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CIL fix is good news, more please …

After an absence, the tradition of new year Community Infrastructure Levy Amendment Regulations is back in the form of the draft Community Infrastructure Levy (Amendment) Regulations 2018, published on 14 December 2017.

The amendments are another sticking plaster ahead of a full overhaul of the CIL Regulations, this time to deal with difficulties that some authorities had got into on the application of indexation to CIL charges for S73 permissions.

Section 73 so simple

If a S73 permission is granted where no CIL charging schedule was in place at the time of the original permission, the CIL Regulations are intended to only charge the ‘top up’ change in CIL. That is entirely clear from Ministerial statements in the run up to the implementation of the Community Infrastructure Levy (Amendment) Regulations 2012 which introduced the regulation 128A regime (and various other changes) for such transitional cases.

A quirk of the drafting meant that – taken in an inappropriately literal way – the difference between indexation values for the original and the S73 consents would result a charge based on the application of the indexation change across the whole of the consented floorspace. So, for example, a S73 permission that in floorspace terms should have either zero, negative or minimal change in CIL chargeable value was being treated as having a charge relating solely to indexation change.

The Valuation Office rejected that approach on an appeal against the resulting chargeable amount in March 2017, which remains subject to stayed judicial review claim by the collecting authority.

No change

The amendment regulations now address this point by clarifying that the same indexation base value should be used for working out the chargeable value of each consent.

Although they will only come into effect later this winter, the Explanatory Memorandum states that they are clarificatory.

What lies beneath

That is important, because the ‘fix’ is partial and does not address all the mischief in the Regulations for S73 applications. By making it clear that the changes are ‘clarificatory’ we now know the Government agrees with the common sense interpretation of the Regulations the Valuation Office Agency has taken on appeal.

The Government should be commended for having listened and acted wisely. They should now make a habit of that on CIL – our next blog will include our New Year’s wish list for simplifying CIL.

In the meantime real care is still needed when dealing with S73 applications, indexation and abatement applications.

Deliverability vs Delivery – Court of Appeal confirms NPPF approach

The Court of Appeal has clarified the meaning of ‘deliverable sites’ in the key housing land supply provisions of Paragraph 47 NPPF (5YHLS).  As well as emphasising the need for pragmatism when applying the NPPF, the judgment confirms the need to get timing right if challenges are to be made to the assumed rate of housing delivery.

Supply test in question

In St Modwen v SoS CLG, the developer challenged the housing trajectory put forward by the authority to satisfy the NPPF 47 requirement to show specific deliverable sites sufficient to provide five years worth of housing against objectively assessed need. NPPF Footnote 11 confirms that ‘deliverable’ means available now, offer[ing] a suitable location for development now, and […] achievable with a realistic prospect that housing will be delivered on the site within five years and […] viable.

The Inspector disagreed that sites without permission should be excluded.  She accepted that the rate of consents was likely to increase in light of the draft plan.  She acknowledged a distinction between deliverability and likelihood of delivery: ‘…it may well turn out that not all allocations currently identified as deliverable will in fact be delivered’. The submitted HLS figures were robust, because ‘the assessment of supply is distinct from that for delivery’.

The Secretary of State accepted the Inspector’s finding that there was a 5 year HLS and dismissed the two linked appeals.

Courts insist on common sense

The High Court and the Court of Appeal dismissed the argument raised in seeking judicial review of the decision that the SoS had misunderstood and misapplied the concept of ‘deliverability’.  He should, it was claimed, have considered what would ‘probably be delivered’.

The Court of Appeal disagreed that Ouseley J’s judgment in the High Court suggested that assessment of ‘what probably would be delivered’ is part of, not separate from, the assessment of deliverability.

Ouseley’s judgment – that the assessment of “deliverability” … is an assessment of the likelihood that housing will be delivered. [It] does not require certainty that the housing sites will actually be delivered’ (emphasis added) – simply reflected the distinction between the HLS figure required under the first part of NPPF47 and the ‘expected rate of delivery’ required for the trajectory under the second part.

The Court of Appeal once again went out of its way to criticise ‘unreal’ arguments on the meaning of NPPF policy, holding that:

  • there is a consistent and intentional distinction in the NPPF between ‘deliverability’ and the ‘expected rate of delivery’;
  • deliverability in footnote 11 concern sites’ capability of being delivered – not the certainty/ probability of delivery;
  • the appeal decision was being taken in light of NPPF49, engaging the question of demonstrable 5YHLS, not a question about the ‘the expected rate of housing delivery’.

So what?

The judgment serves to emphasise that:

  • there need only be a ‘realistic prospect’ of delivery for sites to be relied in within the 5YHLS;
  • challenges to the assumptions around the expected rate of delivery generally need to be taken up at the Local Plan examination stage;
  • Local planning authorities do not control the housing market. The NPPF recognises that.’

The last point underlines the fact that LPAs play a critical role, but are only one part of the housing delivery jigsaw. It is also illustrates how important the Housing Delivery Test will be, as a sense check on assumptions and progress, if it is introduced as promised in the Housing White Paper.

CIL – false starts can be punishing

Community Infrastructure Levy liability is determined by the point at which development is notified or deemed to have commenced. The point at which that actually occurs is not crystal clear and a recent Planning Inspectorate decision suggests that care is needed by collecting authorities and developers.  At the moment there is a risk that a planning permission that has not been implemented for planning purposes (and which could, indeed, lapse for a failure to start in time) has been implemented for CIL purposes creating a CIL liability.

CIL Triggers

CIL liability is not triggered by a material start: it is triggered by the date given in a commencement notice (unless the notice is withdrawn in advance) or, in the absence of advance notice, the deeming of a commencement date by the collecting authority.

A material start without serving a commencement notice means that CIL liability is accelerated (losing instalment and other deferral benefits) and inflated (losing some reliefs).

What constitutes a material start for CIL purposes can therefore be a million dollar question.

False Starts

The CIL Regulations require the chargeable development to have been commenced:

  • that means (under reg.7(2)) the date “any material operation begins to be carried out
  • material operation has the same meaning as under Section 56(4) TCPA 1990. Care is needed, because the Courts have confirmed that the list in Section 56(4) is not exclusive – other operations could therefore trigger CIL where material
  • reg.7 does not refer to Section 56(2), which is clear that for the purposes of meeting time limit conditions, material operations have to be “comprised in the development”. Nonetheless, the Regulations are clear elsewhere that it is the chargeable development that must be commenced.

For time-limit purposes, the law is clear that operations done without discharging genuine pre-commencement conditions are not referable to the relevant planning permission (FG Whitley & Sons v SoS Wales(1992) 64 P & CR 296: “if the operations […] contravene the conditions, that cannot be properly described as commencing the development authorised by the permission“). The operations are unlawful and at risk of enforcement, unless recognised exceptions apply.

Logic suggests that the same legal authority – and outcome – should apply to early starts for CIL purposes. CIL should not be triggered but there may be enforcement consequences and CIL consequences associated with any use of retrospective permission under Section 73A TCPA 1990.

Inspectorate disagree

CIL practice and logic have been bad bedfellows. In a recent CIL appeal decision, the Planning Inspectorate was asked to determine the correct deemed commencement date where development began without complying with a pre-commencement (noise protection) condition.  The appellant claimed that the development was not referable to the planning permission and so not chargeable. The authority contended – probably rightly – that the condition was not a genuine pre-commencement condition for Whitley purposes. The Inspector took a more purposive approach, finding that:

  • The CIL regime is not concerned with whether or not a development is lawful, it is only concerned with whether it has commenced.
  • The date of commencement of development is a separate matter from the date upon which development could be said to be authorised.

It is not the first decision to adopt this approach (also applied on appeal in 2014). Then again, two wrongs do not make a right.

Common Sense?

Care is needed by developers and reliance on the Whitley principle is risky, not least because at one level the relevant law is about the extent to which enforcement would be perverse.  The other side of the coin is that some of the findings noted above are arguably perverse: the CIL regime is (explicitly) concerned with the question of whether the chargeable development has been commenced. If the Courts would not recognise commencement for planning purposes in reliance on the chargeable permission – and would instead uphold enforcement – it follows that the ‘date for commencement of development’ is not a separate matter from the point at which that commencement could properly be said to be lawful.

The two appeal decisions do not, in that sense, recognise that:

  • the Regulations require a different approach: although reg.7(2) does not require the commencement to be referable to the chargeable permission, every other part of the Regulations that relies on reg.7(2) does so clearly.
  • this avoids otherwise perverse outcomes: for example:
    (1) service of CIL stop notice (for development taking place under the chargeable permission) where an enforcement notice could be served against development being treated as unauthorised by that permission;
    (2) CIL payment being required despite the Courts determining that the permission itself has not been implemented and so has lapsed.

In the application of Planning law, common sense tends to rise to the top, eventually. There is no reason why the CIL regime should be interpreted in any less sensible way but until there is clarity through further reform or guidance on this point, care is needed.

What is a highway?

We look at a recent decision which reiterates what constitutes a ‘highway’. The recent Court of Appeal judgment in the case of London Borough of Southwark v Transport for London [2017] serves as a useful reminder of the common law principles of what constitutes a highway and reaffirms that the extent of a highway authority’s interest in such land is restricted to the ‘top two spits’.

Read the full article

This article was first published in Property Law Journal (December 2017/ January 2018) and is also available at http://www.lawjournals.co.uk/

 

The new New Towns Revolution

In May we wrote about Lord Matthew Taylor’s clause in what became the Neighbourhood Planning Act 2017 introducing provision for locally led new towns. The clause provided a skeleton framework.

Flesh is now being put on the bones. Draft regulations have been published by DCLG setting out the way in which local authorities will step into the place of the Secretary of State and oversee locally led new towns. With the exception of the power to confirm CPOs, local authorities will be responsible for guiding and monitoring the new New Towns.

Building on the experience of the old New Towns, local authorities will be required, from the outset, to plan for the long term stewardship of the assets of the new town for the benefit of the community. As described in the consultation paper this should ensure that the powers are used to create places “that are sustainable for the long term, with the resources to reinvest both in the renewal of the physical place and support a thriving and diverse community“.

The only false note in the draft regulations is a requirement for Treasury consent if the outstanding borrowing of a development corporation is in excess of £100 million. Almost any genuine new town will, at least potentially, need more debt than £100 million. The “risk” that the Treasury may refuse consent or impose conditions on it makes it far less likely that the development corporation model will be used. Having committed capital to acquire the land and provide infrastructure, no sensible local authority would want to take the risk of not being able to complete the development and secure a return on that investment.

Since the Chancellor explicitly endorsed the idea of five new towns, without financial recourse to the Treasury, it is assumed that this “hangover” from the old New Towns will be lifted.

Planning – the Big Challenges and Opportunities

As we come up to the end of 2017, Planning TV looks ahead at how we could deal with some of the biggest challenges and opportunities in planning.

Housing has risen to the top of the political agenda, as well as the constant challenge of building the right kind of homes in the right places (which was the title of Government’s white paper that was released earlier in the year). There’s also the perennial issue of under capacity and skills in local planning authorities, which may change once increases in planning fees go up. The increased pressure on space is driving development on brownfield sites that may be potentially contaminated, leading to risks for developers and slowing the rate of housing delivery.

Challenges can also give way to opportunity. Greater density in cities affords new opportunities such as better public transport and more interesting mixes of land use. The way that people live in cities is changing, and so there is no shortage of problems that can be tackled in innovative ways. Alice Lester, Head of Planning at the London Borough of Brent, talks about how local authorities have innovated to build more council housing, whilst balancing housing demand and densification in her part of London.

This episode also features Margot Adele Orr Jones, Masterplanner at Atkins Acuity; and Jennifer Travers and Emma Broad from Dentons Environment and Real Estate teams.

Brought to you by Dentons and Citiesmode it draws on the knowledge of a core panel of experts from across the sector, supplemented with special guests hand picked for their particular expertise. From Greenbelt to Brownfield, national planning policy to local plan-making and everything in between, Dentons Planning TV provides a unique insight into the thoughts of those involved at the sharp end.

Common Sense Needed to Flush Out SPD Abuse

The High Court has confirmed the need to tread a common sense path through the mire of the Local Plan regulations, in quashing a supplementary planning document (SPD) that strayed into Development Plan Document (DPD) territory in William Davis Ltd & Ors v Charnwood Borough Council [2017] EWHC 3006 (Admin) (23 November 2017).

Light Touch

SPDs escape the examination process needed for DPDs.  They are often seen as simply elaborating on existing policies.  The Town and Country Planning (Local Planning) (England) Regulations 2012 are more nuanced: SPDs are allowed to contain policy, but it must be justified and must not conflict with the adopted development plan (Reg 8(3)).  SPD policy cannot supersede development plan policy and is merely a material consideration.

Substance Over Style

Local Development Documents (LDDs) that have the characteristics listed in regulation 5 must (under reg 6) be prepared as Local Plans (i.e. DPDs).  SPDs are defined negatively (reg 2) as anything that is not a Local Plan. In practice, this means a document containing statements regarding “any environmental, social, design and economic objectives which are relevant to the attainment of the development and use of land encouraged by a [Local Plan]”.

The regime is messy and open to abuse where SPDs stray into Local Plan territory. SPDs cannot contain policy identifying development and use of land which the authority wishes to encourage, making site allocations or site allocation policies or setting development management to guide application decisions.

No Mercy

In Charnwood, Gilbart J quashed policies in a housing SPD.  The core strategy contained strategic policies with high level targets for housing types to meet demographic needs, with a “subject to viability” affordable housing target and a requirement that types, tenures and sizes of homes would be appropriate having regard to identified housing needs and character of the area. The SPD prescribed different percentages for all house sizes, and a 60-70% affordable housing requirement for some unit types.

The statements were quashed: they contained policies; and they clearly related to forms of development to be encouraged and imposed development management policies against which applications could be refused (or conditions to control unit mix imposed) (under reg 5). Although there was some legitimate SPD ‘guidance’ that did not save the offending policies (citing R (Skipton Properties Ltd) v Craven District Council [2017] EWHC 534 (Admin)).  They could only be adopted as a Local Plan (DPD), following examination.

Take Heed

The judgment emphasises several points that authorities and affected parties should pay attention to:

  • where an ‘SPD’ is promoted as a “stop gap” in the absence of  saved policies, by definition it cannot be supplementary (and is itself a primary policy assuming DPD status as in the Skipton case);
  • a housing mix policy which could lead to refusal on the grounds that the proposed mix is unacceptable (or an outline application condition imposing a particular mix) is a statement regarding the development of land and development management policy;
  • uncertainty arising from the “very poor” drafting of the Regulations should be dealt with in light of the “realities of development control” and the fundamental importance of robust and independent examination of the development plan;
  • viability impacts were material and had adopting the policies without consideration of those impacts was unlawful;
  • SPD should not be used for making an alteration to plan policy to address new evidence.

So what?

Authorities will need to be far more careful about the statements they include in what purport to be SPDs on issues such as housing mix and affordability but also density, height and other matters.  There is still a tendency to sneak swathes of untested, unjustified and ineffective policy in through the back door via dodgy SPDs.

The judgment comes when the Mayor of London’s Affordable Housing Supplementary Planning Guidance (SPG) document is under legal attack for having strayed into the realms of policy, despite being clearly stated not to constitute policy and arguably not to extending beyond the policies in the London Plan itself.

It remains to be seen whether that challenge will be recast as a challenge to specific decisions which – wrongly – treat the SPG’s contents as a policy or a fixed position (which often feels like it is the case).

Planning TV: Compulsory Purchase Orders (CPO) and Urban Regeneration

The emergence of the Housing White Paper in February 2017 saw increased attention to the role of Compulsory Purchase Orders as a tool for regeneration.

Planning TV spoke to Michele Vas at Dentons to gain a picture of the legal context behind CPOs, the legislation that enables CPOs to happen, and CPO guidance set out the government, outlining proper justifications for the application of CPOs for redevelopment projects.

Tayo Araoye at Westminster City Council spoke to us about CPOs in the Local Authority context and the effective community consultation and engagement processes involved.

We discussed the role of CPO legislation in the NOVA Scheme in Victoria SW1 with Justin Black at Land Securities, a shared vision between Westminster and Land Securities, and how CPO negotiations facilitated engagement with the project.

Brought to you by Dentons and Citiesmode it draws on the knowledge of a core panel of experts from across the sector, supplemented with special guests hand picked for their particular expertise. From Greenbelt to Brownfield, national planning policy to local plan-making and everything in between, Dentons Planning TV provides a unique insight into the thoughts of those involved at the sharp end.

ACV listing works to ultimately save a Maida Vale favourite?

The pub formerly known as the Truscott Arms in Maida Vale, north west London will re-open as the Hero of Maida on 1 March 2018 as part of the Harcourt Inns Group of gastropubs.

The Truscott Arms closed on 4 August 2016 after the then tenant said that a 333% rent increase (amounting to extra £175,000 per annum) rendered the business unsustainable. The hike in rent appears to have been intended to override the pub’s Asset of Community Value (ACV) listing and enable it to be converted into luxury flats on account of:

  • the increased market rent (£250,000 per annum) being too much for any potential tenant to take on, making it not viable for the property to continue being used as a pub and opening it up to applications for other uses i.e. residential units; and
  • the supposed (inflated) value of the Property being too expensive for the community to acquire.

A local community group (represented by Dale Ingram of Planning for Pubs Ltd) was successful in its endeavours to have the Truscott Arms, a favourite local pub, listed as an ACV on 29 April 2015. Despite a successful challenge to this listing having been made by the then freehold owners of the pub and the pub being de-listed in August 2015, it was relisted in November 2015 and remains so today (expires 5 years from listing date).

The Friends of the Truscott Arms ACV reportedly relinquished its rights to attempt to acquire the pub themselves from the then freehold owner  – the Localism Act 2011 provides them with 6 months to attempt to do so – following assurances from the Harcourt Inns Group that they would re-open the Truscott Arms as a pub post acquisition with the intention being to “preserve this community hub and reinstate a spot for locals to come by and enjoy good food“.  Although it is not clear quite what part the ACV status had in securing the retention of the pub the issues raised by the listing clearly had an effect, and would have been a material consideration in any application for a non-pub use.

What is happening with ACV applications generally?  The pace and success of applications seems anecdotally to have slowed.  A review of the Westminster City Council website suggests that the Truscott Arms is just one of approximately 10 successful ACV nominations in the Borough since 2015, amounting to a nomination to listing success rate of 43.5% (with 13 of 23 nominations having been rejected). Interestingly, the website suggests that only 4 listing decisions (40%) have been challenged by the freehold owners, with only one other – in connection with The Prince of Wales Public House – having been successful in removing the ACV status of a Property.

The review decision for The Prince of Wales Public House dated June 2016 suggests that for there to be a realistic prospect that part of the building would, within the next 5 years, be put to a non-ancillary use that would further the social well being and interests of the local community there needs to be:

  • specific details about the types of activities that have taken place at the property in the recent past, when they took place and over what period to substantiate a non-ancillary use, particularly when the proposed non-ancillary use (i.e. music and dancing) could otherwise be seen as part of the general use of the public house; and
  • compelling evidence to contradict any existing evidence about the pub been the cause of anti-social behaviour and/or associated with criminal incidents in the recent past.

This approach may need to be reviewed.  It seems to focus a little too much on the past, rather than the future community use.  For more background information on ACVs please read some of our earlier blogs.

Planning TV: Planning for Healthy New Towns

In more recent times, there has been a refocus on health in planning and how the built environment can encourage better health outcomes. NHS England’s Healthy New Towns Programmes is looking at how the planning and design of communities could be done in 10 demonstrator sites across England, as well as rethinking how health and care services can be delivered. Associated with the programme was an international design competition to visualise how this could be done, which Citiesmode submitted the winning entry.

Philip Liu at Citiesmode talks about some of the ideas from the bid. Andre Pinto from Public Health England explains some of the challenges of delivering health and care services and what solutions that the built environment could provide. They are both joined by Jamie McKie from Dentons Planning and Public Law team.

Brought to you by Dentons and Citiesmode it draws on the knowledge of a core panel of experts from across the sector, supplemented with special guests hand picked for their particular expertise. From Greenbelt to Brownfield, national planning policy to local plan-making and everything in between, Dentons Planning TV provides a unique insight into the thoughts of those involved at the sharp end.