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BID for success

Business Improvement Districts now number over 150.  They offer a real local voice for businesses.  Some are working towards neighbourhood plans, although hamstrung by the lack of a real voting mechanism to be able to force through proposals.  CLG have published plans to allow property owners to set up BIDs, running in parallel with a BID run by tenants.  Disappointingly this will only be possible for the moment in London since the legislative framework was pushed through as part of the Crossrail funding proposals and requires a business rate supplement to be in place.

Despite some progress in giving BIDs a real role in the planning and economic development world there is one area from which BIDs are being excluded.  Local communities will benefit from between 15% and 25% of Community Infrastructure Levy being paid to them.  There is no provision for any part of this to be paid to BIDs.  In many ways BIDs are more democratic and more accountable than the neighbourhood forums to which the community share of CIL will often be payable.  Where there is a BID why not allow them to take, say, half of the CIL money raised in the area.  That would give local businesses a real incentive to support new development and, probably, a more mature organisation through which to ensure that the infrastructure that CIL promises is actually delivered.

A Repealing Prospect

There are many parts of the planning and related processes that we could do without – we will look at something else each week that could be eliminated.

Let’s start from the ground up.  Development requires land.  The public sector is a significant land owner and there is far more that could be done to release public sector land.  A perceived constraint on the public sector is Section 123 Local Government Act 1972.  This requires local authorities to obtain best consideration for the disposal of property unless they get the approval of the Secretary of State.

The principle is sensible but why does it need to be a legislative requirement?  Even with permitted exceptions and general consents from CLG it is burdensome.  And in some cases local authorities want to use their land more imaginatively than the cash value would suggest is appropriate.  Why not abolish the section and allow local authorities the freedom to dispose on the terms that they think sensible?  In many instances they will want to maximise value (and as tax-payers we should hope that they will).  But they may decide that there are good reasons for being adventurous – and we should also encourage that where the authority is transparent about the reasons for doing so.

Appealing procedures

Just days after the August bank holiday, PINS produced a “Procedural Guide” relating to planning appeals and called-in applications.  The guidance has no statutory status, and replaces PINS 01/2009 and associated Practice Advice Notes. 

The guidance on section 106 obligations is, in particular, worth noting:

  • Final draft section 106 obligations must be sent to PINS no later than 10 working days before the start of a hearing or inquiry.  This requires developers to initiate discussions about obligations, and LPA officers to respond to drafts which are sent in the run up to the hearing or inquiry.  Both might involve a cultural change, perhaps of varying degrees;
  • Inspectors will require “necessary evidence” to assist them in determining whether a proposed section 106 obligation meets the legal tests in Regulation 122 of the CIL Regulations.  This information includes development plan policy; “quantified evidence” of the additional demands placed on infrastructure by the proposed development; details of the extent to which existing facilities are unable to meet those demands; the methodology for calculating contributions, and details of how they will be spent.  This signals that appellants and LPAs must each be more scientific about section 106 obligations.   It will be no longer good enough to offer round numbers for unspecified local amenities, unless both the need and the amount can be justified.  This kind of discipline has been largely absent, but the advice should be seen as enabling and encouraging discussion of what really matters.  (And, of course, if the parties are happy to agree to obligations which do not meet the test, they can be secured by a separate obligation which does not need to form part of the Inspector’s decision.)
  • The document also advises that all parties with an interest in the land must be a party to section 106 obligations.  This is unhelpful, because it is not strictly necessary – the Inspector needs to be satisfied that no-one would be able to implement the planning permission free of the obligations, but this is not the same as requiring every piece of land to be bound.  It would be a particularly problem, if on large regeneration projects where CPOs might be needed, a planning obligation were to be ignored simply because every landowner is not a party to it.

Localist approach?

Is there an increasingly localist approach to planning in the National Planning Practice Guidance?  The new Guidance (which as emphasised in an earlier post is just guidance) notes in paragraph 3 of the Neighbourhood Planning section that the neighbourhood plan sits alongside the Local Plan.  This contrasts with both the NPPF and the Town and Country Planning Act 1990, which state that neighbourhood plans must conform with local plans.

This is particularly interesting when considering the draft neighbourhood plan in Tattenhall, Cheshire.  To preserve the village’s character the plan proposes that any housing developments should be limited to 30 houses.  A new draft local plan for the area is currently under consultation, and it is possible that the neighbourhood plan will come into effect before the local plan is finalised.

Tattenhall’s neighbourhood plan was approved in August but was unsurprisingly challenged by three housebuilders, all of whom have applied for larger developments in the area.  A threatened injunction to prevent a ballot on the plan was dropped, but two of the developers are seeking judicial review of the plan’s approval following a record 96% majority in the local referendum.  The referendum also achieved the highest turnout of any neighbourhood plan referendum so far at 52%.  The Courts should reject any suggestion that the NPPG has changed the legal requirements but maybe the political goal posts are shifting.

Nearly Three: teething at an end?

Community Infrastructure Levy changes confirmed.  Regulations are about to be laid (coming into force by the end of January 2014) to:

  • extend the effective deadline for CIL adoption/ s106 pooling restrictions by 1 year
  • exempt ‘self builders’ from CIL
  • allow rates to be set by scale/ size of development
  • relax the requirement for buildings to be in active use before redevelopment to avoid liability (to 6 continuous months in 3 years)
  • allow detailed permissions the same phasing/cashflow flexibility as outline permissions
  • broaden the availability of discretionary relief where s106 obligations create viability constraints
  • allow CIL payments to be credited against CIL liabilities where schemes change as they are constructed
  • clarifying that Affordable Rent benefits from Social Housing Relief
  • base CIL liability on the date of permission, rather than the ‘first permits’ date
  • allow developers credit for delivering (or promising to deliver) strategic infrastructure, subject to procurement rules

Watch this space on CIL Agreements and procurement solutions.

Turn up the volume, three suggestions …

The first two parts of this post identified the clear need for new housing and the important role that the private rented sector needs to make going forward.  This part makes three broad suggestions:

Firstly, recognise the limits of Localism.  Once the right locations for growth are identified, the debate should not be around whether but how to deliver. Recent changes to the Nationally Significant Infrastructure Projects regime allow a wider range of projects to be dealt with under Development Consent Orders.  Homes were excluded.  Why? Proposals that would make a significant contribution (say 3,000 homes or more) could and should benefit from the DCO regime,  the use of CPO and other powers to bring them forward.

Secondly, planning should plan positively for new settlements at a sensible scale relative to needs.  If there is significant unmet need in an area then the LEP should be charged with reviewing the best locations for major new development.

Thirdly, we should think about what a new Towns Act would need to look like and how the layering of European law would affect the process for adopting it.  Whilst the compensation regime will look different in some ways to the 1950s and 1960s approach, it will have to perform the same role – assembling land at scales and values that allow masterplanning and design excellence, using longer term land values to pay for the infrastructure, and a fund of part private/part public monies to meet the upfront costs of getting it done in return.  The process itself should learn the lessons of the doomed rush to Eco Towns and reflect the role that Community Interest Companies and other structures can play in providing a long term stake in making new places.

Turn up the volume, part 2

Meeting housing needs is now recognised as a national challenge (see Turn Up the Volume, Part 1).  Love or hate it, the Regional Strategy system was intended to force reluctant authorities’ hand on planning for large scale delivery.  The requirement to objectively assess needs is intended to have the same effect.  But it is only part of the solution, because delivering new places requires a multi agency approach and, fundamentally, a commitment to infrastructure delivery.  Assembling land at sensible values to prevent circular viability debates is also critical.

The NPPF has proved a sensible tool for delivering growth by appeal, which sometimes provides a convenient excuse for authorities for not making decisions.  The Duty to Co-operate is a good approach but is currently delivering punishment not success in the absence of a duty to agree.  If we are genuinely going to deliver the necessary number of new homes of over the next two decades, what reforms will be needed?

Reform on the cards

Labour has committed to a target of 200,000 new homes per year by 2020 if elected. There is loose talk of supplementing the duty to co-operate with a ‘right to grow’, intended to avoid delivery being mired in the same way as schemes like West Stevenage. The RICS wants the Bank of England to get involved. It may be that the political scales are nearing the point where the wrath for failing to meet needs will outweigh the ire for doing so.  Hence the fact that whilst Ministerial brief has shrunk, it is the Treasury and the Prime Minister making announcements on housing.

cartoon

Source: Inside Housing

The first structural change is a recognition in planning that private renting – and the potential for institutional investment in it – is a significant part of the solution.  Planning can be used to help create the commercial certainty to attract institutional investment, but PRS developers will need to provide a more persuasive model than cheap public land and affordable housing waivers.  How can development structuring using public land and long-term equity get the initial land values right for PRS models? How can affordable tenures – both their type and duration – be innovated to work within them?  What is the role for Registered Providers as part of consortia or place-makers in their own right? As CIL rates begin to hit student housing schemes, genuine PRS portfolios will have to prove themselves.  So the first change is that “objectively assessed needs” has to ensure that PRS requirements are identified and met.  The draft NPPG failed to address that issue which was a missed opportunity.

Three further suggestions for reform will follow in Part 3.

Turn up the volume

Despite political demotion, housing delivery is a key issue for planners, politicians and investors.  Residential yields are driving interest in mixed use schemes that have been dormant for years and in new products such as PRS (http://www.dentons.com/en/insights/articles/2012/november/12/if-you-build-it-will-they-come).

Going for gold

Three years ago (13 September 2010) the House of Commons Communities and Local Government Committee heard from Eric Pickles, Grant Shapps and Greg Clark on the abolition of the “crazy” Regional Strategies an action described by Shapps as “the greatest favour of getting homes built of any government since the last war“.  Building more homes each year than during the previous Government’s tenure would be the “gold standard upon which we shall be judged” he said.  There is a forecast 20% increase in new households to 2031 and planning will fail to meet identified needs if it delivers less than 240,000 per year, every year, for the next 20 years. This remains the Government’s current target, by 2016. So where are we now?

Mind the gap

A long way from the Gold Standard – 106,000 completions last year (9% down on the previous year).  The 2007 Calcutt Review concluded that the housebuilding industry would have to grow by nearly 5%, compounded, over the next decade to achieve the Government target. The pictures tell the story (see below).

shelter

(Prepared by Shelter)

England has a track record of housing reform to head off the social unrest that shadows overcrowding and dissatisfaction with place.  Since the announcement of the Government’s Gold Standard for delivering at least 240,000 new homes per year, housing has begun to assume even greater political significance.  Scarcity values, the diversion of national wealth to servicing mortgage debt and the restraint on home formation are ultimately a brake on the economy.

We have to double up delivery from today (and achieve an increase of 50% above recent peak delivery). That is a new Southwark delivered (not just consented) every year, or a new Birmingham (numbers-wise) every three. Assuming the private sector can deliver 130,000 homes every year, that still leaves an Exeter, 7 Hampstead Garden Suburbs or 2 Welwyn Garden Cities every year for two decades. Will Nick Boles’ vision of self builders delivering the gap be realised? You can, apparently, shoot him if he is still responsible in 2015.

The next blog on this topic will look at what reforms are needed to genuinely deliver against this volume of unmet need.

Three more little words … “duty to co-operate” this time

Just as examiners have started to bare their teeth about local plans meeting housing need, they have also begun to chide authorities who have failed to fulfil the duty to co-operate.

The duty in the Localism Act 2011 requires local authorities and public bodies to engage constructively on strategic issues to maximise the effectiveness of local plan preparation.  Authorities must demonstrate that they have complied with the duty at the examination of their plans.  If they have not done so then the plan must die; at least until resurrected by the authority going through another iteration of the plan complying with the duty.  And some plans are dying.

In Hart the examiner found that the authority had not properly engaged with other authorities at a time when it was still considering the level of housing need to be met, and ill-attended meetings late in the plan making process could not address that failure[1].  The draft plan has now been withdrawn.

In Kirklees the examiner’s view was even clearer:

“It is not clear what, if any, co-operation was undertaken in the preparation of the Core Strategy before its contents were finalised …” and “I have seen no evidence that, during this period, there has been any effort to meaningfully engage with adjacent Councils with a view to a proper re-assessment of the Core Strategy’s provisions.”[2]

So failing to meet the duty is a real risk.  What does an authority have to do?

The draft NPPG gives some useful guidance on the duty.  It makes it clear that co-operation should deliver results, rather than just being an excuse to meet, and that the duty applies through the whole of the plan making process.  The NPPG could be clearer that it requires an open mind about the outcomes.  In far too many cases the “engagement” is on paper only, since the authority has already decided what it wants to do.  It would also be helpful if the NPPG drew a distinction between co-operation and collusion; there are signs of authorities hiding behind co-operation to avoid meeting “objectively assessed needs“. 

There are still real questions about the duty:

  • what happens if an adjoining authority refuses to co-operate?  The NPPG suggests this should be explained as part of the examination — but fails to indicate what happens, if anything, to the authority that is not co-operating.
  • why is there no similar duty to co-operate on applications, particularly ones of strategic significance?  Delivery is important and the absence of a duty at the sharp end is disappointing.
  • most importantly, will examiners continue to act as bravely as they are at the moment?  PINS is doing a fantastic job policing the boundaries of plan-making.  We all have to hope that they remain courageous.

Three little words

Not location, location, location.  Not even Goodbye Mr Prisk.  Instead “objectively assessed needs“.

There has been a spate of decisions in which these key words in the NPPF have been critical.  Waverley has just been advised to jettison its emerging plan because a new housing market survey has made it clear that the present plan is not meeting “objectively assessed needs“.  Gravesham recently received a note from their examiner saying that their plan was potentially unsound for the same reason.  Need has been an issue in Bath for two years or more as part of a debate about what housing market area applies in and around Bath, and whether there is a separate “need” for affordable housing that has to be calculated and accommodated.

These three little words have, finally, given some spine to the planning system.  It has made it clear that planning should be about meeting human needs if they can be met sustainably.  That requires difficult local decisions (in a localist world) about how housing, commercial and retail needs should be accommodated.  In some places there are genuine environmental and physical barriers, and the need will instead have to be met in adjoining towns and cities.  What is clear from the run of decisions is, thankfully, that no-one can shirk their responsibility and everywhere, in the near future, “objectively assessed needs” will have to be addressed in local plans and in planning decisions.  Properly, localism will then be a local choice about how needs are met; not about whether they should be met.