This is an important question, given that the consequence is that what is called in the jargon the “tilted balance” applies, namely that planning permission should be granted for any development proposal unless:
The application of policies in the NPPF “that protect areas or assets of particular importance provides a clear reason for refusing the development proposed” – those areas and assets being habitats sites, SSSIs, green belt, local green space, AONBs (now “national landscapes”), national parks, Heritage Coast, irreplaceable habitats, designated heritage assets (and some other heritage assets of archaeological value) and areas at risk of flooding or coastal change; or
“Any adverse impacts of doing so would significantly and demonstrably outweigh the benefits, when assessed against the policies in [the NPPF] taken as a whole, in particular those for the location and design of development … and for securing affordable homes”; or
The proposal would conflict with a neighbourhood plan which is no more than five years old and contains policies and allocations to meet its identified housing requirement.
The new Government is of course not just consulting on the draft revised NPPF but on a revised “standard method” for determining local housing need (see chapter 4 of its consultation document) and that standard method would significantly increase the local housing plan figure for most authorities. The effect for each authority is shown on this MHCLG spreadsheet or visually on Lichfields’ interactive map.
Maybe it’s just me but I found it quite difficult to get straight in my mind when an authority’s failure to demonstrate a five year supply of housing land to meet the new local housing need figure would mean that its local plan is to be treated as “out of date” such that the tilted balance applies. Here’s my thinking and it perhaps points to some areas where the draft revised NPPF needs to be tightened or at least made clearer.
Paragraph references in what follows are to the draft revised document.
The reference in paragraph 11 (d) is to “where “the policies for the supply of land are out of date”
Footnote 9 explains that:
“This includes, for applications involving the provision of housing, situations where: (a) the local planning authority cannot demonstrate a five year supply of deliverable housing sites (with the appropriate buffer, if applicable, as set out in paragraph 76); or (b) where the Housing Delivery Test indicates that the delivery of housing was substantially below (less than 75% of) the housing requirement over the previous three years.”
Paragraph 76 states:
“Strategic policies should include a trajectory illustrating the expected rate of housing delivery over the plan period, and all plans should consider whether it is appropriate to set out the anticipated rate of development for specific sites. Local planning authorities should identify and update annually a supply of specific deliverable sites sufficient to provide a minimum of five years’ worth of housing against their housing requirement set out in adopted strategic policies, or against their local housing need where the strategic policies are more than five years old. The supply of specific deliverable sites should in addition include a buffer (moved forward from later in the plan period) of:
5% to ensure choice and competition in the market for land; or
20% where there has been significant under delivery of housing over the previous three years, to improve the prospect of achieving the planned supply”
Paragraphs 224 and 225 state:
“224. The policies in this Framework are material considerations which should be taken into account in dealing with applications from the day of its publication. Plans may also need to be revised to reflect policy changes which this Framework has made.
225. However, existing policies should not be considered out-of-date simply because they were adopted or made prior to the publication of this Framework. Due weight should be given to them, according to their degree of consistency with this Framework (the closer the policies in the plan to the policies in the Framework, the greater the weight that may be given).”
Accordingly, until it is five years old, an adopted local plan will not be “out of date” on the basis of applying the proposed new standard method for assessing local housing need, but rather on the basis of whether it can demonstrate a five year supply of deliverable housing sites (calculated by reference to the housing requirement set out in strategic policies in the plan), with the appropriate buffer set out in paragraph 76 and has delivered at least 75% of its housing requirement over the last three years. Once the plan is five years old, the tilted balance will apply if there is not at least a five year supply of deliverable housing sites as against their new standard method local housing need figure (and delivery of 75% of its housing requirement over the last three years).
This applies to plans submitted for examination or adopted no later than one month after publication of the final version of the draft revised NPPF (see paragraph 226). For plans not adopted by that date the following transitional arrangements apply (in summary) as per paragraphs 226 and 227:
Where a plan was submitted for examination within a month of publication of the revised NPPF with a local housing requirement that is more than 200 dwellings lower than the relevant local housing need (under the new standard method), once the plan is adopted, the authority will be “expected to commence plan-making in the new plan-making system at the earliest opportunity to address the shortfall in housing need”. [There is no reference in the draft revised NPPF as to how long the authority has to conclude that process before its plan will be treated other than set out in my emboldened paragraph above. Surely this needs to be clarified, because otherwise it is a recipe for confusion at best and gaming of the system at worst].
Where a local plan has reached regulation 19 pre-submission stage with an emerging annual housing requirement that is more than 200 dwellings lower than the relevant local housing need (under the new standard method), the plan should proceed to examination within 18 months of publication of the revised NPPF. [There is no express indication of what the consequences are if this deadline is missed; presumably the need to plan as against the relevant local housing need (under the new standard method) – again, shouldn’t this be clarified?].
Hence presumably why we are seeing some authorities speed up with their emerging plans, with an eye on baking in housing targets based on the current standard method, although of course that is only going to work if their plans do not require significant further work during the examination process to make them sound (see the planning minister’s 30 July 2024 letter to the Planning Inspectorate).
I will try to make next weekend’s post (if there is one: I just remembered it’s the Oxford Joint Planning Law Conference – may see you there) more exciting, sorry.
The Valentine Brothers original version obviously, rather than Simply Red.
In fact, pardon me if this post feels a little like the extended 12” remix, but I wanted to work out for myself some of the long-running arguments that are out there as to the role of financial viability testing in planning.
The subject has been made topical by the “viability in relation to green belt release” annex to the consultation draft revised National Planning Policy Framework, as well as Labour’s proposals in relation to “no hope value” CPOs (mentioned in my 21 July 2024 blog post Hope/No Hope). But the discussion is vital anyway in present circumstances where, in order to deliver and/or fund necessary housing development (and indeed many other forms of development), the state largely relies on the private sector, which is inevitably motivated by profit.
It’s difficult to have a sensible discussion without trying to establish some basic principles. So here goes…
We want an acceptable environment around us: sufficient social housing for those who need it, health and education facilities, biodiversity and open space, good public transport, footpaths and cycleways.
We no longer seem prepared to pay for this fully through direct taxation or indeed charitable benevolence.
Instead, over the last 25 years or so of my career, Government policy has increasingly supported the indirect taxation of development activity (primarily by way of section 106 agreement planning obligations and the community infrastructure levy) to help pay for all these good things, even where it is not the development itself that is leading to the need for the particular infrastructure or facilities (and before you raise it, regulation 122 of the Community Infrastructure Levy Regulations only provides cover against the most egregious of LPA “asks”).
Affordable housing is the classic example of what I mean by indirect taxation. As I set out in my 28 May 2017 blog post Affordable Housing Tax:
“In requiring the developers of private housing schemes to contribute to the provision of affordable housing, the planning system has become a tax collection system, and an inefficient, opaque one at that.
[…]
“The provision of market housing does not in any way increase the need for affordable housing, indeed over time by increasing supply if anything it should decrease it. It may be said that mixed use communities can only be achieved by requiring the inclusion of affordable housing within market residential schemes, but that in itself does not justify the state putting the cost of the affordable housing at the door of the developer.”
[Think how odd it would be for car makers to be required to sell a large proportion of their product at below market rate, in fact at a loss – or indeed for supermarket chains to be so required – nice as that thought might be. Why is housing so different?]
Add to this the much-reduced availability of grant funding.
You see the same indirect taxation in the case, for instance, of schools: whether or not a particular housing scheme is built, children need schooling somewhere in the country. And yet the cost of delivery of new schools is regularly met in large part by way of contributions and obligations extracted via the planning system.
Most recently, the 10% biodiversity net gain requirement. Laudable – but another indirect tax on development via the planning system.
All of this appears to be implicitly accepted as in the public interest, presumably on the basis that:
It’s a victimless crime – assumed to be paid for out of (a) the receipts the land-owner receives for sale of the land, as long as the requirements are flagged sufficiently far in advance that they can be built into the contractual arrangements between the land owner and developer and can generally manage the land-owner’s expectations; and/or (2) the developer’s profit (for whom the return needs to outweigh the risk).
It sugars the pill for local communities, which is important given the general antipathy towards development (or maybe that’s just my village’s Facebook group….).
It would be politically impractical to meet these costs via the national public purse.
This is all fine if the numbers work out – if the contributions required by policy can be paid for, whilst leaving enough money in the project to ensure that it will still proceed i.e. that between them:
The land-owner receives enough money to persuade them to sell the land, rather than hold onto it or sell it for other purposes
The developer concludes that there is a sufficient slice of profit left to make it worthwhile as a business proposition to proceed to carry out the development, having regard to the availability, and likely cost over time, of development finance and/or of funding partners, and the range of development risks such as the costs of construction, other regulatory costs and uncertainties over time, unforeseen problems along the way and as to the financial return likely to be achieved at the end of it all
The purchaser or renter of the home is protected by operation of market forces against the cost simply being passed onto them.
What happens when the contributions requested in return for planning permission don’t work out? That is where the viability appraisal process comes in.
The Planning Practice Guidance https://www.gov.uk/guidance/viability advises that local plans “should set out the contributions expected from development. This should include setting out the levels and types of affordable housing provision required, along with other infrastructure (such as that needed for education, health, transport, flood and water management, green and digital infrastructure).
These policy requirements should be informed by evidence of infrastructure and affordable housing need, and a proportionate assessment of viability that takes into account all relevant policies, and local and national standards, including the cost implications of the Community Infrastructure Levy (CIL) and section 106. Policy requirements should be clear so that they can be accurately accounted for in the price paid for land.”
Obviously, it is sensible for local plans to give as much certainty as possible as to what contributions will be sought from developers and thereby to serve to dampen the expectations of land-owners. But the reality is that viability assessments at the local plan making stage are inevitably broad-brush, often based on typical development typologies. They become out of date. There is often insufficient push-back from developers – either because they do not yet have a relevant project in mind at the time the plan is being consulted upon and examined, or because they are nervous about losing the potential allocation of their site for development. And so policy aspirations are set high.
When an application for planning permission comes forward for development which is in accordance with the local plan or otherwise in the public interest, save that the full range of policy requirements cannot be met without rendering the project unachievable, what happens then?
To quote paragraph 58 of the current NPPF (which paragraph is not proposed to be amended in the consultation draft):
“Where up-to-date policies have set out the contributions expected from development, planning applications that comply with them should be assumed to be viable. It is up to the applicant to demonstrate whether particular circumstances justify the need for a viability assessment at the application stage. The weight to be given to a viability assessment is a matter for the decision maker, having regard to all the circumstances in the case, including whether the plan and the viability evidence underpinning it is up to date, and any change in site circumstances since the plan was brought into force. All viability assessments, including any undertaken at the plan-making stage, should reflect the recommended approach in national planning guidance, including standardised inputs, and should be made publicly available.”
A decision-maker can decide to grant planning permission without commitments on the part of the developer to all of the contributions normally required by policy, if the developer has justified that the development would otherwise be unviable demonstrating that by way of a viability assessment carried out in accordance with the methodology set out in the Government’s Planning Practice Guidance.
The guidance these days is tighter than it was, although there is still much room for debate and disagreement as between the developer’s surveyor and the surveyor engaged by the local planning authority (invariably at the developer’s cost). There is much public discussion about “benchmark land value” in this exercise, i.e. in estimating the costs of carrying out the development, what cost should be assumed for the land itself? But that is by no means the only factor when it comes to viability. In many situations, development may be unviable even assuming little or no land value, simply because of, for instance, the large infrastructure costs which would need to be met by the developer, financing costs and/or low value of the completed development – and this is all made more complicated in relation to longer-term projects, where an internal rate of return model may be more appropriate. But for I’m going to focus here on the land value issue.
It’s been clear for many years that the benchmark land value to be plugged into the viability appraisal is not the price that the developer has actually paid for the land – see for example Parkhurst Road Limited v Secretary of State (Holgate J, 27 April 2018). Instead, the usual approach, according to the Planning Practice Guidance, should be EUV+, i.e. to take the existing use value (ignoring, for example, any development potential) and then to apply a premium. Oh dear, one of the big questions is how big should that premium be? The guidance says this:
“The premium should provide a reasonable incentive for a land owner to bring forward land for development while allowing a sufficient contribution to fully comply with policy requirements.
Plan makers should establish a reasonable premium to the landowner for the purpose of assessing the viability of their plan. This will be an iterative process informed by professional judgement and must be based upon the best available evidence informed by cross sector collaboration. Market evidence can include benchmark land values from other viability assessments. Land transactions can be used but only as a cross check to the other evidence. Any data used should reasonably identify any adjustments necessary to reflect the cost of policy compliance (including for affordable housing), or differences in the quality of land, site scale, market performance of different building use types and reasonable expectations of local landowners. Policy compliance means that the development complies fully with up to date plan policies including any policy requirements for contributions towards affordable housing requirements at the relevant levels set out in the plan. A decision maker can give appropriate weight to emerging policies. Local authorities can request data on the price paid for land (or the price expected to be paid through an option or promotion agreement).”
There are some examples of where a premium of many times the EUV has been found to be appropriate. For example:
Long Marston, Pebworth (APP/H1840/S/16/3158916, 16 May 2017): In the particular circumstances there, the inspector found that a premium of around 15 times the EUV was appropriate. (The appeal pre-dated the PPG but turned on a similar earlier concept of EUV+).
Parkhurst Road, Islington (APP/V5570/W/16/3151698, 19 June 2017): The appeal site was a former Territorial Army barracks in north London. The inspector found that the EUV was £2.4m but EUV+ was £6.75m (still less than the developer had paid for the site) . In the subsequent High Court challenge I refer to above, Holgate J the judge said this about EUV+: “Some adherents appear to be promoting a formulaic application of ‘EUV plus.’ But as the RICS advised its members in its 2012 Guidance Note, an uplift of between 10 and 40% on existing use value is an arbitrary number and the method does not reflect the workings of the market…”.
Old Oak and Park Royal local plan examination in public, Inspector’s Interim Finding on Viability (10 September 2019) : In relation to the Car Giant site forming most of the plan area, a very large brownfield site in north London, the inspector found the EUV to be £5.3m. The Old Oak and Park Royal Development Corporation’s surveyors suggested a premium of 20% would be appropriate. The inspector found that the characteristics of the site, including in particular Car Giant’s significant relocation costs, would justify a far larger premium, concluding that EUV+ was “clearly in excess of £240m”.
On the one hand, this sort of exercise may be seen as sensible in that it is seeking to get to the number that can be taken to be the tipping point at which a land-owner might rationally choose to sell rather than stay put. But of course, on the other, the potential range is so wide that the outcome of the process can be very unpredictable and result in high numbers – true but what is the alternative that enables or persuades land-owners (who are often in fact reluctant to sell in any event – their heads only turned by a financial offer they can’t refuse) actually to make their land available, unless there is a market intervention such as compulsory purchase (but (1) that obviously needs careful justification and (2) a careful look is needed at how the compulsory purchase compensation principles work), some targeted form of tax credits or in fact (never thought I’d say this and I still only think this works in theory rather than reality) community land auctions?
I’ll throw in another complication here: the figures in a viability appraisal are in part theoretical. We know that the actual price paid for the land isn’t plugged into the equation. The actual price may have been far higher, meaning that the developer is always going to be struggling to get the project off the ground. It may have been lower – the land may have been held for generations, with a very low current book value, or be held by a body that is prepared to make the land available at an under-value. Similarly as to the efficiencies in construction or financing that a particular developer may be able to bring to the process (versus the greater challenges in this respect an SME may have than a national housebuilder), or preparedness to take a reduced profit, or even a loss with this development, given wider objectives. If we want an objective scrutiny of the financial position, not tied to a particular developer who may of course in any event sell on, this is probably right. But it does mean that there may be two processes underway: (1) what is the objective agreed assessment as to the viability of the project and (2) is this developer for some reason prepared to offer more than what is objectively viable on the basis of that agreed assessment?
Can we at least agree that this subject is not easy, either in macro policy terms or in its detailed application? And that whilst it may be tempting for some to say “get rid of viability testing, development must simply meet all policy requirements”, can we agree that this is unrealistic without (1) up to date realistic local plan policies (unlikely) or (2) an acknowledgement that effect would less development coming forward, particularly in the areas where it is most needed?
At which point I turn to the Government’s proposals.
A new annex is included in its draft revised NPPF, headed “viability in relation to green belt release”, but one of the only two new elements of the proposed approach set out in that annex is what I have put in bold in the following paragraph:
“To determine land value for a viability assessment, a benchmark land value should be established on the basis of the existing use value (EUV) of the land, plus a reasonable and proportionate premium for the landowner. For the purposes of plan-making and decision- taking, it is considered that a benchmark land value of [xxxx] allows an appropriate premium for landowners. Local planning authorities should set benchmark land values informed by this, and by local material considerations.“
These are the key associated paragraphs in the consultation document which explain the “[xxxx]“:
“29. Approaches that government could take to ensure the appropriate use of viability include the following options.
a. Government sets benchmark land values to be used in viability assessments. When assessing whether a scheme is viable, it is necessary to make an allowance for the amount of money to be paid to the landowner. This should currently be set by the local planning authority. Government could set indicative benchmark land values for land released from the Green Belt through national policy, to inform the policies developed on benchmark land value by local planning authorities. These should be set at a fair level, allowing for a premium above the existing use, but reflecting the need for policy delivery against the golden rules. Different approaches to benchmark land value are likely to be appropriate for agricultural land, and for previously developed land.
b. Government sets policy parameters so that where land transacts at a price above benchmark land value, policy requirements should be assumed to be viable. As part of this approach, Government sets out that if land has been sold (or optioned) at a price which exceeds the nationally set benchmark land value, viability negotiation should not be undertaken. Under this approach, the planning authority should not be seeking higher contributions (e.g. 60 per cent affordable housing), but equally the developer should not be seeking lower contributions (e.g. 40 per cent affordable housing), as this would represent a transfer of value from the public to private landholders. Therefore, planning permissions would not generally be granted for proposed developments where land transacts above benchmark land value, and cannot comply with policy.
c. Government sets out that where development proposals comply with benchmark land value requirements, and a viability negotiation to reduce policy delivery occurs, a late-stage review should be undertaken. This would build on the approach to be taken by the Greater London Authority, and tests actual costs and revenues against the assumptions made in the initial viability assessment. If, for example, the development is more viable than initially assumed, due to a rise in house prices, then additional contributions can be secured, to bring the development closer to or up to policy compliance.
30. Benchmark land values are generally set as a multiple of agricultural use values, which are typically in the region of £20,000 – £25,000 per hectare, and as a percentage uplift on non-agricultural brownfield use values. We also note that views of appropriate premia above existing use values vary: for agricultural land, a recent academic paper[footnote 6 ] suggested BLVs of three times existing use value; the Letwin Review of Build Out [footnote 7] suggested ten times existing use value; Lichfields found that local planning authorities set BLVs of between 10- and 40-times existing use value [footnote 8 ]. These BLVs do not necessarily relate to Green Belt land, which is subject to severe restrictions on development, and Government is particularly interested in the impact of setting BLV at the lower end of this spectrum.
31. The Government considers that limited Green Belt release, prioritising grey belt, will provide an excellent opportunity for landowners to sell their land at a fair price, while supporting the development of affordable housing, infrastructure and access to nature. Where such land is not brought forward for development on a voluntary basis, the Government is considering how bodies such as local planning authorities, combined authorities, and Homes England could take a proactive role in the assembly of the land to help bring forward policy compliant schemes, supported where necessary by compulsory purchase powers, with compensation being assessed under the statutory no-scheme principle rules set out in Part 2 of the Land Compensation Act 1961.
32. In such cases, these rules would operate to exclude any increases or decreases in value of land caused by the compulsory purchase scheme, or by the prospect of it, and valuation of the prospect of planning permission (‘hope value’) for alternative development would reflect the golden rules outlined in the NPPF. Use of compulsory purchase powers may also include use of directions to secure ‘no hope value’ compensation where appropriate and justified in the public interest. A comprehensive justification for a no hope value direction (e.g., which includes a high proportion of vital affordable housing being delivered) will strengthen the argument that a direction is in the public interest. This would align with the Government’s aspiration for high levels of affordable housing to be delivered on these sites.”
That emboldening is in the document itself. So, we are looking at a potential approach where, for the purposes of viability appraisals on green belt sites (where there will be the policy requirement of “at least 50% affordable housing, with an appropriate proportion being Social Rent”) the Government caps the potential premium on existing use value more towards 3x than between 10 and 40x. That would provide some clarity, and would in the long term (beyond the gestation of current promotion agreements, option agreements and the like which will have baked in potentially higher figures) dampen land-owner expectations. However, the outcome may be that some potential sites are not released by land-owners because the resultant return is simply not worth it for them – they would prefer to hold the land for its current purposes, or make it available for non-residential development which may result in a higher premium, or wait for a more liberal policy climate to open up in future decades – and in the meantime battle against any threat of compulsory purchase. This is particularly the case at the moment where, as another risk to factor in, there is a dearth of registered providers even willing to build-out or take on the affordable housing element in some areas. The impacts of the approach will also particularly be felt in areas with weaker housing markets, where 50% affordable housing (including, importantly, an as yet unknown proportion of socially rented housing) will be a big drag on viability – and those areas are often the same areas where housing targets will be going up most steeply under the proposed revised standard method.
This proposal to set a blanket cap on existing use values really does need to be stress-tested during the current consultation period. I would particularly urge those with market knowledge to review those papers referred to in paragraph 30 quoted above – I have included the links. For instance, I couldn’t immediately see the workings for 3x EUV in that first paper.
The other change which that annex proposes is in its last line:
“Where a viability negotiation to reduce policy delivery has been undertaken, a late-stage review should be conducted to assess whether further contributions are required.”
Remember, this annex only relates to development in the green belt, but its effect is to advise that where policy compliant development (eg 50% affordable housing), cannot be delivered due to lack of viability, a provision should be included in the section 106 agreement, providing for a review at a later stage, or at later stages, of the development to see whether that is still the position or whether the project is now able to afford to meet those policy commitments, in full or at least in part. Obviously, in London, this has been relatively standard for some time (see eg the Mayor’s May 2023 draft development viability London Plan Guidance), and is often used in negotiations across the country. But the negotiation is never straight-forward, even in London where the provisions are so standardised. What should be the triggers; what is opened up on the review (and is it just a review of what has been developed so far or is it also an updated estimate of what has not yet been built); what proportion of the surplus should be retained by the developer so as to provide any incentive; what should be the cap on what can be secured on review (vital, as all of this is very sensitive to funders and lenders); what should any surplus be applied towards and what say does the developer has in this?
The threat of compulsory purchase in the case of recalcitrant landowners? That takes us back to the issues I covered in that Hope/No Hope blog post. In some cases, perhaps so, but of course as I have mentioned above, even acquisition of land at existing use value (which obviously would lead to protracted wrangling in many cases) does not always guarantee project viability.
Imagine working for a local authority, trying to arrive at a strategy for bringing forward a local plan against a backdrop that is constantly uncertain and evolving in at least four dimensions:
National policy as to plan-making
National policy as to the assessment of local housing need (the so called “standard method”)
Legislative reform to the plan-making system
Politics
Given the shifting nature of the various transitional arrangements, deadlines and targets, the theme of this post isn’t so much the substantive policies and methodological nuances but rather the bigger “real world” question: How does the Government minimise the likelihood that local authority councillors will shrug their shoulders, when advised of the Government’s latest direction of travel and the potential difficulties which authorities without an adequate or up to date plan may face, and say “we’ve heard it all before and will believe it when we see it…”?
After all, given that plan-making is meant to be the very basis of the planning system, the system is in utter crisis. Lichfields’ research paper Timed Out? in July 2023 for the LPDF identified that without immediate action from the Government, over 75% of LPAs in England would have an out-of-date plan for housing delivery by the end of 2025.
The current December 2023 version of the NPPF took a year to be published by the last Government following a consultation draft in December 2022. Authorities, particularly green belt authorities, had every reason to delay their plan-making, whether to avoid abortive work or to take advantage of the flagged likelihood that their local housing targets would become (even more) advisory rather than mandatory. The final version was originally intended to be published in Spring 2023! The final version of the document included transitional arrangements whereby it would only apply to plans which had not reached regulation 19 pre-submission draft stage by 19 March 2024.
As an overlay to that uncertainty during 2023, there was of course the prospect of a whole new system for preparing local plans, the framework for which is set out in the Levelling-up and Regeneration Act 2023 which received Royal Assent in October 2023. The previous Government’s July 2023 consultation on the implementation of the new local plans system repeated a statement in an earlier December 2022 consultation document, that:
“plan makers will have until 30 June 2025 to submit their local plans, neighbourhood plans, minerals and waste plans, and spatial development strategies for independent examination under the existing legal framework…[and]…all independent examinations of local plans, minerals and waste plans and spatial development strategies must be concluded, with plans adopted, by 31 December 2026. These plans will be examined under the current legislation.
… we are setting this out now to provide planning authorities with as much notice as possible of these dates.
We confirm our intention to have in place the regulations, policy and guidance by autumn 2024 to enable the preparation of the first new-style local plans and minerals and waste plans. As set out above, this deadline is contingent upon Royal Assent of the Levelling Up and Regeneration Bill, as well as Parliamentary approval of the relevant regulations.”
And as an overlay to that overlay, there was the prospect of changes to the standard method for assessing housing need, which potentially would have significant implications for many authorities. The current method is still based on 2014-based household projections with, since 2020, the 35% uplift in the 20 largest urban areas. Ostensibly a technical exercise but in reality of course a massive political hot potato, those prospective changes have been continually delayed. The position of the previous Government was as per its 19 December 2023 statement:
“We note the comments received around the continued use of 2014-based household projections within the standard method for assessing housing need, and the calls for more up-to-date projections to be used. Through the consultation we explained that the use of this data provides stability, consistency, and certainty to local planning authorities. Nevertheless, we committed to review the approach to assessing housing need once we have considered the implications of new 2021 Census based household projections, planned to be published by the Office for National Statistics in 2024. The Office for National Statistics recently confirmed that the next set of household projections are now planned for release in 2025. As with all policies we keep the standard method under review, and we intend to review the approach to assessing housing needs once this data is available.”
Clear as mud as to timescales.
So, imagine you’re a councillor with the objective of resisting additional housing in your area, with all this as the backdrop. What has been the incentive to bring forward your plan quickly? Yes you won’t have an up to date plan and may find that you’re facing applications for planning permission on unallocated sites, and subsequent appeals – with applicants relying on the NPPF’s tilted balance – but (1) appeal decisions have regularly demonstrated that the tilted balance is not particularly tilted, it’s certainly no cliff-edge, (2) hey you can always blame the Planning Inspectorate or the Secretary of State and (3) the risk of central Government intervention in your plan-making has always seemed somewhat of a bluff. Add in the large cost of preparing a plan and the flak you may receive. Hmm.
But new government, new direction. How likely is it that your thinking is now going to change in the light of last month’s announcements?
Looking at the draft revised NPPF, the local housing need figure determined via the standard method will no longer just be “an advisory starting point” and there will no longer be a get-out for green belt authorities: where “an authority cannot meet its identified need for housing, commercial or other development through other means….authorities should review green belt boundaries and propose alterations to meet those needs in full, unless the review provides clear evidence that such alterations would fundamentally undermine the function of the Green Belt across the area of the plan as a whole”. The draft replacement standard method would result in a higher local housing need figure for most authorities. In the absence of an up to date plan, there is a greater prospect of planning permission being secured on unallocated land, including on Green Belt sites that can be shown to fall within the “grey belt” definition.
There is a narrow window for authorities to make sufficient progress with their emerging plans so as to fall within the existing NPPF, with numbers guided by the current standard model. Within a month of the publication of the final version of the plan (so, let’s guess, by January 2025) either (1) the local plan must have been submitted for examination or (2) (if the emerging annual housing requirement is no more than 200 dwellings behind what the new policy figures would dictate) the plan must have at least reached Regulation 19 pre-submission consultation. In the case of (1), if the plan’s annual housing requirement is more than 200 dwellings behind what the new policy figures would dictate, the authority “willbe expected to commence plan-making in the new plan-making system at the earliest opportunity to address the shortfall in housing need”. In the case of (2) the plan will need to proceed to examination within a maximum of 18 months from the publication date of the revised NPPF, so by, let’s guess, June 2026.
The Secretary of State has made it clear in her 31 July 2024 letter to local authorities that “where there is a significant gap between the plan and the new local housing need figure, we will expect authorities to begin a plan immediately in the new system” and that “local authorities will be expected to make every effort to allocate land in line with their housing need as per the standard method, noting it is possible to justify a lower housing requirement than the figure the method sets on the basis of local constraints on land and delivery, such as flood risk. Any such justification will need to be evidenced and explained through consultation and examination, and local authorities that cannot meet their development needs will have to demonstrate how they have worked with other nearby authorities to share that unmet need.”
The Secretary of State’s letter is also interesting for the warning:
“I will not hesitate to use my powers of intervention should it be necessary to drive progress – including taking over an authority’s plan making directly.”
I suspect she means it (and alternative options for revisions to the policy criteria for local plan intervention are set out in chapter 10 of the 30 July 2024 consultation document).
It will be interesting to see the extent to which all of this influences behaviour. Well-known local plans programme officer Helen Wilson subsequently suggested on LinkedIn that the Planning Inspectorate is “expecting over 120 plans to be submitted over the coming months”. That would be a surprisingly swift response to the emerging announcements.
Will many authorities really seek to proceed quickly to take advantage of the transitional arrangements? Unless they are already well-advanced, it may be challenging unless work is accelerated now during the consultation period itself and are many authorities going to risk that potentially abortive expenditure ahead of the outcome of the current consultation process? I suspect the temptation for many will be to wait it out. And the door has been smartly closed on ideas of rushing forward with a “quick and dirty” version to regulation 19 or submission, given the planning minister’s letter to the Planning Inspectorate, reversing the previous Government’s “expectation that Inspectors should operate “pragmatically” during local plan examinations to allow deficient plans to be ‘fixed’ at examination. This has gone too far and has perversely led to years of delays to local plan examinations without a guarantee that the plans will ever be found sound, or that the local authorities will take the decisions necessary to get them over the line. This has to end.
[…]
Pragmatism should be used only where it is likely a plan is capable of being found sound with limited additional work to address soundness issues. Any pauses to undertake additional work should usually take no more than six months overall. Pragmatism should not be used to address fundamental issues with the soundness of a plan, which would be likely to require pausing or delaying the examination process for more than six months overall. Local authorities should provide regular progress updates of their work to the Planning Inspector during any agreed pause.
Any extensions to the six-month pause should only be allowed at Inspectors’ discretion to deliver adopted local plans under the current system. In agreeing extensions, the Inspector should be confident that the local authority can complete any outstanding work in the agreed timeframe.
This new approach will apply to all plans with immediate effect. Existing pauses already agreed by an Inspector should remain in place unless the Inspector considers there is insufficient progress being made.
This will enable Inspectors to focus their valuable time and resources on those plans that are capable of being found sound and can be adopted quickly to provide certainty to local communities. Where a plan is unable to be found sound, the local authority will need to work in partnership with their local community to bring forward a new plan.”
The Planning Inspectorate’s chief executive responded in support but warned:
“It is inescapable that this fresh approach will lead to an increase in local plans being recommended for withdrawal from examination or being found unsound. But that should not be seen as any sort of failure of pragmatism or of the system more generally.”
What about the new local plans system that had been proposed and those long-established transition deadlines – June 2025 for submission, December 2026 for adoption? Chapter 12 of the 30 July 2024 consultation document addresses this, in part, in that the submission deadline is now pushed back until December 2026. Whilst, as set out in the consultation document, this has “the potential to benefit plans which are at earlier stages of preparation, and providing more time for local planning authorities to reflect on the revised NPPF and progress positive plans that will stand up to scrutiny”, I do have some concern that for a cynic within local government it is just another reinforcement of existing assumptions that these sorts of deadlines always end up being pushed back!
In my view the delay was inevitable. We have seen nothing further yet in relation to the “regulations, policy and guidance” promised by the previous Government although no doubt before long we will have consultation on the proposed national development management policies which will replace at least some of what is currently the subject of local plan making, leaving them to focus on numbers (within the narrower constraints of the revised NPPF when it is finalised), spatial planning and allocating specific sites for development. Will some of the more formal procedural changes set out in LURA be brought into effect or on reflection can equivalent improvements (for instance the early checks as to likely soundness) be made simply by policy rather than secondary legislation? And will we ever see LURA’s environmental outcomes reports system refined and brought into effect to replace and perhaps streamline the current strategic environmental assessment of plans? I don’t know the answer to these questions.
Finally, possibly beyond this round of local plans, we will of course be seeing the reintroduction of a formal strategic tier of plan-making but before that we have the proposed return of the duty to cooperate within the draft revised NPPF, and the announcement in chapter 3 of the consultation paper that the Government will “work in concert with Mayoral Combined Authorities to explore existing powers to develop [a spatial development strategy], which will not rely on primary legislation, and so allow us to get a head start. We intend to identify priority groupings of other authorities where strategic planning – and in particular the sharing of housing need requirements – would provide particular benefits, setting a clear expectation of cooperation that we would help to structure and support this, and to use powers of intervention where necessary”.
How can the Government seek to achieve the swift changes and “universal coverage” in plan making it is looking for, against all of this background? In my view only by keeping up the present pace, relentlessly emphasising the main themes in a way that is meaningful outside the technocratic world of planning professionals, providing local government with the necessary resources and tools (including advice where necessary) and continuing to make sure that all the detailed background preparation is in place.
Shame town and country planning isn’t any longer an Olympic sport isn’t it? It would be nice if we were in contention for that one.
Maybe even this will be more than you or I can chew but for this blog post I am only going to focus on the proposed changes to green belt policy. Much of the text which follows is by my Town Legal colleagues Susannah Herbert and Aline Hyde to whom much thanks…
Green Belt – Plan Making
Local planning authorities will be required “to undertake a review where an authority cannot meet its identified housing, commercial or other need without altering Green Belt boundaries.” (This is in addition to removing the December 2023 additions which set out the circumstances in which local planning authorities would not be required to undertake a Green Belt review). The amendment defines “exceptional circumstances” to “include instances where an authority cannot meet its identified need for housing, commercial or other development through other means”.
A sequential test is proposed, to guide changes to Green Belt boundaries through local plans – “This will ask authorities to give first consideration to PDL [previously developed land] within the Green Belt, before moving on to other grey belt sites, and finally to higher performing Green Belt sites where these can be made sustainable. …, land that is safeguarded by existing environmental designations, for example National Parks, National Landscapes and Sites of Special Scientific Interest, will maintain its protections.
18. The aim of this approach is to ensure that low quality Green Belt is identified first, while not restricting development of specific opportunities which could be made more sustainable (for example, on land around train stations). This is in recognition that not all PDL or ‘Grey Belt’ will be in the most suitable or sustainable location for development. As such, it is right that local planning authorities are empowered to make decisions that best support the development needs and sustainability objectives of their area through the plan-making process. There is clear expectation that local planning authorities should seek to meet their development needs in full. However, we remain clear that the release of land should not be supported where doing so would fundamentally undermine the function of the Green Belt across the area of the plan as a whole. We propose changes to paragraph 147 of the NPPF to achieve this approach.”
The proposed wording is as follows:
142 (previously 144) (comparison to Sept 2023) Once established, Green Belt boundaries should only be altered where exceptional circumstances are fully evidenced and justified, through the preparation or updating of plans. Exceptional circumstances include, but are not limited to, instances where an authority cannot meet its identified need for housing, commercial or other development through other means. In these circumstances authorities should review Green Belt boundaries and propose alterations to meet these needs in full, unless the review provides clear evidence that such alterations would fundamentally undermine the function of the Green Belt across the area of the plan as a whole. Strategic policies should establish the need for any changes to Green Belt boundaries, having regard to their intended permanence in the long term, so they can endure beyond the plan period. Where a need for changes to Green Belt boundaries has been established through strategic policies, detailed amendments to those boundaries may be made through non- strategic policies, including neighbourhood plans.
144.(previously 146) When drawing up or reviewing Green Belt boundaries, the need to promote sustainable patterns of development should be taken into account. Strategic policy- making authorities should consider the consequences for sustainable development of channelling development towards urban areas inside the Green Belt boundary, towards towns and villages inset within the Green Belt or towards locations beyond the outer Green Belt boundary. Where it has been concluded thatit is necessary to release Green Belt land for development, plans should give first consideration to previously-developed land in sustainable locations, then considergrey belt land in sustainable locations which is not already previously-developed, and only then consider other sustainable Green Belt locations. They should alsoset out ways in which the impact of removing land from the Green Belt can be offset through compensatory improvements to the environmental quality and accessibility of remaining Green Belt land.
Grey belt
Grey belt will be defined (in the glossary at Annex 2 to the NPPF) as follows:
“Grey belt: For the purposes of Plan-making and decision-making, grey belt is defined as land in the Green Belt comprising Previously Developed Land and any other parcels and/or areas of Green Belt land that make a limited contribution to the five Green Belt purposes (as defined in para 140 of this Framework) but excluding those areas or assets of particular importance listed in footnote 7 of this Framework (other than land designated as Green Belt).”
The Government is “interested in whether further support is needed to assist authorities in judging whether land makes a limited contribution to the Green Belt purposes. They propose incorporating the following into the glossary appended to the NPPF:
Land which makes a limited contribution to the Green Belt purposes will:
Not strongly perform against any Green Belt purpose; and
Have at least one of the following features: i. Land containing substantial built development or which is fully enclosed by built form ii. Land which makes no or very little contribution to preventing neighbouring towns from merging into one another iii. Land which is dominated by urban land uses, including physical developments iv. Land which contributes little to preserving the setting and special character of historic towns”
Many local planning authorities will have evidence base documents which assess the effectiveness of parcels of land against the purposes of designating land as Green Belt but these documents do not necessarily observe this draft methodology. The extent to which they will be useful in guiding decision-making, at least in the short term until they can be revisited, is then unclear.
[Comment from me – “limited contribution”: huge room for debate!]
Green Belt Decision Making
The definition of “inappropriate development” is to be significantly restricted. At present in order for development on previously developed land not to be “inappropriate development” (and therefore be subject to the “very special circumstances” test) then (unless it would contribute to meeting an identified affordable housing need) it “must not have a greater impact on the openness of the Green Belt than the existing development”. Draft revised paragraph 151 waters down this test to “would not cause substantial harm to the openness of the Green Belt”.
[Another comment from me – “substantial harm”: huge room for debate, as it is already in the case of proposed development that would contribute to meeting an identified affordable housing need.]
In terms of the Grey Belt concept, the Government proposes to insert a new paragraph in the NPPF which will make clear that, “in instances where a local planning authority cannot demonstrate a 5-year housing land supply or is delivering less than 75% against the Housing Delivery Test, or where there is unmet commercial or other need, development on the Green Belt will not be considered inappropriate when it is on sustainable ‘grey belt’ land, where golden rules for major development are satisfied, and where development would not fundamentally undermine the function of the Green Belt across the area of the plan as a whole.”
{Comment from me: “unmet commercial or other need“, “fundamentally undermine” – yes you’re there before me.]
This is set out in the new paragraph 152:
“152. In addition to the above, housing, commercial and other development in the Green Belt should not be regarded as inappropriate where:
a. The development would utilise grey belt land in sustainable locations, the contributions set out in paragraph 155 below are provided, and the development would not fundamentally undermine the function of the Green Belt across the area of the plan as a whole; and
b. The local planning authority cannot demonstrate a five year supply of deliverable housing sites (with a buffer, if applicable, as set out in paragraph 76) or where the Housing Delivery Test indicates that the delivery of housing was below 75% of the housing requirement over the previous three years; or there is a demonstrable need for land to be released for development of local, regional or national importance.
c. Development is able to meet the planning policy requirements set out in paragraph 155.”
In terms of development on non-Grey-Belt-Green-Belt, the Government states “Our proposal limits release via this route to grey belt, including PDL — reaffirming our commitment to a plan-led system by maintaining restrictions on the release of wider Green Belt land. It would, as now, be possible for other Green Belt land to be released outside the plan-making process where ‘very special circumstances’ exist, but such cases would remain exceptional.”
Therefore, in theory, the test of “very special circumstances” for Green Belt development remains unchanged but the existence of Grey Belt and the priority given in policy may make it harder to make the case for development on non-Grey-Belt-Green-Belt (although the emphasis on sustainable locations in the sequential test may also benefit some non-Grey-Belt-Green-Belt locations).
Golden Rules and Viability for Green Belt development
The proposed “Golden Rules” for Green Belt development are set out in a new paragraph 155:
“a. In the case of schemes involving the provision of housing, at least 50% affordable housing [with an appropriate proportion being Social Rent], subject to
viability;
b. Necessary improvements to local or national infrastructure; and
c. The provision of new, or improvements to existing, green spaces that are accessible to the public. Where residential development is involved, the objective should be for new residents to be able to access good quality green spaces within a short walk of theirhome, whether through onsite provision or through access to offsite spaces.
156. Regarding the provision of green space, development proposals should meet local standards where these exist in local plans, for example local planning policies on access to green space and / or urban greening factors. Where no locally specific standards exist, development proposals should meet national standards relevant to the development. These include Natural England standards on accessible green space and urban greening factor and Green Flag criteria.”
According to paragraph 155, these will apply “Where major development takes place on land which has been released from the Green Belt through plan preparation or review, or on sites in the Green Belt permitted through development management”. This refers to major development. However, paragraph 152 in respect of Grey Belt appears to refer to all potential development on Grey Belt needing to meet these Golden Rules.
The Government considers that “Green Belt land can deliver more affordable housing, infrastructure and environmental contributions, as the value of the land in its existing use is generally low and the Green Belt designation reduces the hope value associated with the prospect of securing planning permission.” However, it does acknowledge that contributions that can be secured will vary because of varied house prices, abnormal costs, CIL rates or higher existing use values and therefore, they believe that “it is necessary to allow the limited use of viability assessments, where negotiation is genuinely needed for development to come forward, particularly in relation to affordable housing requirements. However, this cannot be an excuse to inflate landowner or developer profits at the expense of the public good”.
Additional guidance on viability considerations for development in the Green Belt is provided in Annex 4. This is headed “Viability in Relation to Green Belt release”. It proposes to set a specific benchmark land value.
It also provides that:
“- if land released from Green Belt is transacted above the benchmark land value and cannot deliver policy-compliant development, then planning permission should not be granted, subject to other material considerations;
– if policy compliant development can be delivered, viability assessment should not be undertaken, irrespective of the price at which land is transacted, and higher levels of affordable housing should not be sought on the grounds of viability;
-Where land is transacted below the benchmark land value but still cannot deliver policy- compliant development, it is up to the applicant to demonstrate whether particular circumstances justify the need for a viability assessment at the application stage. The weight to be given to a viability assessment is a matter for the decision maker, having regard to all the circumstances in the case, including whether the plan and the viability evidence underpinning it is up to date, and any change in site circumstances since the plan was brought into force. Where a viability negotiation to reduce policy delivery has been undertaken, a late-stage review should be conducted to assess whether further contributions are required.”
The consultation notes that there is a spectrum of views of appropriate premia above existing use value ranging between 3 times EUV to 10-40 times EUV. The Government is “particularly interested in the impact of setting BLV at the lower end of this spectrum.”
The consultation then immediately goes on to mention the potential for the use of compulsory purchase powers where such land is not brought forward on a voluntary basis. In this case compensation would be assessed under the statutory no-scheme principle rules set out in Part 2 of the Land Compensation Act 1961 so that any increases or decreases in the value of land caused by the proposed scheme would be ruled out. The “hope value” for alternative development would reflect the “Golden Rules” set out above. However, the consultation also states that “Use of compulsory purchase powers may also include use of directions to secure ‘no hope value’ compensation where appropriate and justified in the public interest. A comprehensive justification for a no hope value direction (e.g., which includes a high proportion of vital affordable housing being delivered) will strengthen the argument that a direction is in the public interest. This would align with the Government’s aspiration for high levels of affordable housing to be delivered on these sites.”
Question 43 asks “Do you have a view on whether the golden rules should apply only to ‘new’ Green Belt release, which occurs following these changes to the NPPF? Are there other transitional arrangements we should consider, including, for example, draft plans at the regulation 19 stage?”. As drafted, it is not clear when the Golden Rules, or the provisions of Annex 4 will apply. At present, when land is released from the Green Belt through the plan making system, Green Belt policies no longer apply. However, the proposed provisions are drafted to apply to “land released from Green Belt” so it will be important to have clear transitional provisions.
The Government’s clear intention expressed through the consultation is that development on Green Belt land is to be held to a higher standard and cannot be permitted without delivering a public benefit in the form of affordable housing, mitigating its own infrastructure impacts, and not undermining the overall strategic function of the designation.
As Zack Simons noted in his LinkedIn post this morning (27 July 2024), there was a detailed story in today’s Times as to what will be in the consultation draft revised NPPF. As Zack summarises:
“- Tuesday’s the day.
– 8 week consultation, new NPPF adopted late September.
– “Mandatory housing targets” going up by 50%.
– That’s a circa 100,000 home national increase to what we now call “local housing need”. Changes include: (i) “toughened” affordability ratios “to take account of how many people might move into an area if housing was cheaper”, and (ii) no use of “previous oversupply of housing to reduce future targets”.
– Councils “must review protections for the green belt if they cannot meet their housing need on brownfield land”.”
It’s such a detailed story that depressingly the new Government is obviously continuing the previous Government’s routine practice of trailing imminent significant announcements in the weekend newspapers as unattributed news stories rather than first announcing them in Parliament. Easy spin, easy journalism.
However, the story is totally and deliberately useless as anything that can yet be relied upon.
Here are some of the things I’ll be looking to understand on Tuesday (no surprise it’s Tuesday: that’s when the House of Commons rises for the summer):
I assume that the consultation document will be accompanied by a ministerial statement setting out the Government’s policy objectives underlying the document. This is important because, subject to anything specified to the contrary, then the statement and at least the direction of travel demonstrated by the draft is capable of being a material consideration in the determination of planning applications and appeals, with the weight to be given to it a matter for the decision maker. Depending on its potential relevance to current applications and appeals, the decision maker may choose to invite representations as to the implications for the particular application or appeal of what has been published, and, indeed, in some circumstances decisions may be susceptible to legal challenge if such an announcement is “obviously material” and not taken into account. So as much as its content, what will be important will be the tone of the consultation (is the consultation just about detailed wording or is it more open-minded, testing alternative potential approaches?) and of the accompanying statement or statements (particularly, what is said about its immediate intended effect). (And incidentally what we don’t want is for decision-makers to conclude that they need to wait for the final version!)
What transitional arrangements, if any, are proposed in relation to emerging and adopted local plans before their policies are to be treated as out of date by virtue of the new policies and targets? After all, we still have a plan-led system.
To what extent will the requirement that councils “must review protections for the green belt if they cannot meet their housing need on brownfield land” simply be a peeling back of the December 2023 revision to the NPPF?
If local housing targets are going to be increased, does this mean that the consultation process will include (long awaited) proposed revisions to the standard method? If so, how extensive will the changes be? For instance will the 35% uplift remain for England’s 20 largest towns and cities?
Is this going to be a “big bang” set of NPPF changes delivering on all that has been previously trailed by Labour, for instance giving some reality to the “grey belt” notion, or (possibly more pragmatically) are we to expect a further set of revisions before long, possibly alongside a proposed initial set of national development management policies and/or alongside guidance to reflect the amended local plans system enabled by the Levelling-up and Regeneration Act?
What about anything other than housing?
When really will we see the final version? Eight weeks’ consultation takes us to the end of September. To avoid an obvious legal challenge, the Government will need to consider properly the representations received (and there will be many). My bet is that the final version will be October at the earliest (12 October is the 100th day after the election and they will be going very fast to publish by then…).
Anyone else remember the annual Beaujolais Nouveau races? That used to be how the industry routinely did business development, for better or worse, before we all became amateur journalists. These days its more sober and less fun replacement is the “who can get their NPPF text mark-up up first on LinkedIn” game. But that’s a young person’s sport. I’ll be truffle-hunting instead for the answers to those seven questions.
That Rachel Reeves speech today (8 July 2024) is here in full. The key passages in relation to planning reform:
“Nowhere is decisive reform needed more urgently than in the case of our planning system.
Planning reform has become a byword for political timidity in the face of vested interests and a graveyard of economic ambition.
Our antiquated planning system leaves too many important projects getting tied up in years and years of red tape before shovels ever get into the ground.
We promised to put planning reform at the centre of our political argument – and we did.
We said we would grasp the nettle of planning reform – and we are doing so.
Today I can tell you that work is underway.
Over the weekend, I met with the Prime Minister and the Deputy Prime Minister to agree the urgent action needed to fix our planning system.
Today, alongside the Deputy Prime Minister, I am taking immediate action to deliver this [political content removed] government’s mission to kickstart economic growth;
And to take the urgent steps necessary to build the infrastructure that we need, including one and a half million homes over the next five years.
The system needs a new signal. This is that signal.
First, we will reform the National Planning Policy Framework, consulting on a new growth-focused approach to the planning system before the end of the month, including restoring mandatory housing targets.
And, as of today, we are ending the absurd ban on new onshore wind in England. We will also go further and consult on bringing onshore wind back into the Nationally Significant Infrastructure Projects regime, meaning decisions on large developments will be taken nationally not locally.
Second, we will give priority to energy projects in the system to ensure they make swift progress…
… and we will build on the spatial plan for Energy by expanding this to other infrastructure sectors.
Third, we will create a new taskforce to accelerate stalled housing sites in our country…
…beginning with Liverpool Central Docks, Worcester Parkway, Northstowe and Langley Sutton Coldfield, representing more than 14,000 homes.
Fourth, we will also support local authorities with 300 additional planning officers across the country.
Fifth, if we are to put growth at the centre of our planning system, that means changes not only to the system itself, but to the way that ministers use our powers for direct intervention.
The Deputy Prime Minister has said that when she intervenes in the economic planning system, the benefit of development will be a central consideration and that she will not hesitate to review an application where the potential gain for the regional and national economies warrant it.
… and I welcome her decision to recover two planning appeals already, for data centres in Buckinghamshire and in Hertfordshire.
To facilitate this new approach, the Deputy Prime Minister will also write to local mayors and the Office for Investment to ensure that any investment opportunity with important planning considerations that comes across their desks is brought to her attention and also to mine.
The Deputy Prime Minister will also write to Local Planning Authorities alongside the National Planning Policy Framework consultation, making clear what will now be expected of them…
…including universal coverage of local plans, and reviews of greenbelt boundaries. These will prioritise Brownfield and grey belt land for development to meet housing targets where needed.
And our golden rules will make sure the development this frees up will allow us to deliver thousands of the affordable homes too, including more for social rent.
Sixth, as well as unlocking new housing, we will also reform the planning system to deliver the infrastructure that our country needs.
Together, [political content removed] we will ask the Secretaries of State for Transport and Energy Security and Net Zero to prioritise decisions on infrastructure projects that have been sitting unresolved for far too long.
And finally, we will set out new policy intentions for critical infrastructure in the coming months, ahead of updating relevant National Policy Statements within the year.
I know that there will be opposition to this.
I’m not naïve to that;
And we must acknowledge that trade offs always exist: any development may have environmental consequences, place pressure on services, and rouse voices of local opposition.
But we will not succumb to a status quo which responds to the existence of trade-offs by always saying no, and relegates the national interest below other priorities.”
That reference to “ending the absurd ban on new onshore wind in England” has been given effect by a DLUHC policy statement on onshore wind (8 July 2024), removing – with immediate effect – the additional tests that have applied to on-shore wind as opposed to other energy proposals, namely that the proposal has policy and community support.
I support grassroots music venues. I’ve blogged a few times in the past about the agent of change principle. And I’ve just read today’s report by the House of Commons Culture, Media and Sport Committee on the steps it recommends to halt the worrying rate at which these venues are closing (two a week and the total number in the country declining last year from 960 to 835), which includes recommendations to strengthen the agent of change principle. Music Venue Trust has played a vital role in drawing attention to the issue.
As with many public policy issues (housing, the economy, climate change, inequality, health disparities), we in our planning bubble need to remember that when it comes to protecting the conditions for grassroots culture to flourish, whether for its own sake or to grow the next stadium acts, the operation of the planning system is only one part of the problem – but the planning system does need to put its shoulder to the wheel.
The report includes calls for:
A comprehensive review by the Government (by summer 2024!) to fully examine the long-term challenges to the live music ecosystem
A voluntary levy on large venues by September 2024 and “if a widespread voluntary levy is not in place by September 2024, or if its level does not stem the tide of closures, the Government should introduce a statutory scheme.”
Temporary VAT cut and simplification of processes for grant applications, as well as resolution of disputes within the industry on performing rights payments and the like.
Placing the “agent of change” principle, which has been in the National Planning Policy Framework since 2018, on a statutory basis.
Briefly on that last point, the agent of change principle forms paragraph 193 of the current NPPF:
“Planning policies and decisions should ensure that new development can be integrated effectively with existing businesses and community facilities (such as places of worship, pubs, music venues and sports clubs). Existing businesses and facilities should not have unreasonable restrictions placed on them as a result of development permitted after they were established. Where the operation of an existing business or community facility could have a significant adverse effect on new development (including changes of use) in its vicinity, the applicant (or ‘agent of change’) should be required to provide suitable mitigation before the development has been completed.”
Paragraphs 90 to 95 of the report consider how the policy is applying in practice. It was recognised that policy represented progress, however concern as to how local planning authorities interpret and apply it. The Committee supported calls for it to be given more teeth by way of being placed on a statutory footing “at the earliest opportunity”.
Everyone of course calls for legislation about everything. I hope that any subsequent Government review examines this specific aspect in more detail: to what extent is the policy not working and in what respects and in what ways would legislation assist without unintended consequences?
Those with long memories may recall that Labour tried to include such a provision into the Housing and Planning Bill back in 2016.
Just reflecting on what we gain from protecting and encouraging these venues (have you been to the relatively new, cosy but fabulous, Lafayette venue in Argent’s Kings Cross development?), it’s not just about nurturing artists – one great quote from the report, courtesy of a participant from Manchester: “Taylor Swift’s lighting director didn’t start out as Taylor Swift’s lighting director”.
These venues can sometimes even be the catalyst for the rebirth of a whole city – I recommend the excellent book Manchester Unspun – How A City Got High On Music by Andy Spinoza for a description of possibly the world’s most extreme version of this (and let’s not currently mention Co-op Live shall we?).
(from The Rime of the Ancient Mariner, by Samuel Taylor Coleridge, 1834)
But that’s all I’m going to say about MIPIM. This post is just a toe dip into (1) flood risk and (2) water scarcity.
Water Water Everywhere
Government policy on planning and flood risk is set out in paragraphs 165 to 175 of the current December 2023 version of the NPPF, supplemented by Government’s Planning Practice Guidance on flood risk and coastal change. The Environment Agency is the Government’s statutory planning consultee on flood risk issues.
The proper interpretation of the Government’s policy on flood risk, and in particular on the risk-based sequential approach to locating development which is at the heart of it, was considered in two recent cases. In relation to each of them I am simply going to point to the relevant Town Library summary (to subscribe for free to our weekly case law and other summaries click here ).
My colleague Jack Curnow summarised this case here. This was a legal challenge to two development consent orders for the construction of the East Anglia ONE North and East Anglia TWO Offshore Wind Farms together with associated onshore and offshore development. The environmental statement for the project dealt with flooding from surface water stated that the onshore substations and National Grid Infrastructure were located in areas primarily at low risk of surface water flooding, with some permanent infrastructure (parts of access roads) likely to cross areas at both high risk and medium risk of surface water flooding, with appropriate mitigation measures within the design to address any remaining surface water flood risk concerns. The court held that the sequential approach does not apply to the risk of flooding from surface water, as opposed to the risk of fluvial flooding. Whilst the risk of flooding from surface water is to be taken into account when deciding whether to grant development consent, that is a matter of planning judgment for the decision maker.
My colleague Chatura Saravanan summarised this case here. This case dealt with two challenges to inspectors’ decision letters:
a) a decision to dismiss the appeal by Mead Realisations Limited against the refusal by North Somerset Council for a residential development of up to 75 dwellings; and
b) a decision to dismiss the appeal by Redrow Homes Limited against the refusal by Hertsmere Borough Council for a residential development of up to 310 units and other facilities.
The claims were heard together as they raised the common central issue of what is the correct interpretation and application of the flood risk sequential test. Specifically, Mead and Redrow argued that the Inspectors misinterpreted paragraph 162 (now 168) of the NPPF in identifying what might be “reasonably available” sites under the sequential approach, in that they applied the guidance in paragraph 028 of the PPG, which conflicted with paragraph 162 of the NPPF. This raised the question of whether the PPG did indeed conflict with the NPPF and, if so, whether the NPPF should supersede the PPG.
Holgate J held that there was no rule that the PPG could not be inconsistent with the NPPF:
“As a matter of policy, PPG is intended to support the NPPF. Ordinarily, therefore, it is to be expected that the interpretation and application of PPG will be compatible with the NPPF. However, I see no legal justification for the suggestion that the Secretary of State cannot adopt PPG which amends, or is inconsistent with, the NPPF”.
However he held that in any event there was no conflict in any event:
“The PPG performs the legitimate role of elucidating the open-textured policy in the NPPF. The PPG describes “reasonably available sites” as sites “in a suitable location for the type of development with a reasonable prospect that the site is available to be developed at the point in time envisaged for the development.” The PPG provides for issues as to suitability of location, development type, and temporal availability to be assessed by the decision-maker as a matter of judgment in accordance with the principles set out above. In this context, the PPG correctly states that “lower-risk sites” do not need to be owned by the applicant to be considered “reasonably available.” That is consistent with the need for flexibility on all sides.”
For a number of more detailed arguments raised by the claimants (and all rejected), it’s worth reading the case itself or Chatura’s summary.
Nor Any Drop To Drink
Water scarcity is becoming one of those worrying “neutrality” issues which can cut across the more familiar uncertainties of the planning system – see the ongoing issues in Sussex referred to in my 9 October 2021 blog post Development Embargos: Nitrate, Phosphate & Now Water .
Another area where water scarcity concerns have been raised is of course Cambridge (where Samuel Taylor Coleridge was an undergraduate at Jesus College between 1791 and 1794 – these blog posts aren’t just thrown together). The Secretary of State’s 24 July 2023 long-term plan for housing committed to “transformational change” in Cambridge:
“Proposals will see Cambridge supercharged as Europe’s science capital, addressing constraints that have left the city with some of the most expensive property markets outside London, and companies fighting over extremely limited lab space and commercial property with prices that rival London, Paris and Amsterdam.
These ambitious plans to support Cambridge include a vision for a new quarter of well-designed, sustainable and beautiful neighbourhoods for people to live in, work and study. A quarter with space for cutting-edge laboratories, commercial developments fully adapted to climate change and that is green, with life science facilities encircled by country parkland and woodland accessible to all who live in Cambridge.
Any development of this scale will have substantial infrastructure requirements. The government will deliver as much of the infrastructure and affordable housing as possible using land value capture – with the local area benefiting from the significant increase in land values that can occur when agricultural land is permitted for residential and commercial development. Land values will reflect the substantial contributions required to unlock the development (see annex).
A Cambridge Delivery Group, chaired by Peter Freeman and backed by £5 million, will be established to begin driving forward this project. The Group will work to turn this vision into a reality, taking a lead on identifying the housing, infrastructure, services and green space required. It will also consider options for an appropriate delivery mechanism that will be needed to lead the long-term work on planning, land acquisition and engagement with developers, starting in this Parliament but running through the next few years as development takes shape.”
The Delivery Group was to “take forward immediate action to address barriers such as water scarcity across the city, including:
Convening a Water Scarcity Working Group with the Environment Agency, Ofwat, central and local government and innovators across industries to identify and accelerate plans to address water constraints. The Group will include all relevant partners to understand what it would take to accelerate building the proposed new Fens Reservoir and enabling Cambridge to reach its economic potential.
Supporting the council in efforts to make sure new developments proposed as part of the local plan can be as sustainable as possible, including whether new houses in planned developments such as Waterbeach and Hartree can be made more water efficient. To support this, the government is announcing today a £3 million funding pot to help support measures to improve the water efficiency of existing homes and commercial property across Cambridge, to help offset demands created by new developments in the local plan.
The government will also take definitive action to unblock development where it has stalled, providing £500,000 of funding to assist with planning capacity. Cambridge City Council, Anglian Water, Land Securities PLC and Homes England will work together to accelerate the relocation of water treatment works in Northeast Cambridge (subject to planning permission), unlocking an entire new City quarter – delivering approaching 6,000 sustainable well-designed homes in thriving neighbourhoods – as well as schools, parks and over 1 million square feet of much needed commercial life science research space.”
“Our first priority is water scarcity, which is holding back development and risks causing environmental harm. It is vital that the city has the water supply it needs to support long-term growth, including a new reservoir in the Fens and a new pipeline to transfer water from nearby Grafham Water. We are also making a one-off intervention to support growth in the shorter-term by delivering water savings through improved water efficiency of appliances in existing buildings that can offset new homes and commercial space.
The government will:
Deliver a unique offsetting intervention to save water now through improving efficiency and support sustainable growth – set out in detail in a paper published alongside this document.
Issue a joint statement from the Environment Agency, Greater Cambridge Shared Planning, DLUHC and Defra, outlining our commitment to sustainable growth and development on the basis of our water credits scheme.
Appoint Dr Paul Leinster to chair the Water Scarcity Group to advise the government on future water resource options, including the reservoir in the Fens and the Grafham Water pipeline.”
Alongside the case for Cambridge document, a joint statement between DLUHC, Defra, the Environment Agency and Greater Cambridge councils (Cambridge City and South Cambridgeshire districts) on measures to address water scarcity issues in the area was published on the same day, setting out its proposed scheme to develop, and help to fund, a water credits market “intended to provide greater certainty through:
a. The delivery of water savings measures in the Cambridge Water operating area, supported by the government’s spending.
b. A robust water credit system being in place to assure those water savings and issue credit certificates to developers and housebuilders.
c. Application of enforceable planning mechanisms so that planning permissions are linked to water savings measures in a robust way.”
The focus is of course welcome but water scarcity is increasingly going to be a challenge facing us in many parts of the country– see for instance this 4 September 2023 FT article The UK is at risk of running low on water. Why? (although the answer to the question in the heading to the article may lie in its sub-heading: “A country famous for its rainy climate faces grave supply issues, after years of poorly managed systems”…)
Quite a week. I was going to write about the London Mayor’s Large-scale Purpose-built Shared Living London Plan Guidance (29 February 2024) – less prescriptive in relation to co-living than his initial draft as a result of constructive engagement with the industry, well received and good to see – or indeed the Competition and Markets Authority’s final report into housebuilding in England, Scotland and Wales (26 February 2024) – the best analysis of the house building and land promotion industry and indeed opportunities to reform the planning system that I have read. But all that will need to wait because one case has dominated the chat in the last day or so:
This was of course the legal challenge by M&S to the Secretary of State’s refusal of the retailer’s application, which he had called in, for planning permission for the construction of a nine storey new mixed office and retail store to replace its existing store at the western end of Oxford Street.
As to the various stages in the decision making process which led to the Secretary of State’s decision, together with an initial critique at the time of that decision (as well as the statement at the time from the M&S chief executive who had described Mr Gove’s decision as taken “on the whim of one man” and “utterly pathetic”) see my 21 July 2023 blog post, M&S Mess.
Russell Harris KC and Heather Sargent acted for M&S on the legal challenge, together with Dentons. Well done all for the outcome. For the pithiest and precise summary of the outcome you cannot beat Heather’s LinkedIn post yesterday:
“Lieven J has held that:
– The Secretary of State’s statement that “there should generally be a strong presumption in favour of repurposing and reusing buildings, as reflected in paragraph 152 of the [2021 NPPF]” was a misinterpretation of the NPPF and an error of law;
– The Secretary of State unlawfully failed to explain why he disagreed with his Inspector’s conclusions that there was no viable and deliverable alternative to the redevelopment scheme proposed by M&S;
– The Secretary of State unlawfully failed “to grapple with the implications of refusal and the loss of the benefits and thus departure from important Development Plan policies”;
– The Secretary of State unlawfully failed to provide adequate reasons for concluding (again in disagreement with his Inspector) that the harm to the vitality and viability of Oxford Street if M&S’s scheme (or an alternative) were not delivered would be “limited”; and
– The Secretary of State’s decision was also vitiated both by a factual error (namely, an erroneous understanding that there was no dispute that the proposed scheme would involve much greater embodied carbon than refurbishment) and by a misinterpretation of development plan policy on carbon. The judgment confirms that it is “clear beyond any rational doubt … that the offsetting requirements in [London Plan policy] SI 2C are in relation to operational carbon, and not embodied carbon”.
My (possibly unfairly) selective quote in the title to this blog post is from paragraph 116 of Lieven J’s judgment where she reports his apparent misunderstanding that the London Plan’s requirement for carbon off-setting applies to embodied carbon rather than just operational carbon (ground 5). She goes on to conclude:
“120 It would be astonishing if one of the key policies in the London Plan on carbon emissions could have suddenly expanded the scope of the off-setting requirements in such a significant way without anyone applying it in this way before. The approach of the SoS appears to believe that there is a “net zero” requirement of, or at least aspiration for, construction impacts, in a key Development Plan policy which has never previously been applied.
121 It is important to make clear that this case is not about whether or not it would be appropriate or justified to have such a policy in the light of the climate emergency. Such a judgement is not the function of the court. The issue for the court is whether the SoS erred in law by misinterpreting the adopted London Plan policy.”
The only further comment I would add at this point is that this saga is not yet at an end. The effect of the judgment is that (absent any application by the Government Legal Department to the Court of Appeal for permission to appeal) the application goes back to the Secretary of State to be redetermined. No doubt the parties will need to be given the opportunity to make further representations. It will take months. Indeed, who will be the Secretary of State by then?
Paragraph 152 of the previous version of the NPPF, on which ground 1 turned, survives unchanged as paragraph 157 of the latest version of the NPPF but will any relevant policy changes be made before the final outcome of the redetermination process? We know from the Government’s December 2023 Future Homes and Buildings Standards consultation:
“ Embodied carbon, the carbon emissions generated from the production and transportation of building materials, construction process and maintenance of a building – is beyond the scope of this consultation and the existing Building Regulations. We recognise, however, that embodied carbon is a significant contributor to the whole life carbon of a building and that it is therefore crucial that we take steps to address it. The government intends to consult on our approach to measuring and reducing embodied carbon in new buildings in due course” (paragraph 1.1.4)
At a local level, and as an example of how life constantly edges on, Westminster City Council also adopted on 28 February 2024 (I said it was a busy week) its new Planning Obligations and Affordable Housing SPD, which is intended to become a material consideration in decision making from 7 March 2024, with, amongst other things, a swingeing increase in carbon off-set payments (see brief Westminster Property Association explainer here).
The Secretary of State’s call-in of this application in June 2022 will so far have caused (assuming, which is not in the bag yet, that planning permission is eventually granted) at least two years’ delay, vast expense and delay for M&S as well as opportunity cost for the most important traditional shopping street in the nation’s capital (for which there is no financial recompense for M&S or for London). There really should be a higher threshold for call-in by the Secretary of State (whatever his or her political persuasion) of decisions which are referable to the Mayor of London (whatever his or her political persuasion). And the “behind the scenes” weighing of planning considerations/political advantage which leads to decisions such as this and that in relation to the Television Centre (see my 9 February 2024 blog post, The Weighting Game) is unfathomable (a word which I was relieved to see I used in my M&S Mess post last year about the Secretary of State’s reasoning on some aspects in his M&S decision).
Finally on this subject, whether as a thumbs up to that M&S legal team, or as a general thank you tip for us planning law bloggers, or as a gesture of support to Russell Harris and most importantly the young people’s charities he is supporting by way of this mad thing, please do sponsor Russell’s Cycle to MIPIM 2024 . He and the rest of them will no doubt shortly setting out and would appreciate any support. When I last looked, he was about £1,500 short of his £11,000 target. As another retailer might say, every little helps.
“Building homes on brownfield land will be turbocharged under a major shake-up to planning rules to boost housebuilding while protecting the Green Belt. “
For a concise summary of today’s DLUHC announcements and all the links, see my Town Legal colleague Susie Herbert’s post.
I have seen some understandable cynicism about the proposed changes – along the lines of “it’s motivated by the politics” (obviously in part yes); and/or “it’s in dribs and drabs, why couldn’t this have been done as part of the December 2023 NPPF changes?” (well yes, although maybe better late than never?); and/or ”none of it will make a difference” (I’ll declare an interest having assisted British Land and Land Sec in a small way last year with their report More Growth, More Homes, More Jobs: how to reform the planning system to unlock urban regeneration – but I would have said this anyway – I think the announced changes could well make a difference – and in fact there are plenty more within that report that are worthy of consideration!).
There is of course already existing policy encouragement (albeit rather general) in paragraph 124 (c) of the NPPF, which states that planning policies and decisions should “give substantial weight to the value of using suitable brownfield land within settlements for homes and other identified needs.”
The Government proposes to strengthen that message with the following additional wording within paragraph 129 (c):
“local planning authorities should refuse applications which they consider fail to make efficient use of land, taking into account the policies in this Framework, especially where this involves land which is previously developed. In this context, when considering applications for housing, authorities should give significant weight to the benefits of delivering as many homes as possible and take a flexible approach in applying planning policies or guidance relating to daylight and sunlight and internal layouts of development, where they would otherwise inhibit making the most efficient use of a site (as long as the resulting scheme would provide acceptable living standards).” [new passages underlined]
I do think this does move the dial further with those references to “delivering as many homes as possible” and (particularly in London) the “flexible approach in applying planning policies or guidance relating to … internal layouts of development”.
The dial will then move into full “tilted balance” paragraph 11 (d) territory for those boroughs in London and those other 19 towns and cities subject to the urban uplift, where their Housing Delivery Test results (to be published in May) indicate that their delivery of housing was below 95% of the housing requirement over the previous 3 years.
This strengthening of the tests is likely to make a difference (even during this consultation period): it will influence the way that planning committees are advised when they come to make decisions; it will focus a broader spread of authorities on the potential consequences of not meeting delivery targets (admittedly not fully within their control, but certainly partly), and it will certainly influence how inspectors and the Secretary of State approach appeals and call-ins.
In London there is also much good analysis in the excellent report prepared by Christopher Katkowski KC and his panel. From the executive summary:
“6 The consequences of housing under-delivery have significant economic, societal and personal impacts, not least on those who face no alternative option but homelessness (living in temporary accommodation), or who are forced into poor-quality rental accommodation.
7 Public and private sector stakeholders are clear in their view that the London Plan is not the sole source of the problem: wider macro-economic conditions; fire safety; infrastructure constraints; statutory consultees; viability difficulties; and planning resourcing pressures have all contributed.
8 However, there is persuasive evidence that the combined effect of the multiplicity of policies in the London Plan now works to frustrate rather than facilitate the delivery of new homes, not least in creating very real challenges to the viability of schemes. We heard that policy goals in the Plan are being incorrectly applied mechanistically as absolute requirements: as ‘musts’ rather than ‘shoulds’. There is so much to navigate and negotiate that wending one’s way through the application process is expensive and time-consuming, particularly for SMEs who deliver the majority of London’s homes.
9 This position is exacerbated by the change in context since the London Plan was formulated. The London Plan’s ‘Good Growth’ policies were advanced on the basis of public and private sector investment assumptions that were described in 2019 as being “ambitious but realistic” by the London Plan Inspectors. But planning and housing delivery indicators suggest this strategy has not been sufficiently resilient to the subsequent change in circumstances. Housing schemes (and decision makers on applications) have struggled to reconcile the multiple policy exhortations, which create uncertainty and delay in the preparation, submission and determination of planning applications.”
Many will also welcome the Secretary of State including within his consultation paper the question as to whether the threshold for referral of applications to the Mayor should be raised:
“As part of the large scale development theme, a threshold for large scale residential development was first set in the previous regulations in 2000 as development providing more than 500 houses, flats, or houses and flats or residential development on more than 10 hectares. In 2008, this threshold was reduced to 150 houses, flats or houses and flats.
Through engagement, the government is aware that in some instances this threshold is considered to be too low, requiring what may amount to duplicative interactions by developers with the relevant London Borough and with the Greater London Authority which is not always considered proportionate to the nature of the development in question.
The government wants to make sure that this threshold is set at the right level, in order that it adds value to the process of determining applications for potential strategic importance (especially for residential development), and does not inadvertently slow down or disincentivise developments that could be appropriately determined by the London Borough.”
In conclusion, will building homes on brownfield land be “turbocharged under a major shake-up to planning rules”? It’s more a ratcheting-up of policy than a “major shake-up to planning rules” (thankfully). And whilst I refuse to engage with that ridiculous, very Boris Johnson, word “turbocharged” and whilst this is a very late initiative for a Government that is fast running out of road, let’s hope there is at least some acceleration as a result.
SIMONICITY 