National Lottery: 2 Problematic Recovered Appeal Decisions

The exercise of the Secretary of State’s power to call in applications and recover appeals for his own determination is inherently politically charged.

This blog post focuses on two recent recovered appeals. The other reverse lottery, of call in, is for another day.

The Secretary of State’s policy as to recovering appeals is handily summarised in section 6 of the House of Commons briefing paper Calling-in applications (England).

Wavendon, Woburn Sands

If anyone thinks that the Secretary of State’s intervention in this case did anything other than, at the request of a fellow MP, frustrate or delay the delivery of homes in accordance with national policy, and in so doing place unjustified financial pressure on an SME housebuilder, then do let me know.

This relates to a relatively small proposal for the development of 203 homes at Woburn Sands, Buckinghamshire. The application was made to Milton Keynes Council in July 2016 and refused in December 2016, against officers’ recommendations.

The developer, Storey Homes, appeals. An inquiry takes place over six days in July 2017, with an extremely experienced inspector, David Cullingford.

The proposal is locally controversial, with various objectors appearing at the inquiry, including three councillors. I can only assume that objectors are spooked by the way the inquiry goes because in August 2017 the councillors then ask the then planning minister to recover the appeal for the Secretary of State’s own determination. The request is refused. But they don’t stop there.

As reported at the time in MK Citizen (2 November 2017) local Conservative MP Iain Stewart then writes a billet doux to the then Secretary of State:

The letter […] starts with ‘Dear Sajid’, and thanks him for his “kind” email on Mr Stewart’s election to the government’s transport committee.

It states: “I implore you to intervene in any way you can to at least delay the announcement of the Inspector’s decision.”

It ends: “Yours ever, Iain

Anyway the charm works, and the appeal is recovered on 31 October 2017.

There is then an elongated period of post-inquiry correspondence. The most significant issue was whether Milton Keynes Council could show five years’ housing supply or whether the NPPF tilted balance applied. All the evidence points to the position being as shown by the appellant at the inquiry – less than five years’ supply.

It turns out that the objectors were right to be worried by the way the inquiry had gone. When the Secretary of State published his decision letter on 5 December 2018, they could see that the inspector in his 2 February 2018 report had indeed recommended that the appeal be allowed, finding that there was less than five years’ housing supply and that taking all considerations into account he considered “that the planning balance in this case is firmly in favour of the scheme. The benefits of this sustainable housing proposal would significantly and demonstrably outweigh the adverse impacts elicited.”

But hey never mind, babychams all round, Mr Stewart’s intervention had done the job for the objectors because the Secretary of State’s decision was to reject the inspector’s recommendation and dismiss the appeal. On the basis of some not fully explained calculations, the Secretary of State determined that there was indeed five years’ supply: “Taking all these factors into consideration, he considers that on the basis of the evidence put forward at this inquiry, estimated deliverable supply is roughly in the region of 10,000– 10,500. The Secretary of State therefore considers that the housing land supply is approximately 5.9–6.2 years. He notes that on this basis, even if the emerging plan figure of 1,766 were used (1,854 with a 5% buffer added), as the agent proposes, there would still be an estimated deliverable housing land supply of over 5 years.”

This conclusion of course meant that the tilted balance in what is now para 11(d) of the 2019 NPPF did not apply, “the policies which are most important” for determining the appeal were not automatically to be treated as out of date and he could therefore find that the proposal “conflicts with development plan policies relating to development outside settlement boundaries and density. He further considers that it is in conflict with the development plan as a whole.

The Secretary of State considers that the housing benefits of the scheme carry significant weight and the economic benefits carry moderate weight in favour of the proposal.

The Secretary of State considers that the low density of the appeal proposal carries significant weight against the proposal, while the location in unallocated open countryside outside the development boundary of Woburn Sands carries moderate weight, and the impact on the character of the area carries limited weight. He further considers that the minimal harm to the listed building carries little weight and that the public benefits of the scheme outbalance this ‘less than substantial’ harm. The heritage test under paragraph 196 of the Framework is therefore favourable to the proposal.

The Secretary of State considers that there are no material considerations which indicate the proposal should be determined other than in accordance with the development plan. He therefore concludes that the appeal should be dismissed, and planning permission should be refused.”

Many would have given up this apparent lottery at that point, but all credit to Storey and to their legal team, Peter Goatley and James Corbet Burcher (No 5 chambers) together with Stephen Webb (Clyde and Co). The decision was duly challenged in the High Court and has now been quashed by Dove J in Wavendon Properties Limited v Secretary of State (Dove J, 14 June 2019)

The judge found the Secretary of State’s reasoning to be inadequate in relation to the critical question as to whether there was five years’ supply of housing land:

“All of these factors lead me to the conclusion that the reasons provided by the First Defendant in relation to the figure were not adequate in the particular and perhaps unusual circumstances of this case. By simply asserting the figures as his conclusion, the First Defendant has failed to provide any explanation as to what he has done with the materials before him in order to arrive at that conclusion, bearing in mind that it would have been self-evident that it was a contentious conclusion. Simply asserting the figures does not enable any understanding of what the First Defendant made of the Inspector’s conclusions which he accepted in paragraph 17 of the decision letter, and how they were taken into account in arriving at the final figures in his range.

“I accept the Claimant’s submission that the need for the range to be in some way explained is not requiring reasons for reasons, it is simply requiring reasons for a conclusion which was pivotal in relation to the application of the tilted balance in this case, and which derived from figures which had not been canvassed as an answer to the question of what the Second Defendant’s housing land supply was anywhere in any of the material before the First Defendant prior to the decision letter.”

In passing, there are two other interesting aspects to the judgment:

1. An analysis of what is meant in paragraph 11(d) of the NPPF, when, separate from questions of five years’ supply, you are considering whether “the policies which are most important for determining the application are out-of-date“. Unsurprisingly, Dove J concluded that this is “neither a rule nor a tick box instruction. The language does not warrant the conclusion that it requires every one of the most important policies to be up-of-date before the tilted balance is not to be engaged. In my view the plain words of the policy clearly require that having established which are the policies most important for determining the application, and having examined each of them in relation to the question of whether or not they are out of date applying the current Framework and the approach set out in the Bloor case, an overall judgment must be formed as to whether or not taken as a whole these policies are to regarded as out-of-date for the purpose of the decision.

2. The judge’s agreement with the Secretary of State that a section 106 planning obligation by the housebuilder to use its reasonable endeavours to build out the development within five years of the council approving the last reserved matters application was not a material consideration to be taken into account. One to return to, once perhaps we see the Government’s promised green paper on measures to improve delivery and other matters.

Of course the housebuilder is not yet out of the woods. Back the appeal will go to the Secretary of State of the day for redetermination as against whatever the housing supply position, and national policy position, happens to be at that time, whenever it will be. The problem doesn’t just lie in the arbitrary nature of the recovery process (it is particularly wrong that appeals can be recovered even after the inquiry has concluded) but with the glacial pace of appeals (until the anticipated brave new world of Rosewell) which means that no-one ever knows what the policy or housing supply/delivery position is going to be when any decision is finally taken, let alone which minister will be sitting at the relevant desk.

I note that an application by the housebuilder for specific disclosure against the Secretary of State did not need to be determined by the judge in the light of his ruling. No doubt this was for civil servants’ internal recommendations to ministers before those decisions were taken in relation to the appeal, including potentially its recovery in the first place. Now wouldn’t that make interesting reading?

Sainsbury’s, Cambridge Heath Road

Last week we saw another decision by the Secretary of State to dismiss an appeal against the recommendations of his inspector. This was the decision letter dated 10 June 2019 in relation to an appeal by Sainsbury’s following the non-determination by the London Borough of Tower Hamlets of its application for planning permission for “a replacement Sainsbury’s store, an ‘explore learning’ facility, flexible retail/office/community floorspace, 471 residential units arranged in 8 blocks, an energy centre and plant at basement level, 240 ‘retail’ car parking spaces and 40 disabled car parking spaces for use by the proposed residential units, two additional disabled units proposed at Merceron Street, creation of an east-west public realm route from Cambridge Heath Road to Brady Street and public realm provision and enhancements, associated highway works to Brady Street, Merceron Street, Darling Row and Collingwood Street and Cambridge Heath Road“.

Again, an experienced inspector, David Nicholson, had recommended approval in a nuanced report, following a lengthy inquiry. There was one issue where clearly he was not convinced by the proposals, namely the location of the affordable housing within the scheme:

In describing the main entrance to the AH as poor doors, it drew attention not only to the simple design but also to the position of these at the north end of the scheme. Unlike the private units, this would put them at the greatest walking distances from public transport, shops and services. The podium barrier would not only divide the types of tenure, but also separate the amenity and play space areas as well as extend the walking distances (although access to these could be addressed through condition 43). Although more than one witness was questioned on this, no persuasive explanation was given as to why the units were separated in this way.”

The inspector pragmatically recommended that if the Secretary of State were to share these concerns “then he should seek an alternative arrangement through a further s106 Agreement“.

To a very small extent this concern was addressed by the revised s106 Agreement which would include a few shared ownership units on the other side of the proposed barrier. Nevertheless, the location of vast majority of the AH, including all the rented housing, would be both at the far end of the site and altogether rather than integrated, and this counts heavily against the benefits of the AH“.

The Secretary of State in his decision letter appears to agree with almost all of the inspector’s conclusions but the “poor doors” concern appears to be the tipping point:

The Secretary of State has further considered the fact that the social rented housing is positioned at the north end of the scheme, at the greatest walking distance from public transport, shops and services, and that the podium barrier would not only divide the types of tenure, but also separate the amenity and play space areas. He notes the Inspector’s comment that no persuasive explanation was given as to why the units were separated in this way (IR11.33). He agrees with the Inspector that to a very small extent this would be addressed by the inclusion of a few shared ownership units on the other side of the proposed barrier, and has taken into account that condition 43 requires the measures for providing access to be approved. Nonetheless the location of the vast majority of the affordable housing, including all the rented housing, would be both at the far end of the site, and all together rather than integrated (IR11.34).

In assessing the implications of this, the Secretary of State has taken into account that the Framework aims not just to deliver raw housing numbers, but to achieve healthy, inclusive and safe places (paragraph 91). He considers that the separation of the affordable housing, amenity and place space areas is not in keeping with the aims of paragraph 91(a) to achieve inclusive places that promote social interaction, including opportunities for meetings between people who would not otherwise come into contact with each other. The Secretary of State considers that this carries substantial weight against the proposal.

The Secretary of State has considered the Inspector’s comment at IR11.33 that if the Secretary of State shares his concerns, then he should seek an alternative arrangement through a further s.106 agreement. However, the Secretary of State notes that previous concerns about this matter which were addressed by a revised s.106 agreement only resulted in the inclusion of a few shared ownership units on the other side of the proposed barrier (IR11.34). He therefore considers that a seeking more fundamental changes via further revisions to the s.106 agreement is unlikely to be successful. He has also taken into account that other matters also weigh against a grant of permission. Overall he does not consider that a ‘minded to allow’ letter would be an appropriate approach in this case.”

He dismisses the appeal.

Whatever the rights and wrongs of the proposal itself, was it right not to give the appellant a short opportunity to complete a further section 106 agreement so as to address this concern? On the one hand it could have led to an appropriate form of development that would deliver much needed housing. Or it could all have proved too much for the appellant to swallow, or too complicated without scheme changes, in which case at least the opportunity would have been given.

Presumably the scheme will now be reworked, at significant expense and delaying any start on site.

I thought we were in a housing crisis – more, better, faster? And yes of course the developer could have got the scheme “better” to begin with but no doubt with a hit to viability and therefore potentially the amount of affordable housing to be provided – that’s the balance.

But is there really no room for procedural solutions such as this? Or, in the case, of Woburn Sands, de-recovery?

Simon Ricketts, 15 June 2019

Personal views, et cetera

Beauty

How can the planning system seek to achieve “beautiful” buildings and places?

What is beauty? How do you arrive at objectivity in matters largely of subjective judgment? Is the customer always right (and who is the customer)?

These thoughts were prompted this week by a few things:

⁃ The resolution of the Corporation of London’s Planning and Transportation Committee on 2 April 2019 to grant planning permission for the Tulip following officers’ recommendations. The application will now be referred to the Mayor who will need to decide whether to intervene (whether by call in or by directing refusal). His stage 1 report dated 14 January 2019 set out his initial concerns.

Obituaries of Bill Heine, responsible for the Headington shark. Is there any inspector’s decision letter with a better passage than this (when allowing an appeal against an enforcement notice)?

“It is not in dispute that this is a large and prominent feature. That was the intention, but the intention of the appellant and the artist is not an issue as far as planning permission is concerned. The case should be decided on its planning merits, not by resorting to “utilitarianism”, in the sense of the greatest good to the greatest number. And it is necessary to consider the relationship between the shark and its setting…. In this case it is not in dispute that the shark is not in harmony with its surroundings, but then it is not intended to be in harmony with them. The basic facts are there for almost all to see. Into this archetypal urban setting crashes (almost literally) the shark. The contrast is deliberate … and, in this sense, the work is quite specific to its setting. As a “work of art” the sculpture (“Untitled 1986”) would be “read” quite differently in, say, an art gallery or on another site. An incongruous object can become accepted as a landmark after a time, becoming well known, even well loved in the process. Something of this sort seems to have happened, for many people, to the so-called “Oxford shark”. The Council is understandably concerned about precedent here. The first concern is simple: proliferation with sharks (and Heaven knows what else) crashing through roofs all over the City. This fear is exaggerated. In the five years since the shark was erected, no other examples have occurred. Only very recently has there been a proposal for twin baby sharks in the Iffley Road. But any system of control must make some small place for the dynamic, the unexpected, the downright quirky. I therefore recommend that the Headington shark be allowed to remain.”

⁃ a nagging awareness that I probably need to cover the Government’s “Building Better, Building Beautiful” initiative in one of these blog posts.

Section 12 of the July 2018 NPPF sought to give more weight, in plan making and decision taking, to design considerations – see MHCLG’s press release Government’s new planning rulebook to deliver more quality, well-designed homes (24 July 2018) and there is more detailed guidance in the PPG. The press release, as with so many Government announcements, focused on the relevance of the policy changes to the construction of new homes.

Is poor design one reason why new development is often not accepted by communities? That’s the thesis leading to James Brokenshire’s announcement on 3 November 2018 of the Building Better Building Beautiful Commission, chaired by Professor Sir Roger Scruton.

The Commission has three aims:

1. To promote better design and style of homes, villages, towns and high streets, to reflect what communities want, building on the knowledge and tradition of what they know works for their area.

2. To explore how new settlements can be developed with greater community consent.

3. To make the planning system work in support of better design and style, not against it.

The commission has five commissioners:

• Sir Roger Scruton (Chair)

• Gail Mayhew

• Mary Parsons

• Nicholas Boys Smith

• Kim Wilkie

It also has an impressive list of “specialist advisors”:

• Stephen Stone, Executive Chairman of Crest Nicholson

• Sunand Prasad, Senior Partner and co-founder of Penoyre & Prasad and past President of the RIBA

• Ben Bolgar, Senior Director of Prince’s Foundation

• Dame Fiona Reynolds DBE, Master of Emmanuel College, Cambridge

• Adrian Penfold OBE, Advisor in Planning and Public Affairs

• Peter Studdert, Chair of Quality Review Panels for the LLDC and LB of Haringey

• Patrick James, Founding Director of The Landscape Agency

• Paul Monaghan, Director of AHMM and Design Council Trustee

• Yolande Barnes, Professor of Real Estate at UCL

The deadline for the Commission’s call for evidence is 31 May 2019.

This “Building Beautiful” initiative, ironically as with the resi PD rights initiative where there no controls over matters of aesthetics and design, has its roots in think tank the Policy Exchange. The Policy Exchange published Building More, Building Beautiful: How design and style can unlock the housing crisis by Jack Airey, Sir Roger Scruton and Sir Robin Wales, and with a foreword by James Brokenshire, in July 2018. It published a collection of essays on the design, style and economics of the built environment Building Beautiful in January 2019.

Stating the position neutrally, it is right to record that the initiative, and Scruton, have their detractors, such as Robert Bevan in the London Evening Standard – I wouldn’t build my dream home in joyless, moralistic Scrutopia (25 January 2019):

The beauty commission has emerged from a report called Building More, Building Beautiful, by Policy Exchange, a Right-of-centre think tank. One of its three authors was Scruton himself. From its cover onwards — a drawing of Georgian houses that gets the historical details all wrong — it has been many decades since a more ludicrous or ignorant report on architecture was published.”

What on earth is going to come from this process?

The visual appearance of new homes is a curious thing. Largely a private sector product with paying consumers, why are we the public often not satisfied with what the market produces, even when the direct customers appear to be?

I won’t reveal the house builder, but there was a piece this week on the BBC website about a couple who had bought their “dream home” but were dissatisfied with a number of defects in its construction. I looked at the photo below with its wrong proportions, verge/garden, largely blank side flank and clay coloured rendering, and initially wondered how a such an ugly, presumably not cheap, house could be anyone’s dream. But beauty is in the eye of the beholder – it’s a new detached home with garden, and home ownership has been promoted by successive governments as to what we should aspire.

(Photo: BBC)

The aesthetic appearance of a new car is probably the only element of its design or function that is not subject to prescriptive regulation and requirements for testing. But it is plainly critical for car makers to invest in the visual appearance of the product, so as to attract the consumer for whom the car will be an extension of the personality that he or or she wishes to express, emphasising qualities such as speed or ruggedness, elegance or urban quirkiness.

So why is the new housing market apparently so different? Is there a lack of choice such that we’re still at Model T Ford “any style as long as it looks like a child’s drawing of a detached house and garden“? Or is it the case, more likely, that the products that we see are those that have been proven to sell? In which case, aren’t there dangers in trying to funnel house builders towards a different approach?

If different products would make it more likely for permission to be obtained and for homes to be built and sold, why hasn’t this been achieved by operation of the market? What is the overlap with the Letwin “delivery” initiative (see my 3 November 2018 blog post Oliver’s Twist: Letwin’s Proposals For Large Housing Sites)?

It is all very well for the Commission’s first aim to refer to local styles of building but where is the architectural integrity in adopting a particular local building style as pastiche simply to gain community buy-in? Surely beauty simply comes from producing well-proportioned good quality buildings with a form that reflects their function (can we ban fake chimneys?) and with as much attention paid to space and landscape as built form? Do we really need the Scuton Commission or indeed any more prescriptive planning policies? Simply assess schemes against those principles, at outline and reserved matters stages, and make sure that there is no room for post-permission dumbing down. And ensure that there is a properly functioning, competitive house building market. Start with getting the market right, not the detailed design requirements (only local stone here, even though it has to be shipped in from abroad).

After all, whilst planners love to arrive at quasi-objective ways of assessing largely subjective matters (needs must, I suppose) and the tools for doing that are getting ever better (for instance, primarily in an urban context, vu.city and Cityscape Digital), save where particularly justified surely we should restrict the role of the state in telling us what we are going to find beautiful? Heritage decisions based on assessment of architectural quality are difficult. Decisions in relation to NPPF paragraph 79(e) (the green light for proposed isolated homes in the countryside where the design is of “exceptional quality” in that it is “truly outstanding or innovative, reflecting the highest standards in architecture..”) are difficult. It is quite something to appoint a planning committee or inspector as cultural arbiter on our behalf and to expect their decisions not to be underpinned, consciously or unconsciously, by political or social priorities and assumptions.

I still like that shark. Jury out on Tulip.

Simon Ricketts, 6 April 2019

Personal views, et cetera

NPPF & PPG In Court

Hanging over me all week was a deadline for preparing a legal update about the NPPF. Then, thank you judges, just like London buses but with more barristers on board, along came three interesting cases.

Is the NPPF subject to the requirements of SEA?

The question as to whether the latest version of the NPPF required strategic environmental assessment was the question before Dove J in Friends of the Earth v Secretary of State (Dove J, 6 March 2019).

 

You will recall that requirements of the SEA Directive apply to plans and programmes which are “required by legislative, regulatory or administrative provisions” and which “set the framework for future development consent of projects”.

 

The Government argued that neither applied in the case of the NPPF. It was always going to be a stretch to argue that the, er,  Framework does not set the framework for the future development consent of projects and the judge wasn’t going to accept that. But he did conclude that due to the Framework’s curious, non-statutory, legal basis it could not be said to be required by legislative, regulatory or administrative provisions and therefore SEA was not required: “there is in reality nothing by way of any formal provisions which might be said to govern or regulate the production of the Framework“.

Incidentally, I had always assumed that fear of being caught by SEA requirements was one reason why the NPPF has remained so determinedly non-spatial but, on Dove J’s reasoning, even an NPPF with spatial policies would not require SEA.

Was consultation on the draft NPPF legally inadequate in relation to fracking?

The hearing in relation to Stephenson v Secretary of State (Dove J, 6 March 2019), a claim brought on behalf the Talk Fracking campaign group, immediately followed the Friends of the Earth hearing and one of its grounds (ground 3) was covered by the previous case. The other grounds focused on the new NPPF’s pro-fracking paragraph 209(a):

Minerals planning authorities should:
a) recognise the benefits of on-shore oil and gas development, including unconventional hydrocarbons, for the security of energy supplies and supporting the transition to a low-carbon economy; and put in place policies to facilitate their exploration and extraction
.”

Ground 1 contended that “the Defendant unlawfully failed to take into account material considerations, namely scientific and technical evidence, which had been produced following the adoption of a Written Ministerial Statement by the Secretary of State for Business and Energy and Industrial Strategy and the Defendant on 16th September 2015 (“the 2015 WMS”)

Ground 2 contended that “the Defendant failed, in publishing the policy in paragraph 209(a) of the Framework, to give effect to the Government’s long-established policy in relation to the obligation to reduce green-house gas emissions under the Climate Change Act 2008“.

Ground 4 contended that “the Defendant failed to carry out a lawful consultation exercise in relation to the revisions to the Framework which were published on 24th July 2018.”

Dove J started with ground 4, because “at the heart of the dispute” was the questions as to “what the Defendant was doing when incorporating paragraph 209(a) into the Framework or, more particularly in relation to Ground 4, what a member of the public engaging in the consultation process and reading the publicly available material as a reasonable reader, would have concluded the Defendant was doing“. The issues “cannot be disposed of by simply considering the Defendant’s private intentions“. In the documentation there was no suggestion that the merits or substance of the policy represented by the 2015 WMS were outside the scope of the consultation.

By contrast with what the reasonable reader would have discerned from the publicly available material, the Defendant had a closed mind as to the content of the policy and was not undertaking the consultation at a formative stage. The Defendant had no intention of changing his mind about the substance of the revised policy. Further, the Defendant did not conscientiously consider the fruits of the consultation exercise in circumstances where he had no interest in examining observations or evidence pertaining to the merits of the policy. This had the effect of excluding from the material presented to the Minister any detail of the observations or evidence which bore upon the merits of the policy. Given my conclusion as to what the reasonable reader would have concluded from the publicly available documentation the consultation exercise which was undertaken was one which involved breaches of common law requirements in respect of consultation and which was therefore unfair and unlawful.

Ground 1 accordingly also succeeded: it was unlawful to fail to take the Talk Fracking material into account in decision making as to the final form of the NPPF, given that it was clearly relevant to the questions posed. “The fact that the Defendant believed that he was taking a far more narrow and restricted decision from that which he had advertised to the public does not provide a basis for avoiding that conclusion.

Ground 2 failed, but on the basis of reasoning which may be helpful to the anti-fracking community, in that the judge accepted the Secretary of State’s submission that “in individual decisions on plans or applications the in principle support for unconventional hydrocarbon extraction, provided by paragraph 209(a) of the Framework, will have to be considered alongside any objections and evidence produced relating to the impact of shale gas extraction on climate change. These are conflicting issues which the decision-maker will have to resolve.”

The judge has not yet determined the appropriate relief (ie what should be done) to give effect to his judgment. But surely we are now likely to see further consultation as to paragraph 209(a) and potentially another tweaked NPPF in due course. NPPFs are also now coming along like buses.

What is the legal status of Planning Practice Guidance?

This question was relevant in Solo Retail Limited v Torridge District Council (Lieven J, 4 March 2019) as it went to complaints about the approach taken by a local planning authority to retail impact assessment, in a challenge by one value retailer to a planning permission granted to a competitor. The complaint was that the guidance in the PPG has not properly been followed.

Of course if there is doubt as to the legislative, regulatory or administrative basis for the National Planning Policy Framework, that doubt is accentuated in the case of the Government’s subsidiary Planning Practice Guidance.

The judge found that the NPPF and the local development plan were not prescriptive as to the form of retail impact assessment required to be carried out. The claimant therefore had to fall back on the detailed steps for assessment set out in the PPG.

However:

In my view the NPPG has to be treated with considerable caution when the Court is asked to find that there has been a misinterpretation of planning policy set out therein, under para 18 of Tesco v Dundee. As is well known the NPPG is not consulted upon, unlike the NPPF and Development Plan policies. It is subject to no external scrutiny, again unlike the NPPF, let alone a Development Plan. It can, and sometimes does, change without any forewarning. The NPPG is not drafted for or by lawyers, and there is no public system for checking for inconsistencies or tensions between paragraphs. It is intended, as its name suggests, to be guidance not policy and it must therefore be considered by the Courts in that light. It will thus, in my view, rarely be amenable to the type of legal analysis by the Courts which the Supreme Court in Tesco v Dundee applied to the Development Policy there in issue.

These points are illustrated the paragraphs of the NPPG that are most relevant in this case. Paragraph 015 says that “the impact test should be undertaken in a proportionate and locally appropriate way…” However, paragraph 017 says “The following steps should be taken in applying the impact test…”. Taken at face value these words would seem to suggest that the following elements are mandatory where there is a policy requirement for any form of impact test. However, in my view that cannot be the case. There is a judgement for the LPA as to what level of scrutiny of possible impact is appropriate in the particular circumstances of the proposal, taking into account the need to be proportionate. Paragraph 017 therefore cannot and should not be interpreted and applied in an overly legalistic way as if it was setting out mandatory requirements.”

A reminder not to interpret the PPG legalistically. There may be internal inconsistencies within it. Guidance means guidance.

Simon Ricketts, 9 March 2019

Personal views, et cetera

Delivery!

MHCLG’s announcements this week have clarified three separate issues which go to whether the “tilted balance” in paragraph 11(d) of the NPPF applies in relation to applications for planning permission for housing development.

Where the tilted balance applies, Government policy is of course that planning permission should be granted unless:

(i) the application of policies in this Framework that protect areas or assets of particular importance [being specific categories of policies set out in footnote 6 to the NPPF] provides a clear reason for refusing the development proposed; or

(ii) any adverse impacts of doing so would significantly and demonstrably outweigh the benefits, when assessed against the policies in this Framework taken as a whole.”

Two situations where the tilted balance applies are:

⁃ “where the local planning authority cannot demonstrate a five year supply of deliverable housing sites” with an appropriate buffer percentage of 5%, 10% or 20% calculated by reference to paragraph 73 of the NPPF; and

⁃ “where the Housing Delivery Test indicates that the delivery of housing was substantially below [a defined percentage of] the housing requirement over the previous three years” the defined percentage being 25% in the case of Housing Delivery Test results published in November 2018, 45% in the case of results published in November 2019 and 75% in the case of results published in November 2020 and thereafter. (Additionally, the authority needs to publish an action plan where the delivery percentage is less than 95%, “to assess the causes of under-delivery and identify actions to increase delivery in future years“).

Paragraph 177 of the 2018 NPPF disapplies the presumption in favour of sustainable development (and therefore the possibility of the tilted balance applying) where the project requires appropriate assessment under the Conservation of Habitats Regulations, which has proved problematic following the Court of Justice of the European Union’s judgment in People Over Wind, which led to far more projects requiring appropriate assessment.

This week’s announcements have clarified three things:

1. How “deliverable” is defined for the purposes of that first situation.

2. The presumption in favour of sustainable development is no longer disapplied if there is a negative appropriate assessment.

3. What the November 2018 Housing Delivery Test results are for in relation to each English local planning authority (the results not having been, er, delivered on time by MHCLG).

After a long wait, and initial indications that this would all be done before Christmas, on 19 February MHCLG published:

Government response to technical consultation on updates to national planning policy and guidance

housing delivery test 2018 measurement

further revised NPPF

The revisions to the NPPF are limited but care will be needed when referring to decisions and court rulings to be clear as to the relevant policy basis: the 27 March 2012 NPPF, the 24 July 2018 NPPF or the 19 February 2019 NPPF.

What is deliverable?

Footnote 11 to the 2012 NPPF defined “deliverable” as follows:

To be considered deliverable, sites should be available now, offer a suitable location for development now, and be achievable with a realistic prospect that housing will be delivered on the site within five years and in particular that development of the site is viable. Sites with planning permission should be considered deliverable until permission expires, unless there is clear evidence that schemes will not be implemented within five years, for example they will not be viable, there is no longer a demand for the type of units or sites have long term phasing plans.”

The degree of probability required, given the words “realistic prospect“, was considered by the Court of Appeal in St Modwen Developments Ltd v Secretary of State (Court of Appeal, 20 October 2017), where Lindblom LJ said this:

35…Deliverability is not the same thing as delivery. The fact that a particular site is capable of being delivered within five years does not mean that it necessarily will be. For various financial and commercial reasons, the landowner or housebuilder may choose to hold the site back. Local planning authorities do not control the housing market. NPPF policy recognises that…


37… Had the Government’s intention been to frame the policy for the five-year supply of housing land in terms of a test more demanding than deliverability, this would have been done…


38 The first part of the definition in footnote 11—amplified in paras 3–029, 3–031 and 3–033 of the PPG—contains four elements: first, that the sites in question should be ” available now”; second, that they should “offer a suitable location for development now”; third, that they should be ” achievable with a realistic prospect that housing will be delivered on the site within five years”; and fourth, that “development of the site is viable ” (my emphasis). Each of these considerations goes to a site’s capability of being delivered within five years: not to the certainty, or—as Mr Young submitted—the probability that it actually will be. The second part of the definition refers to “[sites] with planning permission”. This clearly implies that, to be considered deliverable and included within the five-year supply, a site does not necessarily have to have planning permission already granted for housing development on it. The use of the words “realistic prospect” in the footnote 11 definition mirrors the use of the same words in the second bullet point in paragraph 47 in connection with the requirement for a 20% buffer to be added where there has been “a record of persistent under delivery of housing”. Sites may be included in the five-year supply if the likelihood of housing being delivered on them within the five-year period is no greater than a “realistic prospect”—the third element of the definition in footnote 11 (my emphasis). This does not mean that for a site properly to be regarded as “deliverable” it must necessarily be certain or probable that housing will in fact be delivered upon it, or delivered to the fullest extent possible, within five years.”

The wording in glossary to the 2018 NPPF was made more specific:

“”Deliverable: To be considered deliverable, sites for housing should be available now, offer a suitable location for development now, and be achievable with a realistic prospect that housing will be delivered on the site within five years. Sites that are not major development, and sites with detailed planning permission, should be considered deliverable until permission expires, unless there is clear evidence that homes will not be delivered within five years (e.g. they are no longer viable, there is no longer a demand for the type of units or sites have long term phasing plans). Sites with outline planning permission, permission in principle, allocated in the development plan or identified on a brownfield register should only be considered deliverable where there is clear evidence that housing completions will begin on site within five years.”

Due to concerns as to potential ambiguity (which I didn’t really see) as to the treatment of non-major development (ie developments of less than ten homes, with a site area of less than 0.5 hectares), the wording has now been changed in the 2019 NPPF to read as follows

“Deliverable: To be considered deliverable, sites for housing should be available now, offer a suitable location for development now, and be achievable with a realistic prospect that housing will be delivered on the site within five years. In particular:

a)  sites which do not involve major development and have planning permission, and all sites with detailed planning permission, should be considered deliverable until permission expires, unless there is clear evidence that homes will not be delivered within five years (for example because they are no longer viable, there is no longer a demand for the type of units or sites have long term phasing plans).

b)  where a site has outline planning permission for major development, has been allocated in a development plan, has a grant of permission in principle, or is identified on a brownfield register, it should only be considered deliverable where there is clear evidence that housing completions will begin on site within five years

But there will remain room for argument: “realistic prospect” inevitably requires judgement and the local planning authority’s assessment as to the position of individual sites will always be potentially controversial given its interest (and/or that of objectors to development) in demonstrating an adequate supply so as to avoid the tilted balance. We will no doubt still see cases such as East Cheshire Council v Secretary of State (Deputy Judge Justine Thornton QC, 1 November 2018), East Bergholt Parish Council v Babergh District Council (Sir Ross Cranston, 7 December 2018) and (no transcript available but the link is to a useful Cornerstone summary) R (Chilton Parish Council) v Babergh District Council (Deputy Judge Robin Purchas QC, 2 February 2019.

There has also previously been much uncertainty as to the circumstances in which the new standard method for assessing local housing need should be used as the basis for assessing whether a five year supply of specific deliverable sites exists in the case of a plan with strategic policies which are more than five years old (unless those strategic policies had been reviewed and found not not to require updating). Footnote 37 in the 2019 NPPF makes clear that the standard method should indeed be used (which reflects the 5 February 2019 decision of the Secretary of State in relation to the Edenthorpe Doncaster called in application, blogged about by Lichfields on 21 February 2019).

Appropriate assessment

Hooray, paragraph 177 now reads:

The presumption in favour of sustainable development does not apply where the plan or project is likely to have a significant effect on a habitats site (either alone or in combination with other plans or projects), unless an appropriate assessment has concluded that the plan or project will not adversely affect the integrity of the habitats site.

The Housing Delivery Test

Well, the results are finally in. The housing delivery test 2018 measurement. According to analysis by Savills:

⁃ no authority is subject this time round to the tilted balance by virtue of delivering less than 25% of its housing requirement over the last three years

⁃ 86 out of 326 authorities are subject to the requirement of a 20% buffer on their five year housing land supply figure as a result of having delivered less than 85% of their housing requirement over the last three years

⁃ 107 out of 326 authorities have to prepare an action plan as a result of having delivered less than 95% of their housing requirement over the last three years.

A future blog post will deal with the “need” side of the equation…

Simon Ricketts, 23 February 2019

Personal views, et cetera

Oliver’s Twist: Letwin’s Proposals For Large Housing Sites

Sajid Javid had given Sir Oliver Letwin the following terms of reference for his review into the “build out of planning permissions into homes” that was announced in the Autumn 2017 budget.

The Review should seek to explain the significant gap between housing completions and the amount of land allocated or permissioned in areas of high housing demand, and make recommendations for closing it. The Review should identify the principal causes of the gap, and identify practical steps that could increase the speed of build out. These steps should support an increase in housing supply consistent with a stable housing market in the short term and so that over the long-term, house prices rise slower than earnings. The review will provide an interim report to the Chancellor of the Exchequer and the Secretary of State for Housing, Communities and Local Government in time for Spring Statement 2018 and a full report for Budget 2018.”

Has Letwin’s final report (published alongside the budget on 29 October 2018) twisted itself away from the examination question that he was set? In my view, read as a set along with the previous two stages of his work, it is pretty clear how his thinking has developed. But he has ended up making a surprisingly radical and, to my mind, impractical, set of recommendations that surely will not find traction with this Government and which on any reflection would surely not increase the “speed of build out“. Perhaps due to the deadline he was set, the recommendations in the final report are not accompanied by any evidence. They are also set out in some detail (see for example the tables embedded in a later part of this blog post) at the expense of any commentary on, for example, the proposals to encourage timely delivery that were set out in the February 2017 white paper.

Dear Philip and Sajid

There have been three stages to his work. In his 9 March 2018 letter to the Chancellor and Secretary of State he provided this initial analysis:

The fundamental driver of build out rates once detailed planning permission is granted for large sites appears to be the ‘absorption rate’ – the rate at which newly constructed homes can be sold into (or are believed by the house builder to be able to be sold successfully into) the local market without materially disturbing the market price. The absorption rate of homes sold on the site appears, in turn, to be largely determined at present by the type of home being constructed (when ‘type’ includes size, design, context and tenure) and the pricing of the new homes built. The principal reason why house builders are in a position to exercise control over these key drivers of sales rates appears to be that there are limited opportunities for rivals to enter large sites and compete for customers by offering different types of homes at different price-points and with different tenures.

When a large house builder occupies the whole (or even a large part) of a large site, the size and style (and physical context) of the homes on offer will typically be fairly homogeneous. We have seen examples of some variation in size, style and context on some large sites; but the variations have not generally been great. It has become apparent to us that, when major house builders talk about the absorption rates on a large site being affected by “the number of outlets”, they are typically referring not only to the physical location of different points of sale on the site, but also and more importantly to differences in the size and style (and context) of the products being offered for open market sale in different parts of the site. Even these relatively slight variations are clearly sufficient to create additional demand – and hence additional absorption, leading to a higher rate of build out.

It is also clear from our investigation of large sites that differences of tenure are critical. The absorption of the ‘affordable homes’ (including shared ownership homes) and of the ‘social rented housing’ on large sites is regarded universally as additional to the number of homes that can be sold to the open market in a given year on a given large site. We have seen ample evidence from our site visits that the rate of completion of the ‘affordable’ and ‘social rented’ homes is constrained by the requirement for cross-subsidy from the open market housing on the site. Where the rate of sale of open market housing is limited by a given absorption rate for the character and size of home being sold by the house builder at or near to the price of comparable second-hand homes in the locality, this limits the house builder receipts available to provide cross-subsidies. This in turn limits the rate at which the house builder will build out the ‘affordable’ and ‘social rented’ housing required by the Section 106 Agreement – at least in the case of large sites where the non-market housing is either mixed in with the open market housing as an act of conscious policy (as we have frequently found) or where the non-market housing is sold to the housing association at a price that reflects only construction cost (as we have also seen occurring). If freed from these supply constraints, the demand for ‘affordable’ homes (including shared ownership) and ‘social rented’ accommodation on large sites would undoubtedly be consistent with a faster rate of build out. And we have heard, also, that the demand for private rented accommodation at full open market rents (the scale of which is at present uncertain) would be largely additional to, rather than a substitute for, demand for homes purchased outright on the open market.

The interim report

His interim report in June 2018 then focused on three issues:

• what the build out rate on large sites in areas of high housing demand actually is;

• why the rate of build out on these sites is as it is; and

• which factors would be most likely to increase the rate of build out on these sites without having other, untoward effects.

The interim report is a solid document with strong analysis and a variety of conclusions, one of which being that “if either the major house builders themselves, or others, were to offer much more housing of varying types, designs and tenures (and, indeed, more distinct settings, landscapes and street-scapes) on the large sites and if the resulting variety matched appropriately the desires of the people wanting to live in each particular part of the country, then the overall absorption rates – and hence the overall build out rates – could be substantially accelerated. The policy levers required to bring this about without damaging the economics of individual sites or the financial sustainability of the major house builders are topics for the second phase of my work, on which I shall report at the time of the Budget.”

The final report

And this is precisely what he has sought in part to do in his final report, published alongside the budget on 29 October 2018. I say in part, as there is no real analysis as to whether his proposed policy levers would or would not damage “the economics of individual sites or the financial sustainability of the major house builders“.

Underlying his conclusions seems to be his scepticism as to whether the encouragement in the NPPF for “residential developments to have a mix of tenures, types and sizes which reflect local housing demand (as well as emphasising the importance of good design)“, together with the 2018 NPPF’s requirement for local authorities to encourage the sub-division of large sites, is sufficient to lead to less homogenous development or “the prospect of significant increases in the rapidity of build out on such sites“.

He gives no evidence for this assumption. Even the 2012 NPPF (as now revised) is, after all, still working through into plans and permissions.

Instead of trying to work with the grain of the existing system, he recommends that “the Government should adopt a new set of planning rules specifically designed to apply to large sites. The purpose of these rules should be to ensure that all sites in areas of high housing demand whose size exceeds a certain threshold are subject to an additional form of planning control that requires those owning such sites to provide a diversity of offerings on the site which are able to address the various categories of demand within the local housing market. This, in turn, should ensure that houses can be built at a greater rate than at present on such sites, because the absorption rate for each category of housing will be complementary, yielding, overall, a greater absorption of housing by the local market as a whole in any given period.”

Ahead of a new legislative structure (both primary and secondary legislation) and an annex to the NPPF (I suspect it would take more than an annex – he’s driving a coach and horses through the thing as far as large housing sites are concerned), he envisages that the new rules could first be brought in by a written ministerial statement, secondary legislation and the policy annex. “If, for example, the Government decides to adopt my recommendations at the end of 2018, I suggest that it should be made clear to the owners of existing large sites in areas of high housing demand, and to those who are taking such large sites through the current planning system before commencing works, that the new rules governing planning permission for large sites will come into force at the start of 2021, and will therefore govern any permissions granted for large sites on or after that date.”

The primary legislation would:

” • define large sites both in terms of a size threshold (which might, for example, be set initially at 1,500 units2) and in terms of boundaries (to ensure that a site which is allocated as a single entity in a local development plan qualifies, even if it benefits from a number of different outline planning permissions);

• require local planning authorities, when granting allocations, outline permissions or final planning permissions for any large site or any part of a large site in areas of high housing demand, to comply with the new secondary legislation and the new planning policy relating to large sites – and, in particular, to include within all outline planning permissions for large sites in areas of high housing demand a requirement that ‘housing diversification’ on such sites should be a ‘reserved matter’; and

• establish the principle that all permissions for reserved matters granted in relation to such large sites should contain diversi cation requirements in accordance with the new secondary legislation and the new planning policy for large sites.”

The secondary legislation would:

” • amend the Town and Country Planning (Development Management Procedure)(England) Order 2015 to include type, size and tenure mix (alongside the current provision for prescription of access, appearance, landscaping, layout and scale) as characteristics that can be prescribed as reserved matters for large sites in areas of high housing demand; and

• require any applicant making an outline planning application for a large site or an application for final permission for a phase of a large site in an area of high housing demand to prepare a diversification strategy, specifying the types of diversity that will be exhibited on that site or in the part of the site to which the application refers.”

The new planning policy document would set out the diversification principles that are to apply to such large sites in areas of high housing demand in the future. By diversification, he means, for example, “housing of varying types, designs and tenures including a high proportion of affordable housing“, as well as “more distinctive settings, landscapes and streetscapes“. By all means strengthen the NPPF if further strengthening is needed (is it?) but how much of this is specific to schemes of 1,500 homes plus.

Then it really starts to get weird. Because there will be “scope for disagreement about whether a particular applicant has made a genuine effort to provide sufficient diversity to address multiple markets simultaneously and hence to increase the overall absorption rate and build out rate. Accordingly, in order to minimise recourse to appeal or litigation, I recommend that the Government should establish a National Expert Committee.

The primary purpose of this Committee should be to arbitrate on whether any application that causes a disagreement between the local planning authority and the applicant (and consequently comes to appeal) satisfies the diversification requirement, and is therefore likely to cause high build out rates.

The secondary purpose of the Committee would be to offer informal advice to any developer or local planning authority that was considering a large site application. I recommend that the Housing Secretary should guide local planning authorities to consult the National Expert Committee before approving any such large site application in an area of high housing demand.”

Why on earth would a new quango such as this be created?

For sites that will already have an outline planning permission before 2021, Letwin recommends that there should be financial incentives (ie government funding) for house builders to accept changes to their existing site plans. Developers would enter into a section 106 agreement to document their continued commitment to the diversity requirements. Letwin says that he has taken legal advice and is confident that the “voluntary transaction” that he proposes will prove to be lawful – perhaps, but it would certainly be unusual. Would the local planning authority be a party? Who would enforce?

One Step Beyond

He then goes “one step further” in relation to “large sites that have yet to be allocated within a local authority’s local plan“. He recommends “that the Government should, as part of the new primary legislation, introduce a power for local planning authorities to designate particular sites within their local plans as sites which can be developed only as single large sites and which therefore automatically become subject to the new planning rules for large sites. In addition, I believe that the local planning authority should be empowered to specify, at the time of designation, strong master-planning requirements including a strict design code as well as landscaping and full and specific infrastructure requirements.”

This in part appears to be a device to ensure that “the land value of those sites is not raised as far above the alternative use value as would be the case if a site were allocated in a local plan and subsequently obtained outline permission under our current rules“. But this can already be done by local planning authorities for good planning reasons, where comprehensive development is required for reasons of, for instance, sustainability or viability. Is Letwin going further than that?

What if there is no good planning reason why the site could not be sustainably be built out in parts? And what is indeed a single development? This will all prove hugely contentious. Particularly given that he goes on to indicate that to “ensure that a reasonable balance is struck between promoting the public interest through increased diversity and faster build out rates on the one hand, and proper recognition of the value of the land on the other hand, I recommend that the Housing Secretary (when issuing updated viability guidance alongside the new planning framework) should guide local planning authorities towards insisting on levels of diversity that will tend to cap residual land values for these large sites at around ten times their existing use value.”

No evidence is given as to why the level above which land values would be expropriated by the state without compensation (which, after all, would be the effect of the proposal) is set at 10 x EUV.

Letwin recognises that significant support will be needed from Homes England: “planning rules are by their nature passive and reactive. They can prevent things from happening (if they are properly enforced); but they can only do a very limited amount to encourage applicants to follow the spirit of the rules and hence to achieve fully the outcomes the rules have been created to achieve.”

He then goes on to visualise local authorities being empowered to bring forward sites themselves via a development vehicle, in one of two ways:

(a) the local authority could use a Local Development Company (LDC) to carry out this development role by establishing a master plan and design code for the site, and then bringing in private capital through a non-recourse special purpose vehicle to pay for the land and to invest in the infrastructure, before “parcelling up” the site and selling individual parcels to particular types of builders/providers offering housing of different types and different tenures;”

(b) the local authority could establish a Local Authority Master Planner (LAMP) to develop a master plan and full design code for the site, and then enable a privately nanced Infrastructure Development Company (IDC) to purchase the land from the local authority, develop the infrastructure of the site, and promote a variety of housing similar to that provided by the LDC model described above.

He sees local authorities that use these vehicles being given “clear” compulsory purchase powers over the large sites that the authorities allocate and indicates that “it would also make sense to consider the possibility of giving local authorities such CPO powers in relation to large sites that have been allocated in their local plan in the past but which have not obtained outline permission after a long period has elapsed.”

Even when compulsory purchase compensation values have been reduced by the mechanisms requiring build out as a single site (query how that is defined in practice) and by increasing the required diversity until the 10 x uplift on EUV is not exceeded, will development (with the required diversity) be viable for a local authority to bring forward? Will any authority have the resources for the task? Will non-recourse lending really be available to the extent that would be required? Why would anyone start on the process of promoting a large site for development when it can be snaffled as part of a larger “single site” in this way?

The notions in the report could be read as moving to the public sector the role of strategic land promotion companies, which I suspect (for all that they are maligned) to be responsible for a high proportion of the major housing sites that do come forward at present. So, to misappropriate Kit Malthouse’s recent analogy that he applied to Homes England, we would lose some WD40 in the system: the companies with the incentive to identify sites, assemble them, identify and overcome infrastructure constraints, devise a viable and acceptable form of development, pursue allocation and permission, open up land with strategic infrastructure and dispose of parcels to house builders. And, going back to the original terms of reference, this will “increase the speed of build out“?

I appreciate that this report was delivered to a deadline, which it achieved, but (unlike the previous stages of Sir Oliver’s review) it seems to me to lack any robust evidential basis at all to justify the wholly new structure that it proposes for allocating, permitting and delivering schemes with 1,500 or more dwellings. Nor does the review interest itself with any more practical nudges that could be introduced into the current system. If it just goes on the “nice but radical ideas” shelf, another year will have been wasted, without any real progress towards making practical improvements that might improve build out rates. After all, Homes England is already playing a hugely positive role in unlocking large-scale housing development and indeed on 30 October 2018 published its strategic plan for 2018/2019 – 2022/2023, setting how it intends to go much further to use its “land, money, powers and influence to increase the pace, scale and quality of delivery“. When the Government responds to the Letwin report in early 2019 I will be looking to see whether any measures that are to be taken forward will pragmatically assist Homes England’s practical work – they are the ones rolling up their sleeves on all this.

Lastly, if as a consequence of implementation of these proposals we were to see the private sector focusing its attention on smaller sites, in preference to these sites which can really make a difference in terms of delivering at scale, that would in my view be inconsistent with the brief that was set.

Stick or twist?

Simon Ricketts, 3 November 2018

Personal views, et cetera

PS No sooner had I finished this post and poured some strong coffee than I saw this morning’s announcement that the Secretary of State has appointed Professor Sir Roger Scruton to chair a ‘Building Better, Building Beautiful’ Commission – no-one could criticise the current build out rate of MHCLG when it comes to reports and reviews.

LAMP lighter

MHCLG Consults On A Changed Basis For Assessing Local Housing Need & Other Urgent Repairs

I’m not sure anyone was expecting MHCLG to act quite so quickly to try to mend a number of problems that have been arising from the July 2018 NPPF (although perhaps problems of its own making).

Its technical consultation on updates to national planning policy and guidance (26 October 2018) invites comments by 7 December 2018 on the following:

Local housing need assessment

I referred in my 29 September 2018 blog post OAN Goal to the confusion caused by the publication by the ONS on 20 September 2018 of updated 2016-based household projections that resulted in the national minimum housing need calculated by the NPPF’s standard method falling significantly from data published in September 2017 which had been based on 2014 household projections.

There was widespread concern that the updated figures were not reliable. The Government had indicated that the figures would not lead to a reduction in the national 300,000 new homes target. A revision to the standard method was to be made so that the new household projections did not cause that target to be missed but in the meantime how were authorities to plan?

The consultation paper is unambiguous: the Government has decided that it is not right to change its aspirations and the ONS figures are indeed misleading due to the way that they only draw from two censuses (rather than previous projections based on five censuses) “which focuses it more acutely on a period of low household formation where the English housing system was not supplying enough additional homes“. In addition:

⁃ “Household projections are constrained by housing supply

⁃ “The historic under-delivery of housing means there is a case for public policy supporting delivery in excess of household projections, even if those projections fall“.

⁃ “Other things being equal a more responsive supply of homes through local authorities planning for more homes where we need them will help to address the effects of increasing demand, such as declining affordability, relative to a housing supply that is less responsive“.

⁃ “The above factors have led to declining affordability…This indicates that the Government should not be less ambitious for housing supply“.

The Government has decided that the best way of responding to the ONS household figures is to ignore them completely, ie in its language:

1. For the short-term, to specify that the 2014-based data will provide the demographic baseline for assessment of local housing need.

2. To make clear in national planning practice guidance that lower numbers through the 2016-based projections do not qualify as an exceptional circumstance that justifies a departure from the standard methodology; and

3. In the longer term, to review the formula with a view to establishing a new method […] by the time the next projections are issued.”

So for local plans submitted from 24 January 2019, the 2014-based household projections as per the September 2017 data are to be used but with current figures used for the calculation of the ratio of local median house prices to local median earnings (where the ratio exceeds four the standard method formula will continue to increase local need above household projections). This all provides authorities with welcome clarity – ignore the September 2018 ONS projections and no need to wait for tweaks to the methodology.

Housing land supply

The 2018 NPPF provides that in calculating how many years’ supply of housing land supply each authority has, the standard method for assessing local housing need is to be used as the baseline for housing land supply calculations where plans are considered to be out of date. The NPPF is to be amended (and updated planning guidance is to be published) so as to clarify that whilst in exceptional circumstances authorities can use a justified alternative approach to the standard method for calculating housing need, this only applies to plan making rather than in the calculation of need in the determination of applications and appeals where the scale of housing land supply is relevant.

The definition of deliverable

In order to determine whether an authority has a five year supply of deliverable sites, the definition of “deliverable” is critical. The Government has held its hands up: the definition of “deliverable” in the 2018 NPPF could be clearer. It proposes the following revised definition:

To be considered deliverable, sites for housing should be available now, offer a suitable location for development now, and be achievable with a realistic prospect that housing will be delivered on the site within five years. In particular:

a) sites which do not involve major development and have planning permission, and all sites with detailed planning permission, should be considered deliverable until permission expires, unless there is clear evidence that homes will not be delivered within five years (for example because they are no longer viable, there is no longer a demand for the type of units or sites have long term phasing plans).

b) where a site has outline planning permission for major development, has been allocated in a development plan, has a grant of permission in principle, or is identified on a brownfield register, it should only be considered deliverable where there is clear evidence that housing completions will begin on site within five years.”

There will be further guidance in due course “to provide further information on the way that sites with different degrees of planning certainty may be counted when calculating housing land availability“.

Development requiring Habitats Regulations Assessment

The Government belatedly intends to address a problem that has arisen from the European Court of Justice’s ruling in People Over Wind (see my 20 April 2018 blog post EU Court Ruling: Ignore Mitigation Measures In Habitats Screening). The 2018 NPPF followed the 2012 NPPF in disapplying the presumption in favour of sustainable development where appropriate assessment is required, even though the effect of People Over Wind is that appropriate assessment is now routinely required in relation to proposed developments where mitigation will avoid any potential from harm, thereby removing the presumption in relation to many more development proposals than had previously been the case.

Paragraph 177 is now proposed to be amended to read:

The presumption in favour of sustainable development does not apply where the plan or project is likely to have a significant effect on a habitats site (either alone or in combination with other plans or projects), unless an appropriate assessment has concluded that there will be no adverse effect from the plan or project on the integrity of the habitats site.”

So now the need for appropriate assessment will not be a bar to the presumption applying. The wording in fact now allows the presumption to apply to more schemes than was the case pre People Over Wind.

The Government could have dealt with this issue before the 2018 NPPF was published. It makes the rather weak excuse: “Although some consultation responses asked for an amendment to the Framework in the light of the ruling, there was not an opportunity for all interested parties to comment at the time.” Well, why was there not even a written ministerial statement to clarify the position? I’m sure I am not the only one to have lost a planning appeal partly due to the absurd position that arose.

The government also indicates that it is “considering what other changes to regulations and guidance may be necessary following the European Court’s ruling“.

In my view MHCLG should take some credit for trying to sort out all of these issues. It is also interesting that the previous approach of avoiding making running repairs to the NPPF has been abandoned – we can soon expect NPPF version 2.1.

Simon Ricketts, 26 October 2018

Personal views, et cetera

The Up Right

In his speech to the Conservative party conference on 1 October 2018, James Brokenshire announced that the Government will consult “in due course” on “introducing a new permitted development right to allow property owners to extend certain buildings upwards, while maintaining the character of residential and conservation areas and safeguarding people’s privacy“.

Not that one again?!

My second ever blog post, on 15 June 2016, Permitted Development: What Next? summarised the February 2016 consultation paper jointly published by DCLG and the previous Mayor of London, which sought views on proposals “to increase housing supply in the capital by allowing a limited number of additional storeys to be built up to the roofline of an adjoining building through permitted development rights, local development orders or development plan policies”. The paper set out in some detail the criteria and prior approval requirements which would apply.

Nothing then happened, perhaps due to the change in Mayor and the ministerial changes that followed the June 2016 referendum, or perhaps it was always going to be a difficult piece of legislation to draft in a way that arrived at a mechanism that would be simpler for developers than a traditional planning application but which secured necessary amenity protections.

My 17 March 2018 blog post Permitted Development: À La Recherche Du Temps Perdu reported on the conflict between on the one hand a ministerial policy statement on 5 February 2018 which appeared to make it clear that the initiative (now across England, not just London) would be dealt with by policy, within the NPPF and then on the other hand Sajid Javid’s speech launching the draft revised NPPF on 5 March 2018 which had this passage:

And there are also other areas in which we’re ready to go further to take the delivery of housing up a gear.

Including a new permitted development right for building upwards to provide new homes”.

Paragraph 118 (e) of the new NPPF does specifically address upwards extensions: Planning policies and decisions should “support opportunities to use the airspace above existing residential and commercial premises for new homes. In particular, they should allow upward extensions where the development would be consistent with the prevailing height and form of neighbouring properties and the overall street scene, is well- designed (including complying with any local design policies and standards), and can maintain safe access and egress for occupiers.”

In the light of the Javid speech, the Brokenshire announcement was not a big surprise but I do wonder how the permitted development will be drafted so as to avoid the obvious issues that arise and why that NPPF statement isn’t considered to be sufficient.

The RTPI’s response to the announcement on 2 October 2018 was surely right, in which its chief executive, Victoria Hills, said:

Densification of built-up areas can bring about much needed housing supply, but quality is as important as numbers. Blanket height extensions come with issues that have potentially serious impact on streetscape and people’s access to light. National policy can provide a favourable steer, but local communities should be able to set standards which enable higher buildings to make a positive contribution to housing supply.”

There is no indication as to when the consultation will take place. For instance, is the Chancellor’s 29 October Autumn budget statement too soon?

It is interesting that Brokenshire did not take the opportunity at the party conference also to reheat the Autumn 2017 budget policy paper announcement that “the government will consult on introducing… a permitted development right to allow commercial buildings to be demolished and replaced with homes“.

In the meantime, the existing office to residential permitted development right continues to be controversial.

Earlier this year, the RICS published a research paper, Extending permitted development rights in England: the implications for public authorities and communities (1 May 2018)

The study estimated that “between 86,665 and 95,045 dwellings (depending on how student accommodation is classified) might potentially have been created under the extended PD rights between 2010 and 2017. The bulk of these additional dwellings arises from small-scale (less than 10 units created) conversions from commercial uses (including offices) to residential use and from agricultural buildings use to residential use.

These small schemes have been broadly distributed (largely in locations with relatively low property values) through cities and towns without any marked regional patterning. The large-scale conversions of office and other commercial uses to residential use that are a key matter of concern to policy makers are less important with regard to the overall number of dwellings delivered and are overwhelmingly concentrated near the cores of major urban areas. These large scale office conversions (excluding student accommodation) are concentrated in the South East. The scale of PD occurring entirely within the industrial and commercial use classes is relatively modest.

Cost-Benefit Analysis (CBA) compared the direct costs and benefits to local authorities of extended PD rights with the outcomes of an identical development that had obtained formal planning permission. The key findings were that:

The largest estimated financial impact is the loss in affordable housing contributions. This amounted to about £42.5m.

The benefits arising from savings in staffing costs within planning departments (£14m) are not enough to offset the loss of fees (£22m).

Overall, this part of the analysis estimates that the direct financial impact of the extension of PD rights is a net loss to all the Local Authorities across England of around £50m.”

The research indicates that office to residential conversions under PD have also produced a higher amount of poor quality housing than schemes governed through full planning permission.”

But the mechanism still has its cheer leaders. Conservative MP Nick Herbert wrote a piece in the Standard, Permitted development is key to race to build homes on 8 October criticising the London Mayor for encouraging, in the draft London Plan, boroughs to use article 4 directions to remove the permitted development right.

Then a penny dropped. Nick Herbert is chairman of a think tank, called The Project for Modern Democracy. Who should be the research director for the “Planning Change” strand of the think tank’s work but Alex Morton? As set out on the Project for Modern Democracy’s website:

“Alex was Special Adviser to then Prime Minister (David Cameron) for two and a half years, focused on housing, planning, and local government. He also drafted the Conservative 2015 Manifesto on those areas. Prior to working in No.10, he led on housing and planning at the Policy Exchange think tank.”

He was lobbying for a permitted development right to convert offices to residential as long ago as 2011 in a Policy Exchange paper, More Homes: Fewer Empty Buildings.

Morton has now published a short paper, A backwards step on Permitted Development (26 September 2018) on which the Nick Herbert article was based. The piece seeks to rebut criticisms of the office to residential permitted development right, particularly that it has led to shortages of business space, lower affordable housing and “unsuitable homes“. Read it for yourself but I found it a pretty weak analysis. I also found it strangely inconsistent with a comment piece he had written in the Independent in 2013, which contained passages like this:

Finally, there are unnecessary and unhelpful side-shows like the extensions debacle last week, which stripped immediate neighbours of their powers to object to major changes next door, and which even most supporters of planning liberalisation felt went too far.

I wonder what the Project for Modern Democracy thinks about the proposed Up Right?

Simon Ricketts, 13 October 2018

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