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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.

Putting the Neighbourhood Plan cart before the Local Plan horse

newickThe Court of Appeal has granted permission for the first Neighbourhood Plan case to be heard by it on appeal. The appeal is brought by DLA Delivery Limited, who applied for planning permission for 63 houses on the edge of the village of Newick, East Sussex.  DLA promoted its site as part of both the Local Plan, and the Neighbourhood Plan process, which have been running concurrently.  Although DLA’s land was identified as a suitable reserve housing site in the emerging Local Plan, the Neighbourhood Plan did not allocate it.

Accordance with what?

While the Local Plan is still emerging, the Neighbourhood Plan has been progressed. DLA sought permission to judicially review the local planning authority’s decision to hold a referendum on the draft Neighbourhood Plan (which has subsequently been formally made, becoming part of the local development plan).  In addition to environmental grounds, DLA claimed that the Neighbourhood Plan was not in conformity with the appropriate strategic policies.  The Neighbourhood Plan had been prepared in accordance with the policies of the emerging Local Plan.  However, as the Local Plan had not yet been adopted,  the plan currently in force covered the period to 2011.  DLA argued that the Neighbourhood Plan could not be in accordance with the strategic policies, and therefore meet the basic conditions to be made, as the plan it related to was not yet in force.

Court of Appeal prepared to look again

The claim was dismissed in the High Court by Foskett J, but granted permission to appeal on one of eight grounds – the need for the Neighbourhood Plan to be in ‘general’ conformity with strategic policies.  Permission to appeal on the other grounds has subsequently been granted by Lord Justice Lindblom in the Court of Appeal.

The case raises interesting points at a time where neighbourhood planning is a political priority, with measures to speed the process included in the Housing and Planning Bill.  Meanwhile, Local Plans with their need for a vast evidence base, may lag behind.  It remains to be seen how the following issues, addressed in the High Court in Woodcock Holdings, will be dealt with by the Court of Appeal.

  • Where Local and Neighbourhood Plans come forward at the same time, should the Neighbourhood Plan look back to the existing plan, or forward to the emerging plan?
  • How can a Neighbourhood Plan, in general conformity with an out of date Local Plan, meet the needs of the community going forward?
  • Should a Local Plan be able to override a Neighbourhood Plan once it has measured its objectively assessed need, if more homes are needed?

Independence day?

A further point of interest raised by the appeal is the appointment of Neighbourhood Plan Examiners. While Local Plans are examined by inspectors appointed by the Planning Inspectorate, Neighbourhood Plan examiners are appointed by the relevant Neighbourhood Plan steering group.  Whilst the claimant emphasised that they made no criticism of the examiner personally, they did suggest that the appointment of the examiner by the parish council gave rise to an appearance of bias.  It will be interesting to see what the Court of Appeal make of this “apparent bias” in the appointment of examiners – should it be another job for the Planning Inspectorate?

Will LPA shaming and intervention work to incentivise plan making?

In this blog, part of our series on the Government’s technical consultation on implementation of the planning changes (the Consultation), we discuss how the Government is proposing to deliver on its commitment to get local plans in place by 2017.

As outlined in our earlier blog, clauses 129 – 133 of the Housing and Planning Bill are intended to incentivise and control the plan-making process, with the ultimate sanction being the intervention of the Secretary of State – the Secretary of State will be able to reject, write or correct local plans.

Good plan making picChapter 6 of the Consultation sets out the Government’s proposed criteria for deciding when to intervene in the plan making process. It suggests that the priority or target authorities for intervention are those where:

  1. the least progress in plan-making has been made;
  2. policies in plans have not been kept up-to-date;
  3. there is a higher housing pressure;
  4. intervention will have the greatest impact in accelerating local plan production.

There is nothing surprising or controversial about this criteria, but how the Government will determine where “intervention will have the greatest impact in accelerating local plan production” is not explained.

One study suggests that 21 local planning authorities are most ‘at risk’ of intervention (as of April this year) in light of the Consultation criteria above.

The Consultation also states that the Government plans to publish a range of monitoring information on local plan progress, every 6 months, for all local authorities in England:

  1. the date that their local plan was adopted or last reviewed (for areas without an adopted local plan it would be the date of their last plan prior to the 2004 Act);
  2. for the publication and submission stages of the plan-making process, the date these stages have been achieved;
  3. for each stage in the plan-making process (publication, submission, adoption) that has not yet been achieved:
    1. the local authority’s forecast date for achieving that stage (likely to be April 2016);
    2. for subsequent publications of the information in (a), the most recent forecast dates. Even if the forecast date remains the same as the original forecast (original baseline date) this date will be published. The intent of this is to show that the local authority is meeting their timetable;
    3. any slippage or acceleration between the original baseline date and the most recent forecast dates.

The intent of this publication is clearly to name and shame local authorities into action. Will it work?  Is the threat of intervention going to be enough to stimulate the plan-making progress, particularly for those authorities that are already severely under resourced?

What about financial incentives for local authorities, be they positive or negative?  Surely this is the critical gap in the Government’s thinking.  The Local Plans Expert Group (LPEG) seems to agree and has recommended in their March report that the Government ought to review the role of financial incentives to stimulate efficient and effective plan making and that authorities should be warned that they will be given less priority when bidding for infrastructure related funding (even if through a LEP) if they do not have in place an up to date local plan which identifies the need for that infrastructure.

While most would prefer to see positive, rather than negative incentives for local authorities, if the Government is serious about incentivising the plan-making process the surest way of achieving this, without intervention, would be for local authorities to have some “skin in the game”.

Note: the Consultation closed on 15 April.

Mind the gap – if Starter Homes survive, there will be blood

cake

The Starter Homes initiative now faces an uphill struggle onto the statute books following setbacks in the House of Lords. Critics should be careful not to write them off, though, because the Government is adopting a twin track approach that is likely to deliver changes this year either way which will disrupt and reshape planning debates.

Even if the radical Starter Homes Duty is unravelled successfully by the House of Lords, it seems very likely that the Government will modify the NPPF  to make Starter Homes a qualifying affordable housing tenure and, potentially, attempt to give it the primacy that the Housing and Planning Bill 2015/16 was aimed at until the Lords rebelled.

Either way, the changes will undoubtedly have a radical effect on Local Plan and application processes:

  • Local Plan snakes and ladders. Again.  More complication, more fuss and evidence base changes. Government is likely to change guidance on Housing Needs assessment, to identify first time buyers as in housing need. This will overturn the apple cart on existing SHMAs and Local Plans, which will immediately become out of date.
  • Starter Homes will be exempt from CIL. There is no detail in the Technical Consultation on how or when this will come into effect or how the clawback will work where homes are sold in breach of the protected period restrictions. Care is needed in swapping tenures ahead of the changes coming into effect.
  • Transitional measures. The current Starter Homes Technical Consultation is not clear how any Starter Homes requirement would be phased in.  The industry must have some headroom so that the changes do not delay schemes submitted before a sensible transitional date.
  • There will be winners – the new price caps should deliver better returns where there is a straight swap for Shared Ownership.  Authorities will seek an increase in overall affordable provision.  The changes may end up bolstering the case for a fixed percentage of affordable housing in London.  At Lower Graylingwell, the 30% affordable provision has increased to 50% Starter Homes, for example. Developers will need to plan for the demise of ‘golden brick’ payments by Registered Providers, though, and assess the cashflow implications of another 20% of product as sale tenure. Marginal sites, including previously developed green belt will be sold heavily on the back of Starter Home delivery and should expect kinder words on appeal as a result.
  • The allowance for commuted sums in ‘high value areas’ will perpetuate the existing difficulty of policies that surrender to landowner expectations and muddy the waters for developers bidding for land.
  • There will be blood. The changes will bypass conventional housing need. Reluctant and resistant authorities with backlogs of vulnerable and excluded people on the housing register who cannot access a £450k home will point to the fundamental jurisdiction in the Town and Country Planning Act 1990 to take local, democratic decisions in the interest of good planning.

They may weigh the breach of the Starter Homes duty against the duty to meet needs. The extent to which the Regulations can oust that, or any breach creates a ground for legal challenge, will come to the fore. Great care will also be needed on reporting the effects of the affordability sacrifice.

Non-starter? New homes proposals are going to shake things up, if they survive

The Government’s Starter Homes proposals have been around for a while – consultation in 2014 led to new policies in March 2015, backing the commitment to deliver 200,000 by 2020, freeing Starter Homes ‘exceptions sites’ from affordable housing requirements and encouraging authorities to search for sites. The Housing and Planning Bill 2015-16 measures intended to realise that commitment will go well beyond the existing policy, if they survive the House of Lords Report stage.

Big picture

cakeStarter Homes will be new homes [1] for purchase only (and only by first time buyers under 40) to be sold at the lesser of 80% of market value or £450,000 in London (and £250,000 elsewhere).

  • Authorities will be under a statutory ‘general duty’ to promote Starter Homes when considering planning applications
  • A power for the Government to specify the proportion of Starter Homes on specific types of sites, nationally
  • A power for the Secretary of State to issue ‘compliance directions’ requiring Local Plan policies to be disregarded. This is a hitherto unknown command power by central Government and is possible casualty of the House of Lords’ scrutiny.

The Government has already made clear that tenure changes should be accepted without changes to the overall amounts of provision in S106 renegotiations.  The HCA is already putting this into practice, tenure swapping a policy compliant affordable split to Starter Homes on its Lower Graylingwell scheme in West Sussex.

All is (nearly) revealed

The NPPF Review has not been clear about the extent to which Starter Homes will actually be treated as affordable housing (albeit that they will be exempt from providing it).  We understand that the significance of the Starter Homes Technical Consultation on the Regulations which will shape the regime is that:

  • There will be a fixed 20% requirement for most schemes of 10 units or above.  Viability testing will be permitted, but the threshold for exceptions is likely to be a higher bar than hitherto accepted in viability appeals.
  • Starter Homes will be affordable housing in policy terms. In re-opening the NPPF consultation on changes to the definition of affordable housing, the Government is signalling its intention to modify the NPPF to allow Starter Homes to qualify. We understand that they are meant to be a ‘top slice’ of viability, which is intended to ensure that Starter Homes always float to the top of the affordable tenure pile in appraisals.
  • The 8 year ‘restricted period’ during which first time buyers will have restricted selling rights will allow the percentage of market value to taper up (like staircasing Shared Ownership equity).  This responds to concerns by lenders about the effect of sudden pulses of de-restricted units hitting the market at the same time.  These periods are controversial and likely to be significantly amended following the cross-party rebellion in the House of Lords.
  • Units will not be able to be let. The attractiveness of this, alongside a period where the market for re-sales is narrowed to first time buyers under 40 remains to be seen.
  • PRS is likely to benefit from a blanket exemption but will be expected to yield a commuted sum. The Government is likely to require such sums to be calculated based on the gain in value to the developer (and to require authorities to deliver Starter Homes with it). How it will factor in the costs of assembling land to do so is moot.
  • Standard S106 wording is being prepared.

Rebel Alliance

The defeats suffered by the Government at the Third Reading stage in the House of Lords on 11 April 2016 now cast a shadow over how radical this new tenure is likely to be. Amendments backed by a cross-party alliance of peers would:

  • Extend the protected period to 20 years and force starter homes owners to repay any discount (tapering by 1/20 each year) where selling earlier
  • Return control to local authorities on how many starter homes should be delivered locally, and was backed by a majority of 86 peers.

Both amendments were back by majorities of at least 85 peers and the likelihood of the radical changes envisaged by the flagship policy announcements last year coming into effect in 2016 look limited.

[1] including those constructed but not yet occupied

Statutory consultee responses: must try harder?

In this blog, part of our series on the Government’s technical consultation on implementation of the planning changes, we discuss proposals to limit response times for statutory consultees.

Prior to making decisions on planning applications, authorities must consult the relevant statutory consultees for their opinions. Statutory consultees are under a duty to respond within 21 days, however, recent performance data indicates that in 5-12% of cases statutory consultees requested and received additional time.

scoreTo encourage authorities to reach timely decisions on applications, and minimise potential delays caused by the slow response of statutory consultees, the consultation suggests limiting requests for extensions of time to a maximum of 14 days.

The consultation asks for views on the potential benefits and risks of such a limit, and whether 14 days would be an appropriate maximum (the proposed limit is based on recent performance data which indicates most extension requests are for 7-14 days).

Limiting response times for statutory consultees is part of a wider range of measures being consulted on by the Government to encourage more ‘innovation’ and ‘radical improvement’ in planning services. Whether the changes will achieve these aims in practice remains to be seen. Shortening the timescale for statutory consultee responses will do nothing to assist applications delayed by negotiations over infrastructure provision or affordable housing. It is also unclear how forcing statutory consultees to respond faster will ensure authorities also speed up their own decision-making process.

Planning application fees: falling short of the target?

In the latest of our series of blogs examining the Government’s technical consultation on implementation of the planning changes, we consider the proposed changes to planning application fees.

Currently, planning application fees are set nationally, and were last revised in 2012. The Government is now considering increasing fees, but only for local authorities who are providing an ‘effective service’. Changes to the fee regulations are anticipated to come in in Autumn 2016, after the enactment of the Housing and Planning Bill, which includes provisions to make it easier for different fee scales to be applied in different areas.

targetThe technical consultation proposes that fee increases would be:

  • increased by a ‘proportionate’ amount, linked to both inflation and performance;
  • reviewed regularly, with adjustments on an annual basis, if required, to keep pace with inflation;
  • limited to the best performing authorities. Authorities designated as under-performing would be excluded (or eligibility for increases would be limited to authorities in the top 75% of performance for both speed and quality of decisions).

The consultation asks for opinions on whether:

  • changes should be implemented quickly (meaning under-performing authorities would be excluded from the Autumn 2016 increase) or whether there should be a grace period to encourage improvement; and
  • fast track services should be provided in return for a proportionate fee, and whether the requirements for any fast track services should be set out in legislation or more informally through local performance agreements.

The Government has decided, for now, not to allow fees to be set locally. Its concern is that while authorities remain solely responsible for the planning service in their area, there is too high a risk of unintended consequences – such as fees being increased to a level which dissuades applications from coming forward. Nonetheless, the door is open to these changes – the Consultation notes the desire for ‘radical service improvement’ and potential introduction of competition in the processing of applications.  Where outsourcing goes beyond the initial pilots, providers (including local authorities) would need significantly more flexibility to set their own fees and service standards.

Whilst all local authorities would no doubt be happy to accept higher fees, many will feel unfairly penalised if the increases are linked to performance at a time when budgets continue to be cut. Allowing authorities to determine fee levels in return for the introduction of competition into the application processing market may also not prove as welcome as the Government hopes. Local authorities may consider the proposals to be a double-edged sword, with the benefits of setting their own fees being outweighed by the risks of being undercut by the private sector, as well as the loss of overall control of the planning process.

Neighbourhood planning: full steam ahead?

The Housing and Planning Bill seeks to further the Government’s localism agenda, by speeding up the neighbourhood planning process.  The Bill includes provisions to automatically designate neighbourhood areas where Local Planning Authorities (LPAs) do not make a decision in time, and will impose a timetable on the consideration of neighbourhood plans.

The Government is now undertaking a consultation on the contents of regulations to be made under the Bill once it becomes law.  The consultations suggests a range of measures which will further increase the pressure on LPAs to progress neighbourhood plan applications.

Neighbourhood-planNoting that 90% of applications are from Parish Councils, and 90% of those applications are for the whole parish, the consultation suggests removing the ability of local planning authorities to amend the area applied for in these circumstances, unless part of the area was designated for another plan. Rather than having eight weeks to consider this type of application, the LPA would have to approve it as soon as possible.

The consultation suggests a limit of 13 weeks for LPAs to consider applications for neighbourhood forums, where applications are to a single LPA, or 20 weeks where two must be involved, and an exception where part of the area has already been designated.

The consultation also asks whether an LPA should be given five weeks from receiving an examiner’s report to decide whether to call a referendum, unless they disagree with the examiner, or agree more time is needed with the neighbourhood group. The consultation suggests a procedure to notify interested parties where they disagree with the examiner.

The consultation suggests that referenda should be held within ten weeks of the decision to call a referendum, or 14 weeks in a designated business area. It also suggests that following a referendum, the LPA should be required to bring the plan into force within eight weeks.

The process by which the Secretary of State may intervene when requested by the neighbourhood planning group is also suggested.

The consultation also proposes that designated neighbourhood forums be added to the list of bodies consulted by LPAs when they are preparing local plans. Alongside the provision in the Bill which allows neighbourhood forums to request that they be notified when planning applications are made, this increases the sway neighbourhood forums will have as part of the wider planning process.

These measures all emphasise the importance to the Government of neighbourhood plans, and increase the pressure on LPAs to progress applications. While there is clear political intent to involve people in planning decisions at a local level, this comes at a time when LPAs may be struggling with the volume of planning applications and have limited capacity available for the work associated with neighbourhood planning.

It remains to be seen whether these measures will boost the number of neighbourhood plans being made, or whether they will increase pressure on (already) stretched LPAs without significant results.

Transparency of financial benefits in planning

The Housing and Planning Bill (Clause 140) proposes to make public, through committee reports, the financial benefits of certain development proposals – as we have commented on before.  The report will need to list the benefits whether it is material to the LPA decision or not, and note the LPA’s position on the benefit, these include local finance considerations (as defined by the TCPA 1990 section 70 (inserted by the Localism Act 2011)).  CIL payments are included within this description whoever may be the beneficiary, i.e. the LPA as collecting authority for its own levy, or for the Mayor of London.

Piles-of-pounds1The Government’s technical consultation on implementation of the planning changes (issued on 18 February 2016, and invites representations by 15 April 2016) sets out that council tax and business rate revenue could also be included within the description ‘other financial benefits’, to be prescribed through regulations.  This will require the LPA to liaise with those relevant departments of its Council to ascertain estimates of the likely tax/ rates that will be generated by a development, and whether that is a material consideration to the decision to be made on the application.  This could prove difficult where the scheme is in outline and the full details of a development are not yet known, in particular where flexible uses are proposed.  New Homes Bonus benefits will also be required to be reported, again further liaison will be required to obtain the appropriate information, the level of funding and determine whether that funding is material.

Most committee reports already include a section on the benefits of a scheme, this would usually include an estimate of any levy charge payable (whether mayoral or its own), as well as section 106 agreement benefits – where a recommendation to grant permission will be subject to the planning agreement being entered into on the basis of the recommendation/ resolution of the committee.  The Planning Practice Guidance already encourages authorities to report financial benefits such as New Homes Bonus and CIL, regardless of whether there is no legal basis for treating them as material to planning decisions. Care is needed to do so without creating a ground for legal challenge that would otherwise have not existed.

The solar industry for example has, for a long time, offered community benefits, either in the form of works in kind (i.e. providing panels on a public building) or financial payments (usually for the benefit of projects promoted either in relation to reduction of energy consumption, or more commonly any projects promoted for the benefit of the community).  These offers are usually made to parish/ town councils.  However, there are a number of instances where payments have been offered, and made, to local schools or other unelected community groups.  The proposals in the technical consultation are likely to require these types of benefits to be included in committee reports and judged on whether they are material.  These arrangements are usually finalised outside of the planning system, by private deed.  This transparency could have opposing impacts – with the relationship between contributions and proposals being tested for materiality, opening routes for criticism and challenge.

A better alternative?

buttThe latest of our series focussing on the Housing and Planning Bill considers the controversial Government amendment to “test the benefits” of introducing competition to the processing of planning applications. Amidst the furore surrounding many of the Bill’s provisions, such as those on affordable housing and permission in principle, this one caught many by surprise.

What is proposed?

Applicants in designated areas will be able to choose whether to have their planning application processed by a “designated person” rather than by a specified local planning authority.

As with many aspects of the Bill, Regulations and Development Orders will contain the all-important detail about how this will work in practice. There are a multitude of  issues of principle though.

What does it mean for planning?

Denounced in the Lords as being tantamount to the privatisation of planning, this has the potential to change the face of development control as we know it, if adopted across the board.

However, before the death knell sounds in council planning departments across the country, some key points to bear in mind:

  • the clause makes it clear that determination of the application will remain the responsibility of the specified local planning authority;
  • it is a pilot to test the waters – it will run in specified areas for a specified time period;
  • it will be optional – applicants can choose whom they want to process their application;
  • it will apply only to developments of a “specified description” – we await clarity as to what that means.

While much of the focus (and concern) centres on private sector processing, the government has made clear its intention is to foster innovation amongst councils through competition. Indeed, there will be opportunities for those able to seize them.

Some food for thought

  • Process vs determination – an artificial distinction? To what extent can they be separated, given that qualitative judgments are often required throughout the life of a planning application? Is it really possible to hive off elements which are genuinely process-driven and isolate them from the inherent politicism of planning?
  • A viable alternative? There continues to be much nervousness around the public disclosure of viability information in planning applications. Might private sector processors be favoured on the basis that they may not be subject to the requirements of the FOIA and EIR regimes?
  • It may shift the traditional focus within local authorities away from development control and towards strategic plan-making. Not necessarily a bad thing, particularly with other measures in the Bill designed to incentivise plan-making.
  • Has the government side-stepped the issue of resourcing planning departments? It is committed to encouraging innovation and driving down costs, so will this address long-standing resourcing issues? It also has to be seen alongside the recent Ministerial announcement that the Government will consult on allowing “well-performing planning departments” to increase their fees in line with inflation.