Autumn Statement: mood music?

In the absence of the Housing White Paper, the industry is still left needing to mind the gap.  We have simplified budgets – abolishing the Autumn Statement – but no hint of simplified planning for growth.

The overall commitment to housing is welcome mood music, but the lack of detail on powers and fiscal incentives to support locally-led Garden Towns to deliver at the scale needed leaves a hole.  Expanding grant funding for affordable tenures is great news but at £25,000 per unit is not going to be life changing.

hamThe £2.3bn Housing Infrastructure Fund could be a game changer if it is used to reward areas for proactively planning for growth. Making an up to date housing land supply a condition for at least some of the funding would dangle the right carrot for authorities that currently only have the stick. The lack of fiscal measures for new settlements – incentivising forward funding of major infrastructure that can unlock delivery at real scale – is disappointing though.

Affordable Housing is heading towards life support – delivery in 2015-16 was 52% lower than last year.  The announcement in the Autumn Statement of a funding injection to deliver 40,000 affordable homes is welcome. It is a clear recognition that addressing the housing shortage is not simply about building more homes.  Yes, we need more but they must meet a variety of needs. There are further signals of a softening of the Government’s stance on Starter Homes – tenure flexibility replacing David Cameron’s commitment to a single tenure.

Without the Housing White Paper, there is also still a wait to see how the NPPF is going to be reshaped and in particular how housing land supply and Local Plan duties will be re-set following expert advice on accelerating delivery. If the Community Infrastructure Levy is to be replaced by a simplified flat national charge, the effect on infrastructure funding and the transitional arrangements need to be understood now, so that schemes in the pipeline do not get put into suspended animation.

The statement gives some clues about the Government’s direction of travel but, funding commitments aside, offers little substance.  We still await the detail in the Housing White Paper which we are told will be published “soon”.  Reasons for the delay are unclear. Have responses to leaks on more radical measures, such as penalising developers for slow delivery, prompted a re-think?

Vacant Building Credit – an own goal?

Vacant Building Credit (VBC) was re-introduced into the NPPG in May 2016 to less vocal opposition than it faced when originally introduced following a Ministerial Statement in November 2014.  The Statement remains intact following the Court of Appeal’s ruling that it should stand.

The broad premise of  VBC is that is acts as a credit which can be offset against the affordable housing requirement of new development.  The credit is equivalent to the existing gross floorspace of a vacant building brought back into use or demolished for redevelopment purposes.  However, neither ‘abandoned’ buildings or those vacated for the sole purpose of redevelopment are able to benefit from VBC.

Unhelpfully, the NPPG gives no guidance on how VBC is intended to be applied.  Two immediate issues arise:

  • buildWhat is meant by “vacant”?  There is a concern that VBC will incentivise landlords to force the vacation of offices, industrial buildings or even houses to benefit from VBC.  There is also little assistance on where the line can be drawn to assess whether a building is “vacant” or “abandoned”.
  • What is meant by the “gross floorspace” of the vacant building – GIA over GEA?  Once that has been confirmed, how that floorspace should be applied to calculate the off-set?

As a consequence, local authorities are left to make sense of how to apply VBC, and inevitably are creating methods and policies for approaching VBC in a way which will minimise its impact on affordable housing delivery.  Emerging practice includes:

(i)         interpreting “vacant” as being opposite to the “in use” building test set out in the CIL Regulations.  This ensures that a development is unable to benefit from both VBC and the demolition credit which can reduce the amount of CIL payable;

(ii)         requiring the entire building to be vacant, not just part of it;

(iii)        requiring the building for which VBC has been sought to have been actively marketed for a specified period (and for the method and details of marketing to be provided);

(iv)        requiring details of existing floorspace to be provided on a GIA basis when a planning application is submitted.

Of those local authorities that are putting in place policies for calculating VBC, it is clear that there is no standard approach; others will be reviewing whether they apply VBC at all.  The West Berkshire appeal confirmed that the VBC policy is a material consideration and is not capable of being applied in a “blanket” manner; many local authorities will be taking comfort from this, possibly even reviewing how Local Plan policies can be formulated to disapply VBC altogether.

VBC was introduced on the basis it would assist smaller developers deliver viable schemes, however the Government has failed again to build the necessary clarity into the guidance to ensure that it is only small developments which benefit from VBC.

Left to local authorities to put in place their own mechanisms provides no guarantee that VBC will assist those it was intended to; as a consequence VBC’s long-term impact on affordable housing remains potentially damaging at a time when the need for affordable homes remains critical, while the ability to rely on it to bring forward otherwise uneconomic schemes remains unclear.

High Court clarifies application of presumption in favour in heritage harm case

high courtThe High Court has provided further guidance on the application of the presumption in favour of sustainable development (paragraph 14 of the NPPF) in Forest of Dean District Council v Secretary of State for Communities and Local Government & Another [2016] EWHC 421 (Admin). The case is helpful for authorities resisting appeals where there is an absence of five year housing land supply.

Permission was granted on appeal for a housing scheme in the absence of a five year housing land supply (HLS). The Inspector applied NPPF49 (which engages the NPPF14 presumption in the absence of a 5 year HLS). The presumption recommends approval where there is no 5 year HLS, unless “the adverse impact of doing so would significantly and demonstrably outweigh the benefits, … or specific policies in the NPPF indicate that development should be restricted.” That includes where the plan has only recently been adopted (Woodcock Holdings Limited v Secretary of State for Communities and Local Government and Anor [2015] EWHC 1173 (Admin)).  NPPF126 to 134 provide specific policies on designated heritage assets.  NPPF134 requires less than substantial harm “to be weighed against the public benefits of the proposal…“.

The scheme was acknowledged to cause ‘less than substantial’ harm to the character and appearance of a nearby Grade II listed farmhouse. The Inspector treated that harm as outweighed by the overall public benefits. The authority’s grounds of challenge under section 288 of the Town and Country Planning Act 1990 included that he had wrongly applied the presumption, by failing to treat NPPF134 as a policy indicating that development ‘should be restricted’.

Coulson J held that NPPF134 is a policy “restricting development” (despite the fact that it does not contain a restriction), interpreting that phrase broadly.  With the presumption disengaged, an “unweighted” cost-benefit balancing exercise must be undertaken.

The finding of harm (regardless of whether it is “substantial” for NPPF purposes) gives rise to a statutory, albeit rebuttable, presumption against the grant of consent (South Lakeland District Council v Secretary of State for the Environment and Another [1992] 2 AC 141) being outweighed by material considerations. Applying the first, weighted, limb on its own meant that it was likely that the wider statutory presumption of refusal where there is any harm to designated heritage assets had been lost.

There is likely to be a broadening of the search for ‘restrictive’ policies in defending refusals. That said, where the decision taker has concluded that there is inadequate HLS and the overarching legal hurdle to approving less than substantial harm has been cleared, it should ultimately make little difference to the outcome.

Timely delivery for regeneration projects

man building a brick wallThe Winchester Silver Hill scheme was based on a development agreement between Winchester City Council and a developer for a mixed-use retail and residential scheme in the city centre.  While the principle of regeneration for Silver Hill was widely agreed, this scheme was bitterly opposed by some residents (and local businesses and landowners), primarily on the grounds that the design and mass of the development was inappropriate for the historic setting of Winchester’s city centre.

Here we consider some of the legal issues and challenges that local authorities can face as they attempt to regenerate their localities, taking lessons from this well-documented scheme.

Read the full article

This article was first published in the Solicitor’s Journal Half Year Review (June 2016).

Ready, steady… build!

On April Fool’s Day, we suggested – with a perfectly straight face – that the conditions may be in place for a return to the glory days of local authority house building.

Less than four months on, we find ourselves with:

  • a new Prime Minister;
  • a new Secretary of State for Communities and Local Government;
  • a new Minister for Housing and Planning,
  • a new London Mayor; and
  • a newly created Secretary of State for Exiting the European Union.

If a week is a long time in politics, a few months is a lifetime.

man building a brick wallAgainst a background of political instability, one thing has remained – the pressing need for more houses. It is an imperative which no amount of Ministerial reshuffles can dilute. Indeed, our new Prime Minister recognised the importance of addressing the “housing deficit” as part of her recent – and ultimately successful – leadership campaign.

Building sufficient homes to meet a growing need is a challenge that rests not only with the private sector. Local Authorities can – and must – play their part. In some cases, they may choose to go it alone, in others by working together with private sector partners.

With that in mind, we recently held a client seminar with Local Partnerships looking at barriers to local authority housing delivery and how these can be overcome in practice.

The central themes included:

Structures and approaches

From wholly-owned Local Development Companies to Local Asset Backed Vehicles, a multitude of options exist for Local Authorities answering the call to build. A wide menu of legal powers are available, with the chef’s speciality being the general power of competence in s.1 Localism Act 2011.

Naturally, given the nature of Local Authorities as creatures of statute, there are some inherent limitations on the use of those powers. Matters of vires, additional regulatory requirements and governance must all be addressed.

Nevertheless, successful innovation and housing delivery is certainly possible. Indeed it is happening in practice, with some notable examples.

Traps for the unwary

In what is a uniquely high risk environment for local authorities, legal challenges can come from several angles. The use of statutory powers, procurement processes and state aid issues all require careful consideration. The extent to which potential challenges can be anticipated – and mitigated – will be critical to avoiding costly legal roadblocks which could derail best laid plans.

Maximising the chances of success

Not all delivery vehicles will succeed. Clear objectives are essential from inception, allied to the capacity and commitment to deliver outputs over a sustained period of time. That commitment, in particular, must be secured at both officer and member level. Scale is also important – examples to date have seen relatively modest numbers delivered.

High Court allows relaxed view of needs on appeal

high courtThe High Court has adopted a flexible approach to dealing with ‘objectively assessed needs’ (OAN) on a planning appeal in Dartford Borough Council v Secretary of State for Communities and Local Government & Anor [2016] EWHC 649 (Admin). In considering an appeal against refusal of permission for housing, the Inspector had to decide whether the authority could demonstrate a 5 year supply of deliverable housing sites against OAN.  If not, NPPF policy recommends that restrictive local housing policies are supplanted by the presumption in favour of permission.

The Core Strategy included a ‘maximum’ housing delivery figure (based on environmental constraints) and a lower figure (at which active management of under-delivery would be needed). At the lower figure, the authority could show a 5 year supply. Neither the appellant nor the authority appear to have submitted OAN evidence, despite the ability to do so (West Berkshire District Council v Secretary of State for Communities and Local Government & Anor [2016] EWHC 267 (Admin)).

The Inspector found that the scheme merited approval regardless of the OAN position. He also explained that the authority was not likely to meet full OAN judged against the maximum housing figure and so applied the NPPF presumption. The authority challenged the decision under Section 288 of the Town and Country Planning Act 1990, on the basis that his reasons were inadequate (including why the upper figure was the correct measure of OAN). The High Court dismissed the challenge, on the basis that the upper/lower level figures provided a ‘context for assessing housing need’ and that nothing in the NPPF should prevent decision makers from being able to use a range of figures to assess whether there would still “be advantage in the grant of permission“.

The judgment purposively and pragmatically allows for range-based approach to assessing OAN where there is no real demographic evidence available on appeal, and emphasises the undesirability of appeal Inspectors being diverted into a statistical “sojourn in a garden of delights” on OAN.  Care is needed, though:

  • It does not address the situation where reliance on OAN is required to ‘switch off’ restrictive housing policies and engage the NPPF presumption.
  • It also recognises that “a more thorough analysis would have been required” in those circumstances, consistent with the finding in West Berkshire that the Inspector had to “identify an annual housing requirement in the district. If he failed to do so he would not have been able to identify whether the council was able to demonstrate whether it had a five year supply of housing land.”
  • The maximum figure the Inspector used for the upper limit of the OAN ‘range’ in Dartford appears to have been derived from a historic Regional Spatial Strategy policy set by reference to policy-based environmental constraints.  It is hard to reconcile this with the need to avoid OAN assessments being artificially limited by such ‘policy on’ considerations (St Albans City and District Council v (1) Hunston Properties Limited and (2) Secretary of State for Communities and Local Government [2013] EWCA Civ 1610).

Neighbourhood watch

signNeighbourhood Planning remains a political priority and is one of the areas for which Planning Policy Guidance has recently been updated.  Following the Woodcock Holdings decision, relating to the Husterpoint and Sayers Common 2031 Neighbourhood Plan, the recommended approach to Neighbourhood Plans emerging before up to date Local Plans are in place has been clarified.

Already clear?

In Sayers Common, the Secretary of State dismissed an appeal despite his Inspector’s recommendation to allow it.  He concluded that the proposal would conflict with the Neighbourhood Plan, formally made after the Inspector’s report.  Permission was refused as the proposal would conflict with a requirement to enhance the existing settlement pattern, and was considerably in excess of the 30-40 dwellings the Neighbourhood Plan considered could be accommodated during the plan period.

However, this was quashed when Woodcock Holdings Limited successfully challenged the decision, on the basis that the Secretary of State had failed to identify the nature and extent of the conflict with the Neighbourhood Plan, had not applied the presumption in favour of sustainable development, the PPG guidance (that permission would seldom be refused for a pre-examination draft plan had not been complied with), and that the NPPF policy regarding weight to be afforded to an emerging plan had not been followed. The judgment did conclude that a neighbourhood plan could come forward ahead of a Local Plan, but the legal challenge was allowed on all grounds (see our blog on the detail).

Back to the future

The planning application has been re-determined by the Secretary of State, who again refused permission on the basis that it was not in accordance with the Local Plan or the now-made Neighbourhood Plan, to which he gave “careful consideration”.  He also gave the emerging Local Plan “very limited weight”, and reached the same conclusions regarding conflict with the policies as before.

As discussed previously in relation to the DLA Delivery Limited case, which challenged a Neighbourhood Plan prepared in accordance with an emerging local plan (rather than the existing expired core strategy), there has been debate on the treatment of Neighbourhood Plans which come forward in the absence of an up to date Local Plan.  Recent updates to the Planning Policy Guidance clarifies the Government’s position where a Neighbourhood Plan comes forward in advance of a new Local Plan. The Guidance states that:

  • Neighbourhood Plan policies “may become out of date, for example if they conflict with policies in a Local Plan that is adopted after the making of the neighbourhood plan. In such cases, the more recent plan policy takes precedence“.
  • communities may decide to update all or part of their Neighbourhood Plans where they have become out of date, which will require a fresh examination and referendum, putting a considerable burden on Neighbourhood Plan steering groups.

The best way to avoid this is to ensure that Neighbourhood Plan policies either do not interfere with meeting Objectively Assessed Needs or, more difficult where there is no proper assessment of needs on the table, that any restraint policies are consistent with maintaining a 5 year housing land supply. The PPG update does not suggest that a Neighbourhood Plan that is immediately out of date at adoption – because its policies thwart a 5 year Housing Land Supply – should be given more weight than the policy imperative to maintain housing land supply and meet OAN.

In Woodcock Holdings the relevant parts of the Neighbourhood Plan were held to be inconsistent with the NPPF in this sense and so unlikely to survive either examination or allow a finding of prematurity.  The latest Sayers Common decision does not explain how an out of date set of NP settlement policies could be given overriding importance relative to national policy requirements in that sense.

Homes for London

London is falling lamentably short of delivering the number of homes that the city needs.  The mayoral election campaign was dominated by the housing crisis – and rightly so.  The chronic under-supply is a crippling social issue and a threat to London’s economic competitiveness.  London must double its rate of house building if it is to adequately house a growing population and maintain the city’s global competitiveness.  There is no silver bullet – increasing supply requires action on multiple fronts.

Homes-for-Londoners-212x300During the campaign the new Mayor, Sadiq Khan, made it clear that he wanted to see more homes built, particularly affordable homes.  The Mayor proposed the setting up of “Homes for Londoners” to bring together the Mayor’s housing, planning, funding and land powers.  Working together, London First and Dentons today launched “Homes for Londoners – A blueprint for how the Mayor can deliver the homes London needs”.  The report sets out the first steps that we believe the Mayor should take to deliver on his manifesto promise and to deliver much-needed housing in London.

We support the creation of Homes for Londoners – a body with the simple objective of ensuring that all of London government plays an effective part in increasing housing in London to 50,000 homes a year.

We believe that the initial focus of Homes for Londoners should be to bring public land forward for development.  The main pipeline of land under the Mayor’s control is owned by Transport for London (TfL).  Homes for Londoners should help to advise the Mayor in establishing a strategy to identify and release TfL sites for development from the perspective of maximising housing supply.  As part of the wider agenda of securing an effective pipeline of public land, Homes for Londoners should support the work of the London Land Commission by putting in place a strategy to ensure the disposal of land on the brownfield register.  A key focus should be on assembling sites around core public land-holdings by acquiring adjacent privately owned land.  Those sites should be released to the market with clearly prescribed density, quantum and mix (including affordable housing) requirements.

The recommendations in the report are predicated on the GLA evolving from being an organisation that sets policies and distributes funds, into an organisation that pushes, and where necessary, directly intervenes to support the delivery of more homes.  As part of this, we suggest a bolder approach to the use of compulsory acquisition powers is needed.  This should be supported by a loan fund for acquisition and compensation costs to de-risk the process for boroughs and other public bodies.

Delivering the steps set out in the report will need energy, conviction and muscle on the part of the Mayor.  This can be done.  It should be done and we ask the Mayor to step up and ensure that it is done.

Affordable snakes and ladders on small sites

The judgment in the battle of wills over the Government’s small sites affordable housing and Vacant Building Credit policies has concluded, for now, with the Government victorious in the Court of Appeal. This blog considers the practical impact of the Vacant Building Credit.  What are the wider implications of the judgment for affordable housing decisions and policies?

Policy on the hoof

cartoonThe process by which the policies were introduced was surprising, but not unlawful.  However, two elements of the judgment may prove controversial:

  • firstly, the acceptance of a retrospective Equalities Impact Assessment where complying with the Public Sector Equalities Duty when taking the decision where the assessment was ‘adequate and in good faith’ and original decision “would not have led to a different conclusion“;
  • secondly, that Ministers are not required to have regard to material considerations when making national planning policy given that it relies on the exercise of crown prerogative powers. This will seem obscure to those living outside the legal bubble.

Common sense still allowed

Policy is just policy. The judgment confirms that:

  • government, whether central or local, may state policy ‘rules’ absolutely, but
  • decision takers must consider them without treating them as absolute – their discretion to weigh things in the balance and do something different cannot be fettered by policy.

For applications, that means:

  • complying with the duties to consider all relevant issues and determine in accordance with the development plan unless there are reasons not to (Section 70(2) of the Town and Country Planning Act 1990 and Section 38(6) of the Planning & Compulsory Purchase Act 2004);
  • local authorities are entitled to weigh the Government’s policy against their own plan policies, the demographic evidence on which they are based and any economic evidence on the viability of specific ‘small sites’.  There will inevitably be an upsurge in appeals as they do so, since applicants will generally expect the Government to follow its own policy on appeal;
  • where there are perfectly sound reasons for a Localist decision, there should be little scope for adverse costs awards.  The difference in weight to the national policy is simply a matter of planning judgment – which the Court of Appeal decision emphasises must be carried out diligently.

Making plans

Local Plan policies could still be promoted on the basis of evidence base and local circumstances which justify the LPA’s proposed thresholds. That will run the gauntlet at Examination in Public given the wider powers to intervene in the Plan-making process now available under the Housing and Planning Act 2016.

The reasoning given for the small sites policy in Government’s evidence (extracted at paragraph 53 of the judgment) provides clear scope for authorities to use evidence to show that their affordable housing policy thresholds are in line with the intended policy objective as long as requirements are:

  • viable, and
  • that contributions will be required at a time when they could not sensibly stall schemes (i.e. pre-occupation).

If local policies are supported by evidence that shows they would deliver Government’s stated intended outcome then they should survive Examination.

Planning for the future – the new Housing and Planning Act 2016

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Following a lengthy period of debate, the Housing and Planning Act 2016 (HPA 2016) has received Royal Assent and was recently published. We consider the main planning aspects of the new legislation and the implications for local authorities.

The starter homes duties are a challenge for the development and government sectors as a whole. The government is considering the responses to its technical consultation on the starter homes regulations and the development industry needs much more certainty about the product and the process, in particular how open market value and viability exceptions will work. The new product will be accompanied by changes to the National Planning Policy Framework policy on affordable housing so that it will essentially replace existing provision. As well as providing commercial opportunities, this new form of tenure brings its own uncertainties.

See the full article here: Planning for the future the new Housing and Planning Act 2016 – this article was first published on Lexis®PSL Planning on 9 June 2016. Click for a free trial of Lexis®PSL