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A layer of complexity, a review of the ramifications of the Localism Act five years on

The Localism Act 2011 obtained royal assent in November 2011, gradually bringing into effect a raft of legislation supporting the government’s communities-based agenda. Following the Conservative Party’s 2010 manifesto, subtitled ‘Invitation to join the government of Britain’, localism remained a focus of the coalition government, and remains a focus of the current government.

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This article was first published in Property Law Journal (October 2016) and is also available at www.lawjournals.co.uk

 

Planning TV – Spotlight on the London Plan

Planning TV - LOGO PURPLE BACKGROUND

Dentons Planning TV is a new and innovative platform for engaging in and reacting to the latest developments in the dynamic world of planning. Its mission statement is simple: to provoke debate and facilitate engagement at all levels in the planning process.

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In this episode of Planning TV, Michael Lowndes (Executive Director at Turleys) joins Jamie Mckie to discuss the Mayor of London’s planning powers and the London Plan.  Andrew Barry-Purssell, Westminster City Council and former head of the London Plan team unpacks the process of developing the London Plan.

Vacant Building Credit – an own goal?

Vacant Building Credit (VBC) was re-introduced into the NPPG in May 2016 to less vocal opposition than it faced when originally introduced following a Ministerial Statement in November 2014.  The Statement remains intact following the Court of Appeal’s ruling that it should stand.

The broad premise of  VBC is that is acts as a credit which can be offset against the affordable housing requirement of new development.  The credit is equivalent to the existing gross floorspace of a vacant building brought back into use or demolished for redevelopment purposes.  However, neither ‘abandoned’ buildings or those vacated for the sole purpose of redevelopment are able to benefit from VBC.

Unhelpfully, the NPPG gives no guidance on how VBC is intended to be applied.  Two immediate issues arise:

  • buildWhat is meant by “vacant”?  There is a concern that VBC will incentivise landlords to force the vacation of offices, industrial buildings or even houses to benefit from VBC.  There is also little assistance on where the line can be drawn to assess whether a building is “vacant” or “abandoned”.
  • What is meant by the “gross floorspace” of the vacant building – GIA over GEA?  Once that has been confirmed, how that floorspace should be applied to calculate the off-set?

As a consequence, local authorities are left to make sense of how to apply VBC, and inevitably are creating methods and policies for approaching VBC in a way which will minimise its impact on affordable housing delivery.  Emerging practice includes:

(i)         interpreting “vacant” as being opposite to the “in use” building test set out in the CIL Regulations.  This ensures that a development is unable to benefit from both VBC and the demolition credit which can reduce the amount of CIL payable;

(ii)         requiring the entire building to be vacant, not just part of it;

(iii)        requiring the building for which VBC has been sought to have been actively marketed for a specified period (and for the method and details of marketing to be provided);

(iv)        requiring details of existing floorspace to be provided on a GIA basis when a planning application is submitted.

Of those local authorities that are putting in place policies for calculating VBC, it is clear that there is no standard approach; others will be reviewing whether they apply VBC at all.  The West Berkshire appeal confirmed that the VBC policy is a material consideration and is not capable of being applied in a “blanket” manner; many local authorities will be taking comfort from this, possibly even reviewing how Local Plan policies can be formulated to disapply VBC altogether.

VBC was introduced on the basis it would assist smaller developers deliver viable schemes, however the Government has failed again to build the necessary clarity into the guidance to ensure that it is only small developments which benefit from VBC.

Left to local authorities to put in place their own mechanisms provides no guarantee that VBC will assist those it was intended to; as a consequence VBC’s long-term impact on affordable housing remains potentially damaging at a time when the need for affordable homes remains critical, while the ability to rely on it to bring forward otherwise uneconomic schemes remains unclear.

Improving the use of Planning Conditions?

Too many unnecessary and overly restrictive conditions are still routinely attached to planning permissions, driving up costs and impeding development. It is against this backdrop that the Government proposed further reforms in the recently published Neighbourhood Planning Bill aimed at streamlining the use of planning conditions.

Long game

This is not a new objective. Since the Killian Pretty Review in 2008 successive Governments have been on a drive to minimise the use of unnecessary conditions. For instance, in April 2015 the Government introduced the concept of ‘deemed discharge‘, whereby an applicant can treat certain conditions as discharged if the LPA fails to reach a decision in the requisite time frame. Although the intention was admirable, it is debatable whether this reform has been effective given that the power is rarely relied upon in practice.  As we have pointed out before, part of the answer has to be improving the quality of some applications in the first place and giving a less risky route to appeal onerous conditions.

Current proposals

textThe DCLG consultation ‘Improving the Use of Planning Condition’ (the ‘Consultation’), which was launched in conjunction with the Neighbourhood Planning Bill, seeks views on the Government’s proposals to improve the use of planning conditions and closes on 2 November 2016.

There are 2 key elements to the Government’s proposals:

  1. Restriction on the use of pre-commencement conditions without prior approval by the applicant; and
  2. Prohibition of specific types of conditions.

1) Restriction on the use of pre-commencement conditions

LPAs would not be permitted to use pre-commencement conditions without prior approval by the applicant. By giving applicants an earlier opportunity to challenge unnecessary pre-commencement conditions, it is hoped that a consensus can be reached between the parties at the outset and the likelihood of appeals reduced.  Of course, there is a risk that front loading the process will lead to delays in planning applications being determined.  There are several practical implications:

  • Where an applicant refuses to accept a proposed pre-commencement condition the LPA will have a number of options at its disposal: (i) revising the condition so that it is agreeable to the applicant; (ii) allowing compliance with the condition post commencement; (iii) removing the condition in its entirety; or (iv) refusing planning permission.
  • The threat of refusal may do two things. Firstly, force applicants to consider whether they have really included adequate detail in the application itself. The answer will often be ‘no’. Secondly, accept unsatisfactory conditions in order to secure the permission (particularly where the grant of permission is a pre-requisite for the release of funds), and then use Section 73 to seek to remove the offending condition while avoiding an appeal scrutinising the merits of the entire application afresh.
  • The restrictions will not apply to outline permissions. The Consultation does not explain why.  However, the impact of delays caused by pre-commencement conditions is arguably lessened in the case of outline permissions given that development cannot commence until reserved matters have been approved in any event.

2) Prohibition of specific types of conditions

At present, LPAs have a broad power to impose “such conditions as they think fit” providing they meet the tests prescribed in the NPPF, its supporting guidance and case law.

The Government’s proposals are intended to provide greater clarity about conditions that do not meet these policy tests and should therefore be prohibited. The Consultation sets out examples of conditions that are categorised as unacceptable by existing planning practice guidance and seeks consultees’ views on whether such conditions should be expressly prohibited through legislation.

Given the relevant tests for using conditions are already enshrined in the NPPF and the example conditions set out in the Consultation are effectively prohibited (albeit through guidance rather than statute), the purpose served by this aspect of the reforms is questionable. A more productive use of this legislation would be to use the conditions as a benchmark for reasonableness, and allow binding decisions on them, via the mooted Dispute Resolution Service under the Housing and Planning Act 2016.

Conclusions

The reforms are unlikely to herald a new era in which conditions are used conservatively and pre-commencement conditions are consistently agreed upfront without the intention of resorting to Section 73. Bolder reform, providing a quicker right of appeal or up front, binding dispute resolution on this specific point, would be a much better outcome.

Neighbourhood Planning Unchained? The Neighbourhood Planning Bill 2016

Having lost its infrastructure component between the Queen’s Speech and publication, the slimline Neighbourhood Planning Bill had its first reading in the House of Commons earlier in September, and its technical consultation is open for responses until 19 October 2016.

The most interesting element of the Bill from a neighbourhood plan perspective is the process for modifying a neighbourhood plan – although the requirement for subsequent regulations means the precise effect is not yet known.

nhdChanges to bear in mind

This provision is helpful following the changes to the Planning Practice Guidance made earlier in the summer, which suggested that a fresh neighbourhood plan process would be needed (including a referendum) to update a plan where its policies become out of date.

The Bill provides a three tier process:

  • The local planning authority may make minor modifications with the consent of the neighbourhood planning body, without further consultation, examination or a referendum.
  • Where more substantial changes are proposed, a streamlined process is available (as long as the changes do not change the nature of the plan).  An examiner will then consider the amended plan (normally via written representations, and a further referendum is not required).
  • If the modifications would change the nature of the plan, a fresh neighbourhood plan process would be required. 

While it is questionable how streamlined this written representation process will be, and whether it would apply in circumstances where neighbourhood plans must be updated to be in general conformity with new local plans, the prospect of a quicker and simpler way of modifying a neighbourhood plan is to be welcomed.  Owners and developers will need to monitor carefully whether changes are being made that would prejudice their interests (and whether the process is being followed properly).

Weight

There are also several provisions which seek to give greater weight to neighbourhood plans, perhaps with political intentions. For example, provisions give weight to neighbourhood plans which have passed referenda but have not formally been “made” by the local authority.  It is not clear how much of an issue this has been, particularly given the current Planning Practice Guidance which states that emerging neighbourhood plans can be a material consideration, referring back to paragraph 216 of the National Planning Policy Framework weighing of emerging plans.  However, the Government is clearly keen to emphasise the importance of neighbourhood plans, and make it clear that local planning authorities cannot limit the consideration of neighbourhood plans by failing to “make” them. The Bill also requires local planning authorities’ statements of community involvement to set out their policies for giving advice and assistance with the making and modification of neighbourhood plans.

These changes demonstrate the continuing focus on and political will behind neighbourhood planning.

 

CPO – gentrification or regeneration?

The recent refusal by the Secretary of State to confirm Southwark Council’s CPO for the next phase of the Aylesbury Estate development demonstrates a meticulous adherence to  parts of the CPO Guidance which have largely been paid lip-service to in many previous CPO decisions.

The mantra that a compulsory purchase order should only be made in the “public interest” is often justified by the inevitable regenerative benefits of development projects.

And that should be good enough, should it not?  – when not a day goes by that the news is reminding us of our housing crisis, that our town centres are failing, of the social divides which exist within our local communities and, as we wait with bated breath, to see what long-term impacts Brexit will have on construction, funding and development, once that axe is finally swung.

Indeed, both the Secretary of State and Inspector agreed that the redevelopment of the Aylesbury Estate would provide social and economic benefits to the area.  However, it was concluded that these benefits were not so significant to justify the lawful interference with the Human Rights of those objecting to the Order.  This was largely based on the conclusion that existing leaseholders, without investing significant savings or taking out new mortgages, would not be able to afford to relocate into new properties provided by the redevelopment and therefore forced to move away from their local community.  He also reached the conclusion that not enough effort had been made to acquire the outstanding interests by agreement.

gentThe decision raises some real issues for the CPO industry.  It paints an uncomfortable picture of CPO being a tool of gentrification, driving residents and small businesses out of their communities on account of rising land values and rents; the polar opposite of what a CPO is intended to achieve, which should be to improve and restore vitality to a local area.

It also creates a real tension with the current reforms to CPO compensation, which essentially seeks to ensure that those subject to compulsory acquisition should not gain any benefit from any enhanced value created by the regeneration scheme underlying a CPO.

It raises the question of whether Council’s should wrestle back control from developers when seeking to engage with those affected by CPO.  Most CPOs are developer-led and their surveyors will be at the fore of seeking to negotiate acquisition of land by agreement, albeit with a duty of care to the Council.  This possibly creates the wrong perception that there is a lack of engagement by the Council.  Greater visibility of the Council promoting the CPO and a genuine strategy to engage will be important.

Whilst the decision is, in some respects, a breath of fresh air that reminds us the impact CPO and redevelopment can have on individuals and local communities must be given more careful consideration together with a thorough review of solutions which can be put in place to maintain the identity of the local community.  One does have to question how genuinely balanced the decision was when the majority of existing residents had raised no objection, the scheme was set to deliver over 800 new residential units and other benefits; yet the CPO failed on the back of only 8 outstanding objections.

Southwark Council has announced they will be judicially reviewing the decision; a sensible move given its ramifications.

Planning TV – Spotlight on Planning in London

Planning TV - LOGO PURPLE BACKGROUND

Dentons Planning TV is a new and innovative platform for engaging in and reacting to the latest developments in the dynamic world of planning. Its mission statement is simple: to provoke debate and facilitate engagement at all levels in the planning process.

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In this episode of Planning TV, Michael Lowndes (Executive Director at Turleys) joins Jamie Mckie to discuss planning challenges in London.

Planning TV – Spotlight on Section 106 Review Mechanisms

Planning TV - LOGO PURPLE BACKGROUND

Dentons Planning TV is a new and innovative platform for engaging in and reacting to the latest developments in the dynamic world of planning. Its mission statement is simple: to provoke debate and facilitate engagement at all levels in the planning process.

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In this episode of Planning TV, we briefly explain Section 106 review mechanisms.

Simply the best? A review of what ‘best consideration’ means in practice and how it is affecting the property market

In a world of increasing devolution and local responsibility, local authorities still need ministerial consent to dispose of land at less than best consideration. Why is this the case, and what does this mean in practice?

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This article was first published in Property Law Journal (September 2016) and is also available at http://www.lawjournals.co.uk/

High Court clarifies application of presumption in favour in heritage harm case

high courtThe High Court has provided further guidance on the application of the presumption in favour of sustainable development (paragraph 14 of the NPPF) in Forest of Dean District Council v Secretary of State for Communities and Local Government & Another [2016] EWHC 421 (Admin). The case is helpful for authorities resisting appeals where there is an absence of five year housing land supply.

Permission was granted on appeal for a housing scheme in the absence of a five year housing land supply (HLS). The Inspector applied NPPF49 (which engages the NPPF14 presumption in the absence of a 5 year HLS). The presumption recommends approval where there is no 5 year HLS, unless “the adverse impact of doing so would significantly and demonstrably outweigh the benefits, … or specific policies in the NPPF indicate that development should be restricted.” That includes where the plan has only recently been adopted (Woodcock Holdings Limited v Secretary of State for Communities and Local Government and Anor [2015] EWHC 1173 (Admin)).  NPPF126 to 134 provide specific policies on designated heritage assets.  NPPF134 requires less than substantial harm “to be weighed against the public benefits of the proposal…“.

The scheme was acknowledged to cause ‘less than substantial’ harm to the character and appearance of a nearby Grade II listed farmhouse. The Inspector treated that harm as outweighed by the overall public benefits. The authority’s grounds of challenge under section 288 of the Town and Country Planning Act 1990 included that he had wrongly applied the presumption, by failing to treat NPPF134 as a policy indicating that development ‘should be restricted’.

Coulson J held that NPPF134 is a policy “restricting development” (despite the fact that it does not contain a restriction), interpreting that phrase broadly.  With the presumption disengaged, an “unweighted” cost-benefit balancing exercise must be undertaken.

The finding of harm (regardless of whether it is “substantial” for NPPF purposes) gives rise to a statutory, albeit rebuttable, presumption against the grant of consent (South Lakeland District Council v Secretary of State for the Environment and Another [1992] 2 AC 141) being outweighed by material considerations. Applying the first, weighted, limb on its own meant that it was likely that the wider statutory presumption of refusal where there is any harm to designated heritage assets had been lost.

There is likely to be a broadening of the search for ‘restrictive’ policies in defending refusals. That said, where the decision taker has concluded that there is inadequate HLS and the overarching legal hurdle to approving less than substantial harm has been cleared, it should ultimately make little difference to the outcome.