The approach to land value and the application of planning policy were brought into sharp focus by an Inspector’s decision to dismiss the developer’s appeal against refusal of permission on the grounds that the ‘maximum reasonable level’ of affordable housing had not been secured. The developer had proposed residential redevelopment of a surplus military site where it was the successful bidder. Holgate, J’s judgment – dismissing the challenge to that decision under Section 288 of the Town and Country Planning Act 1990 – in Parkhurst Road Ltd v Secretary of State for Communities And Local Government & Anor  EWHC 991 (Admin) confirms the importance of understanding how land value should reflect planning policy requirements.
The developer relied on nearby sales data to justify its land cost as at the market value for the site, limiting its affordable provision at ten percent. The Inspector accepted the authority’s approach, starting with the site’s low established use value (EUV) and applying a substantial premium (EUV Plus), to reach an overall benchmark value at which 34% provision was feasible.
In the previous (2015) appeal, an Inspector’s finding that the developer’s benchmark land value was broadly reasonable in light of ‘market signals’ (competing bids and comparables) resulted in a threat of legal challenge by the authority and a letter from the Government acknowledging that the Planning Practice Guidance “unambiguous policy position” is “in all cases land or site value should reflect policy requirements and planning obligations…”.
The developer ran its new appeal case on the basis that using EUV Plus was inappropriate where the EUV was negligible. The Inspector rejected its evidence on market values, on the basis of the weakness of the comparables used (being unadjusted for variations in policy compliance and EUV). He refused to accept “a market valuation which does not, in my view, adequately demonstrate proper consideration of, or give adequate effect to, the guidance in PPG or the requirements of the development plan“. In line with the authority’s case, he adopted EUV Plus as a starting point, then having regard to the market as a relevant, not determining factor. The decision letter included a statement that the authority was promoting an EUV Plus method of valuation.
The developer challenged the decision under Section 288 on various grounds, including that the Inspector’s misunderstanding of the authority’s was partly responsible for rejecting the developer’s position that a purely market value approach was “the only reasonable means by which to establish the land value” given the low EUV. It also claimed that the Inspector’s decision was vitiated by accepting a (flawed) technical ‘fix’ for comparing land values relied on by the authority’s expert.
Holgate, J dismissed these two grounds: firstly, the Inspector had understood the authority’s approach correctly (establishing a site value and then re-expressing it as EUV plus a premium to cross-check the reasonableness of the site value indicated by comparables); secondly, the Inspector had erred on the technical fix but his “wholesale and robust rejection” of the appellant’s valuation case and interpretation of development plan policy did not rely on – “had nothing to do with” – that point.
The judgment clearly explains the meaning of the PPG and the upholds the way the Inspector applied it. There is no wider or new principle, but it is nonetheless helpfully clear that in the current PPG regime:
(1) the PPG addresses the problem of ‘circularity’ – where residual land valuation using land price is based on downgrading policy expectations erode policy – by requiring site value to respect policy expectation, competitive return to willing owners and evidenced market value at the same time;
(2) comparable evidence is one helpful way to calibrate reasonable land value expectation, but may often require adjustment to be fit for purpose (including, for example, to deal with high existing or alternative use values and policy non-compliance). The more adjustment needed – and the harder to do – the less the weight that may be applied (40);
(3) reasonable behaviour matters – proper due diligence and analysis of actual demand are key elements of the reasonable owner (citing Trocette Property Co Ltd v Greater London Council (1974) 28 P & CR and Inland Revenue Commissioners v Gray  STC 360);
(4) policy requirements (depending on how they are expressed) may put the onus of proof on the applicant. An Inspector may reject that party’s case as lacking sufficient cogency to satisfy the policy (paragraph 54, applying Vicarage Gate Limited v First Secretary of State  EWHC 768 (Admin));
(5) planning by numbers is tempting but dangerous – “the NPPG recognises that it may not be proper” to “compromise policy requirements” even where there is a viability constraint;
(6) authorities need to be careful too: using EUV Plus as a rule rather than part of an analysis “disregards levels of market value arrived at quite properly in arm’s length transactions and consistent with the correct application of planning policies and sound valuation principles” (146). “Local policy statements” may cross the line in this way “especially where the document has not been subjected to independent statutory examination prior to adoption“. This is rife in practice, with Supplementary Guidance masquerading as development plan policy;
(7) planning appeal decisions should be taken with a pinch of salt – they are fact specific, cannot establish or change policy, consume “a disproportionate amount of time and may distract parties” from actually getting their own evidence right.
Both the appeal decision and the judgment underline the need to avoid land value expectation becoming self-referential. The decision is a reminder of the need to critically examine evidence of comparable values to weed out those which failed to comply with policy in the first place (i.e. are not truly comparable) and of the risks when bidding for land with low existing value of being too led by future scheme, rather than underlying use, value.
The judgment also underlines the critical importance of properly testing the effect of policies at examination in public if they are to be legitimately treated as the irreducible starting point. Practitioners should take heed on both fronts and hope that the Government does not sweep away too much of the current Guidance, on which there is now judicial clarity.
(This article was originally published in Estates Gazette on 14 May 2018)
The recent Parkhurst Road appeal decision emphasises the importance of understanding how land value expectation (and so the price for land) should reflect planning policy requirements.
The appeal decision dismissed the 96-home proposals for the disused Territorial Army centre on Parkhurst Road, Holloway on the grounds that it would not provide the “maximum reasonable” level of affordable housing, as required by the council’s core strategy. The appellants offered ten per cent affordable provision, reflecting a purchase price of £13.25 million (which, in light of nearby sales data, was said to be the market value for the site). The Inspector accepted the authority’s approach, starting with the site’s established use value (EUV) and applying a significant premium, to reach an overall benchmark nearly half that put forward (at which 34% provision was feasible).
Caution is needed on whether the decision is really a game-changer or just a reminder of home truths.
The decision is a benchmark, of existing policy, rather than a landmark in terms of a new approach. It shows a willingness to take policy and guidance at its word and treat land value as genuinely residual to policy requirements (even where they are expressed to be ‘subject to viability’). It does not junk the comparable approach, nor does it undermine the use of either a substantial premium to Existing Use Value (EUV Plus) or use of Alternative Use Value where appropriate to reflect the need for an incentive to release land. It is a reminder of the need to critically examine evidence of comparable values to weed out those which failed to comply with policy in the first place (i.e. are not truly comparable).
It also illustrates the role that the Mayor’s Housing Supplementary Planning Guidance (March 2016) will play in London in clarifying that the outcome should rarely be different whether either the EUV Plus or the RICS market value basis is used properly.
Context is everything
The backdrop to this particular decision also matters. In a previous (2015) appeal, the Inspector’s finding that the price paid was broadly reasonable in light of ‘market signals’ (competing bids and comparables) resulted in a letter from the Government responding to the threat of legal proceedings by Islington acknowledging that the PPG’s “unambiguous policy position” is “in all cases land or site value … should reflect policy requirements and planning obligations…”.
The 2017 decision adopts a more critical approach to giving effect to that, but is not really that different to other appeal decisions through the years which reflect the same fundamental point already flagged in the PPG (look back, for example, at the 2013 Holsworthy Showground decision) discounting price paid as an overbid against true market value.
Both the 2015 and 2017 decisions acknowledge the appropriateness of a viability Review. A 24 month ‘grace period’ was acceptable to avoid a pre-implementation Review but seeking a 22% margin at the Review stage when the effective profit on the 10% AFH offered at appeal was 18% was – sensibly – rejected on the basis that the development risk is already rewarded by the preserved return of 18%.
It is also significant that a requirement not to leave the homes empty for more than 3 months (under its adopted Preventing Wasted Housing Supply SPD, July 2015) was rejected on the basis of doubts about both the justification for, and the enforceability of, the obligation. The latter point should be scrutinised as a proper consideration in judging the reasonableness of the obligation – not least because it would suggest that the kind of obligations required by the St Ives Neighbourhood Plan could never be given effect.
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
The 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.
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.
A spate of major floods across the UK, warnings that global warming will lead to more frequent heavy rainfall events and increased risks of flooding have put the topic back at the top of the pile for planners. Recent appeal decisions have highlighted the conflict between planning policy preventing development in high risk areas and the need to build more housing, as well as the importance of mitigation strategies and conditions in securing consent.
This article was first published in Property Law Journal (May 2016) and is also available at http://www.lawjournals.co.uk/
We have commented on the initial impact of the changes to the Section 106 regime made by the Growth and Infrastructure Act 2013 to allow developers to challenge affordable housing obligations on viability grounds. The new Section 106BA gave developers a right to ask councils to review housing obligations. Section 106BC gave a right to appeal against review outcomes. Both came into force on 25 April 2013, subject to a ‘sunset clause’ killing off the changes after 30 April 2016 unless otherwise extended. They will now die on 30 April but uncertainties remain about the transitional picture.
The Spending Review and Autumn Statement 2015 committed to extending the sunset clause. The anticipated Order has not materialised and we understand that the Government has now decided not to do so. This may simply be a reflection of the fact that we are no longer in recession and stalled schemes should be seen as bad planning rather than bad luck. It may also reflect the odd outcomes that have crept into the process.
The appeal route has been widely used for schemes granted consent in the current market, on the basis of a policy compliant affordable offer or viability assumptions that have then been changed on appeal. The ability to use the appeal route for schemes that are complete has also begun to be tested. The recent Chatham Quays case concerned a large multi-phase mixed use scheme approved in 2007 and subject to S106 variations to push back affordable housing contributions to better times. The housing element of the scheme came forward and the commercial phase remained, as accepted by the Council, ‘largely complete’ but not fully complete. The developer successfully stripped out the remaining payments on appeal and the Inspector’s approach was upheld in the High Court.
The judgment confirms that:
- developments which are largely complete can take advantage of the S106BA/BC process to eliminate affordable housing requirements even though the time for delivery or payment has long passed and there is no real relationship between the obligation and whether the scheme would be completed;
- completion should be judged by looking at the whole of a mixed use scheme, not just the housing part. The Inspector failed to consider the Council’s argument that only the housing part should be considered in a mixed use scheme, not the whole. The Judge simply held that the argument was so poor that he could never have properly accepted it if he had considered it though. It should also be considered on the basis of whether the development is in a state which could generate receipts or return, from the point of view of the developer. Wider claims about its significance should be taken with a pinch of salt;
- the correct route of challenge to an Inspector’s S106BC decision is by Judicial Review, not S288 statutory challenge. This point is less novel than assumed in the judgment – it arose in 2014 in the failed Mast Pond Wharf challenge.
The judgment leaves open the question of whether a viability appeal can be entertained after a scheme has been fully completed. Common sense would suggest not, but the judgment notes that the Act is silent on the point.
Eye of the Needle for New Challenges
We understand that the Government will allow S106BC appeals made before the sun sets on 30 April to proceed. It is hard to see how there would be any jurisdiction to deal with ongoing applications or appeals without express transitional provisions in an order (which the Act allows for). They are needed either way, not least to be clear about the effect of the sunset clause on modified obligations where the development as a whole has not yet been fully completed, to avoid successes like Chatham becoming pyrrhic.
It will be interesting to see whether the Government’s viability test for Starter Homes, trailing in the consultation, sets a more rigorous test than that which local authorities have faced under the Sunshine Regime.
Authorities are increasingly using planning conditions as a work around, which are outside the S106BA regime. It would be nice if this willingness to slim down bloated planning agreements survived the sunset.
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.
The 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.
Part 1 of our CIL Review blog highlighted the Government’s appetite for retaining and reinforcing the Community Infrastructure Levy. Our suggested reforms for this year are:
- Simplify regulation: The CIL Regulations are the product of a set of amendment instruments for each year since 2010, plus the changes made by the Localism Act. These reforms – delivering phased charging, abatement, flexibility on offsets for existing floorspace and other improvements – have been welcome. The resulting system is now mired in horrible complexity though. The Review should explore how much regulation could be simplified or simply discarded.
- Simplify phasing: The introduction of phased charging in 2014 is a great tool for managing CIL liability. The process for defining and amending CIL phases should be significantly easier for investors though. Breaking the link between planning phase and CIL phases is necessary to end what has become a time consuming exercise. Likewise, the effect of S96A changes on phasing should be made absolutely clear to avoid CIL-bearing schemes being forced to use time consuming planning processes to achieve changes that are material to CIL but immaterial to planning.
- Delivery: Uncertainty over the way that CIL expenditure will be focussed on planned growth is unhelpful. The Review will have to consider the balance between the discretionary use of CIL, against the need to avoid it being drained away from investment in new infrastructure to support Local Plans. A slightly more prescriptive framework for some of the really big ticket items used to justify CIL setting would be sensible.
- CIL Agreements: CIL breaks down for the largest schemes and is a drain on the system and general source of bafflement. The Review will need to grapple with how much flexibility can be created for genuinely ‘Strategic Sites’. It is possible to contractualise CIL payments for major schemes so that much of the current regulatory fog is cleared, as long as:
- it is compatible with value capture, so that the overarching CIL burden itself cannot be reduced by the use of agreements;
- it is compatible with procurement law, which will mean that the point at which CIL liability arises will need careful thought, the powers to enforce under Part 9 of the regulations are applied and instalments continue to apply;
- the valuation assumptions for ‘works in kind’ are less dysfunctional.
- Pooling + Double Dipping: The law is regarded as confusing but could easily be left as it is, but furnished with proper guidance about how the R123 restrictions should be used to focus debate on the whether there is a real justification for planning obligations. The R123 list and R123(2) pooling restrictions should be recognised as a diversion, and binned.
- Look afresh at Affordable Housing investment. The Localism Act changes are widely seen as having successfully removed affordable housing from the realms of CIL ‘infrastructure’. The merits of that political choice should be revisited – recycling a limited amount of CIL into innovative affordable tenures would make sense and address the viability debates that dominate housing.
- Create freedom: Allow authorities to forward fund infrastructure and repay debt from CIL. The rate at which they may do so is currently set at 0%, despite their access to preferential borrowing rates. Authorities with a Local Plan less than 3 years old should be empowered to do so, as long as the CIL repays only new infrastructure.
- Reduce choice: The Localism Act 2011 amendments to the Planning Act 2008 allowed CIL to be spent on existing, as well as new, infrastructure. That undermines the purpose and legitimacy of CIL. Take it back, or at least only allow it for authorities with a recent plan that meets needs in full without the need for future green belt reviews.
- Charge Setting: The Examination process is mercifully short and focussed. It is too rarely burdened with substantive objections. There is little that needs to change, other than the level of engagement with the process. The scope for abuse of differential rates and the application of residential charging rates to so-called ‘ancillary’ spaces should be reigned back in or made absolutely clear at the charge setting stage.
- Exemptions, distractions and diversions: There are too many developments that do not pay CIL and too much CIL is diverted away from local authorities who need it to provide the infrastructure to support development. Good development should be supported by infrastructure, and that needs funding. Let’s cut back on those who do not have to pay and let’s make sure the entirety of the money raised is available for new capital expenditure.
The Housing & Planning Bill 2015 now takes forward some of the elements of the Treasury’s 2014 Autumn Statement to speed up planning decisions. It does not pick up the commitment to introduce a dispute resolution mechanism for Section 106 negotiations to speed up housing starts trailed earlier this year (and announced in the July 2015 Productivity Plan).
The Government is still considering its options, including a combination of legislative changes and ‘soft’ measures to steer the S106 process. Our Manifesto for Planning 2015 called for a model agreement to be adopted, to limit the current reinvention of the wheel for each scheme. Once the dust has settled on the Housing & Planning Bill, there are a few further things that Government could do to nudge the process.
Dispute resolution system (DRS) challenges
The responses to the 2014 Autumn Statement reflect the challenges in applying a dispute resolution approach to planning decisions, not least:
- The risk that DRS may drain scarce resources away from the core development management process itself.
- What can/ should be binding and non-binding. Recognising that a DRS outcome cannot override committee resolutions means that the timing of DRS needs careful consideration. Going back to committee to give effect to a DRS decision is unlikely to appeal to many applicants.
- Allowing DRS to be triggered before committee consideration, including binding elements (for example, on compatibility with regulations 122 and 123 of the CIL Regulations 2010) and providing incentives to behave responsibly would help.
Dispute avoidance – better behaviours
Nudging stakeholders towards dispute avoidance would be a more effective short term approach with long-term benefits, encouraging common gaps in the planning process to be plugged:
- Far more structured Section 106 negotiations
- Reducing the number and complexity of obligations
- Up to date, detailed, site allocations with clear, detailed, mitigation requirements.
The last remains a pipe-dream in the current system and it remains to be seen whether the Housing & Planning Bill will really change much.
Government could make a big difference now, by:
- Adopting a Model Section 106 agreement along the lines of the CLG/Law Society Model 2010 Second Edition. A more coherent and effective set of mechanisms for deferred/ catch up contributions would be positive.
- Adopting Model Conditions. There are some good Call In decisions out there with sensible, short and effective conditions that can rob Section 106 agreements of most of their content.
- Recommending in the PPG that:
- The Model Conditions and Model Agreement clauses are used, unless there are clear justifications for departure (and making it clear that the reasons may be subject to DRS).
- Proper Heads of Terms or a complete Model Agreement are submitted with an application.
- Detailed delivery programmes are agreed for Section 106 negotiations, which would finally give some purpose to Planning Performance Agreements.
- Amending the Planning Guarantee provisions in the Fees Regulations so the ability to claw back the application fee is not lost where an extension of time is agreed but then exceeded. That would provide the intended incentive to get on with it in the way that the NPPF and Planning for Growth require.
The introduction of new policy on section 106 tariffs and affordable housing has generated significant interest and concern. The policy simply states that:
“A financial credit, equivalent to the existing gross floorspace of any vacant buildings brought back into any lawful use or demolished for re-development, should be deducted from the calculation of any affordable housing contributions sought from relevant development schemes.”
The statement is clearly policy, albeit the weight to attach to it is a matter of debate. Where local plans have been adopted in accordance with the NPPF, taking account of viability and vacant floor space, should the new policy override that? The additional supporting paragraphs in the NPPG are not policy, but there is a risk that they will be treated as if they are, given the poor and skeletal nature of the policy itself.
This shock and awe approach to policy making has led to mixed reactions. It is estimated that it will cost Westminster City Council alone £1bn in lost funding. Westminster, Southwark and the City of London are looking for ways to reshape their policies to cope. Reading and other boroughs have brought a legal challenge. The Westminster Property Association has said it rejects the windfalls the changes would bring. There have to be question marks about how long it will last. However, for as long as the policy survives in its current form, the opportunities are offset by some uncertainties.
Although there is an argument that the policy only applies to financial contributions it is likely that the offset applies to both financial contributions and on-site provision. The policy therefore opens up the scope for greater profits. It also creates a perverse incentive for further running down the stock of commercial floorspace and replacing it with residential uses in some areas.
The policy is not binding on local planning authorities – who may see good planning reasons for not giving it overriding weight. The likelihood of it being given overriding weight on appeal means that many authorities will feel unable to continue their previous approach though.
The furore highlights how so much reliance has come to be placed on financial contributions and raises a question of whether local Plans that relied on affordable housing provision from vacant buildings remain sound. Unless there is alternative provision (or finance) or an increase in greenfield site allocations, it is hard to see how they can be – the local plan will not meet the objectively assessed need for affordable housing. For plans to be sound, they will need to be amended to identify how they will fund affordable provision in urban areas without developer contributions (or how significantly increased site allocations outside urban areas will enable the slack to be taken up, albeit that it will be in less sustainable locations).
The policy itself is limited to the 28 November 2014 Ministerial Statement. The guidance on how to apply the credit is sparse. Several practical difficulties are already apparent:
- How much credit? The basis of calculation is open to debate. Correspondence with CLG suggests that obligations should be reduced to the same proportion as the net increase bears to the total residential floorspace. Developers should not assume that the space will be offset on this ‘straight line’ basis – authorities such as Norwich are considering a more nuanced approach where average unit sizes are factored in, with potentially significant effects. Some authorities will apply a GEA basis, not GIA.
- Vacancy: The NPPG refers to ‘relevant’ vacant buildings providing a credit. That will mean different things to different people. Does it mean all of a building or part? Does it mean at the date of application, of permission or later? Developers will need to be careful to avoid a definition or period of vacancy that could cut across existing floorspace offsets for CIL. Will authorities seek to back-date rates claims where vacancy is relied on but was not obvious before?
- Abandonment: The credit will not apply where buildings have been abandoned. This is a high threshold, but also a strange test to choose, being an area of law ill-suited to planning permissions and requiring a mixed objective and subjective test. Unless buildings have become so dilapidated that they are effectively beyond any resumption of a previously authorised use, it will rarely apply.
Local Plan changes
There is a nudge, perhaps unintended, to review Local Plans. CLG have suggested that the measure is intended to be impact based. If authorities review the impacts and adopt policies that reflect it, the development plan should trump the credit policy. Authorities in urban areas – particularly London – are now fast tracking this kind of review. In some areas, a Neighbourhood Plan might be a quicker and easier vehicle in which to do this, given that such plans only need to be prepared ‘having regard to’ national policy. According to recent Secretary of State appeal decisions, they can be adopted inconsistently with the NPPF, become immediately out of date (or sit in draft) and still be given determinative weight on appeal.
There is also a nudge to CIL. The new policy can, and should, be reflected in CIL viability modelling for all types of sites. It may increase the charging rates significantly for strategic sites with material levels of vacant building. As local authorities look for alternative sources of funding the changes may also lead to more scrutiny of whether the Government’s changes to the CIL regime under the Localism Act 2011 did, really, kill off the ability to spend CIL on affordable housing.