateway

CS3 (East-West) – Lancaster to Tower Hill

CS5 – Oval to Pimlico

CS6 – North-South – Farringdon to Kings Cross (Consultation started on 20 September 2018 on an extension to CS6 between Farringdon and King’s Cross, so that it will run from Elephant & Castle all the way up to King’s Cross.)

CS7 – Merton to the City

CS8 – Wandsworth to Westminster

Further routes have been long planned but are not yet open:

CS4 – London Bridge to Woolwich

CS9 – Hyde Park to Hounslow

CS10 – Cricklewood to Marble Arch

CS11 – West Hampstead to Hyde Park Corner

For more detail see London Cycling Campaign’s website.

The Mayor announced on 30 January 2018 that design work would begin on six new routes, namely:

• Lea Bridge to Dalston – 3km route between Lea Bridge Road and Cycle Superhighway 1 at Dalston.

• Ilford to Barking Riverside – 8km route between the town centres of Ilford and Barking.

• Hackney to the Isle of Dogs – 8km route from Hackney to the Isle of Dogs via Canary Wharf, Mile End and Victoria Park.

• Rotherhithe to Peckham – 4km route to connect with connect other cycling routes such as Quietway 1 and the proposed Cycle Superhighway 4.

• Tottenham Hale to Camden – 8km route covering seven junctions identified as being among the 73 with the worst safety records.

• Wembley to Willesden Junction – 5km route, north-west London’s
first major cycle route, connecting Wembley, Stonebridge Park and Willesden Junction.

Works to convert road carriageways to a cycleway do not amount to development requiring planning permission if they fall within section 55(2)(b) of the Town and Country Planning Act 1990: “the carrying out on land within the boundaries of a road by a highway authority of any works required for the maintenance or improvement of the road but, in the case of any such works which are not exclusively for the maintenance of the road, not including any works which may have significant adverse effects on the environment“.

In R (The Licensed Taxi Drivers Association) v Transport for London (Patterson J, 10 February 2016) the LTDA sought a declaration that the construction of the East-West Cycle Superhighway without planning permission constituted a breach of planning control.

This was rejected by Patterson J:

“...whether the proposals cause significant adverse environmental effect is not for the court to decide. As Sullivan J (as he then was) said in R v Rochdale Metropolitan Borough Council ex parte Milne [2001] 81 P&CR 27 at [106] to [108] the issue of environmental effect is an issue which requires an exercise of planning judgment which is not for the court. The issue for the court is whether the defendant erred in its contention or was irrational in reaching the conclusion that the works for the EWCS did not cause significant adverse environmental effect and did not require planning permission. For reasons that I have set out I am satisfied that the defendant on the evidence before it at the relevant time, did not err in law and was not irrational in reaching its conclusion that there was no significant adverse environmental effect from the proposals as a whole.”

Whether or not planning permission is required, on the facts, for any proposed cycleway, traffic regulation orders are required. Where the road is part of the local highway network rather than a TfL road, TfL needs the agreement of the relevant borough in order to secure all necessary orders. This was what of course recently scuppered TfL’s proposed pedestrianisation of Oxford Street.

The TfL road network:

Westminster City Council has also now successfully challenged TfL’s proposed construction of CS11, designed to run between Swiss Cottage and Portland Place, in R (City of Westminster) v Transport for London (Sir Ross Cranston, 13 September 2018), having taken over proceedings commenced by a group of local residents. Two parts of the route are on roads for which Westminster City Council is the statutory highway authority. Planning permission from the council is also potentially required for works proposed within Regent’s Park. The Council succeeded in its claim that TfL’s decision to proceed with constructing part of the route should have taken into account the legally relevant consideration that TfL might fail to obtain the necessary consents from Westminster City Council in relation to part of the route. TfL’s justification had assumed that the route would be constructed in its entirety and did not consider whether a phased approach would be viable.

It’s difficult entirely to blame the Mayor for these delays in rolling out CS routes. The control held by individual boroughs can be difficult to work around – RBKC having been another particularly intransigent authority – which makes delivery of these, by definition, cross-borough schemes slow and difficult.

Despite the wider strategic benefits of cycling in terms of health and air quality, the TRO statutory process can often be seen by local people as inadequate to protect their particular interests in relation to, for instance, the effects caused by displaced traffic or the implications for them of roads being closed to motor vehicles – leading to adversarial positions being taken.

But whatever the rights or wrongs in relation to CS11 or indeed in relation to the proposed pedestrianisation of Oxford Street, I find it disappointing to see such public disagreements between the Mayor and Westminster City Council. After all, no one wants a London version of the Gallagher brothers.

Simon Ricketts, 23 September 2018

Personal views, et cetera