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).


(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.

Useful nuggets

The National Planning Policy Guidance has some useful nuggets.  There has always been a question about how planning obligations should be secured where the local authority is the main land owner. People have played games with unilateral obligations, with allowing the general public to enforce via “third party rights” clauses and having agreements with Counties in two tier areas.

The NPPG now makes it clear that it is acceptable for planning conditions to prevent development unless a planning agreement has been entered into.  The condition must meet the Newbury tests and, importantly, must be precise.  In practice this means that the terms must have been largely settled by the grant of permission.  Now that DCLG have endorsed this approach it will make it far easier to deal with regeneration schemes and strategic sites where not all of the land can be bound at the outset.

Less helpfully, the NPPG repeats the advice that conditions should not require the payment of contributions.  This seems to be hair-splitting given the acceptance that planning agreements can, effectively, be required by condition. It would also be far more transparent in terms of the requirements of a consent.  Such conditions are used in Ireland and Scotland – why not in England?

New planning ‘guidance’

Always remember that this is not new ‘policy’. It is only guidance. It changes nothing.

For applications and appeals the decision making framework remains primarily the NPPF and the adopted/emerging development plan policies. In some ways the Guidance is an unnecessary irritant. Unhappily it will probably lead to arguments that it requires both resolutions to grant and recent inquiry decisions to be reviewed — which will waste time and money for all involved.

Hopefully, DCLG will make it absolutely plain that the NPPG does not create new policy.

Heygate Estate Information Commissioner’s report

The Information Commissioner’s report on a complainant’s request for financial information relating to the Elephant and Castle project raises some interesting issues.

One point of principle is that if a Council is asked to rely on a financial justification for waiving a policy requirement then the developer should often expect that material to be public in due course. If the policy is adopted, it is clear, post Cherkeley, that developers cannot challenge its legality/appropriateness.  Depending on the nature of the scheme, the choice is stark – either live with the development plan requirement or be prepared for the public to test the justification for departing from it.  The decision confirms the overriding importance of the public interest test under the Environmental Information Regulations 2004, which – unlike the Freedom of Information regime – stem from the Aarhus Convention on access to justice in environmental decision-making. 

The ICO’s decision is helpful for developers, though, in confirming that Lend Lease’s appraisal information was confidential, how such information needs to be handled and that as a starting point its disclosure would cause commercial prejudice. 

Developers should (and in most cases can) submit appraisal material that causes no real disclosure problem, but need to ensure that it is handled properly and where the scheme involves public land, policy breaches or other controversial elements, be aware of the ultimate risks of disclosure.

Getting a fair deal over permissions

Developers and local planning authorities have become more disciplined in ensuring that section 106 obligations comply with regulation 122, since CIL’s introduction. This requires obligations to be necessary and to have a direct relationship to the proposed development, both in terms of the nature of the obligation itself and in terms of it being proportionate to the scale of development.

The appeal decision on Barratt Southern Counties’ Bishopdown Farm scheme in Salisbury raised the issue of whether the regulation 122 test is an irrelevance when proposed community benefits are incorporated as part of an actual planning application.

Barratt’s application for 500 homes included 51 hectares of land to be turned into a country park. Opponents suggested that the country park was simply a sweetener to secure planning permission. The inspector concluded that the park was not necessary to make the housing development acceptable in planning terms. But the secretary of state disagreed, stating that the inspector had been “misguided”. The park was part of the application and the agreement simply provided for its provision and transfer into public ownership, he decided.

A cynic might say that this decision is simply another form of repackaging flexibility in planning obligations conferred by cases such as R v Plymouth City Council ex parte Plymouth and South Devon Co-operative Society [1993] and is simply the planning system finding yet another way to escape the shackles that the CIL regulations and Circular 05/05 impose on development. If the Bishopdown Farm approach is followed, the death of section 106 obligations as we know them may not be imminent after all. But when the issue of “buying” planning permissions is a highly topical issue, particularly in light of proposed amendments to the Localism Bill, who guards the guardians?

Community Infrastructure Levy – the consultation proposals tease but do not satisfy

In the early summer, and for the third year running, planners and lawyers faced a consultation on changes to the Community Infrastructure Levy (CIL). While most of the amendments to the regulations and guidance put forward by DCLG were welcome, they still do not deal with structural imbalances in the mechanism. It still does not have a level playing field at examination. It is still to blunt in practice. It does not deal adequately with large sites. And sensible mechanisms for the actual delivery of infrastructure have yet to emerge.

We have been promised a wholesale review of CIL in 2015. Part of the present problem is that the original design of CIL was imperfect, largely in an attempt to make it easy to adopt and hard to abuse. Unfortunately, the imperfections have made it imbalanced. Over time, that imbalance will reduce confidence in the system and will give more power to those who have objected to CIL, as a matter of principle, from the outset.

Commitment to infrastructure delivery through CIL

The commitment to infrastructure delivery is important. Only if there is a clear infrastructure development plan can a charging authority meet the proposed new duty to “demonstrate” that it has struck an appropriate balance between the desirability of funding infrastructure and the effects on the economic viability of development. If authorities have to demonstrate an appropriate balance, this will empower examiners to interrogate CIL charging proposals rigorously. But in the absence of a clear commitment to deliver infrastructure, that can then be tested, it will be very difficult for objectors to demonstrate a failure to achieve this balance. Examinations will remain one-sided.

Prematurity goes back into the box

Under the plan-led system, it has been rare to see refusals of otherwise acceptable schemes on the grounds that they would prejudge the outcome of the plan-making process. The courts have historically made clear that plan preparation cannot be a rubber-stamp reason for refusal.

The NPPF addresses the weight to be given to emerging plan policies, but says nothing about prematurity. The government’s January 2005 guidance note The Planning System: General Principles, which survived publication of the NPPF last March, advises that refusal on prematurity grounds is “seldom justified” where a local plan is at the consultation stage and has no early prospect of submission for examination, recognising that the resultant delay in determining use of the land would be unacceptable.

Policy on prematurity concerns the crucial balance between planning and delivery. A loose application of prematurity objections flies in the face of the General Principles and the urgency injected by both the NPPF and the Planning for Growth agenda. The 2005 statement still sets the bar high for those seeking to postpone growth until another day.