Planning reform – more holes in bigger cheese?

I read an article recently which told the story of an Oxford philosopher who spent a long evening with colleagues furiously debating the meaning of life. After eventually collapsing into bed, he awoke in the middle of the night with a brilliant thought. He scribbled it down on a pad beside the bed and went back to sleep. In the morning, he looked down at his notepad. It said “more holes in bigger cheese.”

After reading the Government’s announcement yesterday of what it describes as “the most radical reforms to our planning system since the Second World War”, I couldn’t help but think of this story. The reforms certainly seem moderately useful. But transformational they are not. We’ve been here before. It’s more holes in bigger cheese.

Anyone with the pleasure of familiarity with Part III of the Town and Country Planning Act will know that there are pages and pages containing manifestations of what successive governments have proposed as the one shot solution to all of our planning problems. Local development orders. Neighbourhood development orders. Special development zones. Simplified planning zones. Having been proposed with fanfare, these provisions sit like sad relics in the Act, a reminder of what happens when policies that sound good in theory collide with the interminable gears of our planning system. These ideas were no doubt useful in delivering certain schemes in particular circumstances. But they didn’t realise the aim that we all want: a planning system which is robust enough to require projects which are good for the economy, health and the environment, but which does not present so many obstacles in terms of time and money that developers either give up or do not try in the first place.

So what do we do? Russell Harris QC of Landmark Chambers has written compellingly in recent weeks (see here) arguing for what he describes as a “21st century New Deal” (the Prime Minister is obviously a fellow reader). My thoughts are more modest and amount to the same advice that my Dad gives his football team every weekend: let’s get the fundamentals right. How about operating the system that we do have efficiently and well?

The Prime Minister said yesterday that “Time is money. And the newt-counting delays in our system are a massive drag on the productivity and prosperity of this country.” The Prime Minister is, of course, right about delay. But it is not the “newt-counting” (whether literal or metaphorical) that is the ultimate source. Environmental impact assessment has moved on from the days of submitting reams of irrelevant chapters, and towards a slimmed down assessment which addresses only those topics which are relevant to the particular development. In London those chapters will be things like wind, transport, air quality, daylight/sunlight, socio-economic factors- that is, all of the areas that a developer needs to assess anyway, EIA or not. To take the Prime Minister’s direct example: the need to assess newts only arises if the development is likely to have a significant impact on newts or their habitats. And even if the Government abolished the EIA regulations tomorrow, the impact of a development on a protected species would be a material consideration that a court could not allow a planning authority to ignore.

So what is the cause of this delay, if not newts? In my experience, it is mostly a cumulation of a series of fairly prosaic occurrences. Let’s take a few examples. It often takes months to schedule a pre-application meeting with a planning authority and then a further wait (again, months) for comments — only for the process to repeat itself (often several times) if the scheme changes (however slightly) in response to those comments. Consultees (internal and external) fail to engage with the process and need to be chased by the planning officer. Council meetings are booked up months in advance and if the allotted slot is missed for any reason, then it’s a bit like missing a slot at Heathrow and you’re at the back of the queue. And for an appeal (in normal times), a developer will often be waiting six weeks just to have a scheme registered in the system.

These small inefficiencies (of which the above are just examples) all add up to make a very large inefficiency which leaves good projects languishing in the system for years. What is needed to correct them is, mostly, resources. There should be enough planning officers to assess schemes with the diligence and speed that such a critical aspect of our economy and society deserves. Council meetings should be held every week if that is what is required to deal with all of the schemes under consideration in a reasonable way. More planning lawyers to progress section 106 agreements, more Inspectors with more specialist experience. In my view, this would be far more transformational to the way that schemes move through the system than the reforms announced today.

Let’s get the fundamentals right. Otherwise we’re just nibbling around the edges.

Annika Holden is currently on maternity leave.

For more information please contact:

Annika Holden
Annika Holden
Senior associate (Australia), planning, London
+44 20 7466 2882
Matthew White
Matthew White
Partner and head of UK planning practice, London
+44 20 7466 2461

Ring in the new? – planning update

In Planning for Housing, published in Real Estate. Reconsidered last month, we took a look at ongoing Government initiatives designed to tackle the housing crisis, and also the problems faced by high streets and town centres. Throughout we noted that whether and how various initiatives would be progressed depended on the result of the General Election. Now that we have a Conservative majority in Parliament, and understand the new Government’s priorities through their election manifesto (see our blog post of 27 November 2019) and the Queen’s Speech of 19 December 2019 (and the accompanying Background Briefing Notes), we have a clearer idea of what to expect in planning over the coming months. On the whole, it seems to be a case of progressing with initiatives already announced (although not necessarily widely publicised) with continued focus on housing, the environment and thriving centres. Here is a brief overview:

Planning reform

The Government has confirmed its continued intention to publish a Planning Green Paper, with the aim of making the planning process “clearer, more accessible and more certain for all users … also address[ing] resourcing and performance in Planning Departments”. Arguably a familiar objective for successive administrations, achieving these goals has proved difficult. There is relatively little more information on the detail of what the Green Paper will contain, although it may include CPO reform. We expect publication in the next few months.

Environment Bill

In our blog post of 11 November 2019 we reported on the Environment Bill 2019-2020, abandoned following the dissolution of Parliament prior to the General Election. The Government has confirmed that the Bill will be reintroduced largely in similar terms, including provisions on mandatory biodiversity net gain (see Mandatory Biodiversity Net Gain in Real Estate. Reconsidered), tightened air quality controls and the establishment of the Office for Environmental Protection (OEP). With environmental protection a high priority for the Government, this should be expected soon.

Housing

Housing need, affordable housing, Starter Homes and “First Homes”

Continuing the drive of previous governments towards increasing housing supply, the Government is committed to building at least a million new homes this Parliament with hundreds of thousands of new homes promised through renewal of the Affordable Homes Programme.

The previous Government promised that regulations to implement the statutory framework for Starter Homes introduced by the Housing and Planning Act 2016 would be introduced in 2019, and that regulations to exempt Starter Homes from the Community Infrastructure Levy (CIL) would be laid before Parliament. Recent announcements have been silent on whether the Government plans to continue with this, although we can expect that they will. However, the Government has announced another affordable homes initiative, “First Homes”, on which they will consult shortly. First Homes is intended to “provide homes for local people and key workers at a discount of at least 30 per cent”, funded by developers and secured through a covenant with the discount secured for perpetuity. The Government also intends to introduce “a new, reformed Shared Ownership model” to help shared owners buy more, and eventually all, of their property.

Also worth mentioning is that the Housing Delivery Test for November 2019 is still awaited, as is a promised review of the standard method for calculating housing need. These were due before the end of last year, so should be expected soon.

Permitted development and Future Homes Standard

Towards the end of 2019, the previous Government confirmed that it intended to introduce permitted development (PD) rights enabling upwards extensions of certain buildings in existing commercial and residential use to deliver new homes, and to allow the demolition of commercial buildings for rebuilding as residential units. There seems to be no reason not to expect secondary legislation implementing this to be published for consultation soon, in which case the promised review of residential PD rights “in respect of the quality standard of homes delivered”, announced in March 2019 in response to valid concerns regarding the design and quality of housing delivered pursuant to PD rights, may also be delivered.

To deal with concerns over PD rights the previous Government also intended to “develop a ‘Future Homes Standard’ for all new homes with a view, subject to consultation, to introducing the standard by 2025”. We wait to see whether this will be delivered.

Diversification guidance

Alongside the 2019 Spring Statement the previous Government promised additional planning guidance to encourage the diversification of large sites to encourage quicker build out rates, in response to findings of the Independent Review of Build Out Rates led by Oliver Letwin. It is not yet clear whether the current Government intends to pursue this.

Design

The final report of the Building Better, Building Beautiful Commission (BBBBC) was due to be published last month (see our blog post of 12 July 2019 on the BBBBC interim report). The previous Government committed to consult on a new “National Model Design Code” which would take the final report into account. We can probably still expect this consultation once the report is published.

Infrastructure

The Government has announced a £10bn Single Housing Infrastructure Fund to provide the infrastructure necessary to support residential development, building on previous infrastructure funding. Bearing in mind the Government’s manifesto commitment that infrastructure must be delivered ahead of new housing developments being occupied, which could impact viability, it will be interesting to see more detail on how this will be implemented.

Also, in its election manifesto the Conservative Party promised a £100 billion investment into infrastructure such as roads and rail, Northern Powerhouse Rail and the restoration of many of the Beeching lines. The Government has confirmed that it will publish the National Infrastructure Strategy (NIS) alongside the Spring Budget on 11 March 2020, together with its long overdue response to the National Infrastructure Commission’s National Infrastructure Assessment (due by July 2019), and that legislation to implement the NIS will be introduced “in due course”.

Devolution

The Conservative election manifesto proposed an English Devolution White Paper in 2020. Interestingly, this was not mentioned in the Queen’s Speech or the Background Briefing Notes. However, in a speech to the Local Government Association on 7 January 2020, Local Government Minister Luke Hall confirmed that the Government will “publish an ‘English devolution white paper’, aiming for full devolution, so that every part of the country has the power to shape its own future”. We wait to see when this will be brought forward and what “full devolution” will mean in practice. How the combination of devolution and infrastructure investment may impact development on a regional basis is worthy of further consideration.

Conclusion

All in all, rather than ringing in change the new Government seems to be on track to continue progress with the aims and initiatives of preceding administrations, with the exception perhaps of English devolution which has the potential to see a significant shift of influence from central to local government. It will be interesting to see how the various initiatives play out, and whether they bring the desired results.

For further information please contact:

Fiona Sawyer
Fiona Sawyer
Professional support lawyer, planning, London
+44 20 7466 2674
Matthew White
Matthew White
Partner and Head of UK planning, London
+44 20 7466 2461

“Land for the Many” – potential future land reform under a Labour government

A report commissioned for the Labour Party entitled “Land for the Many” has been published, proposing radical changes to the way that land is used and controlled in the United Kingdom. It makes many recommendations which are described as “proposals to the Labour Party” to consider as part of its policy development process in advance of the next general election. The Labour Party’s response to the report is awaited. Given the current state of the political landscape in the UK, and with a general election potentially in the offing, it will be interesting to all those with an interest in UK property, be it as an investor, developer or property owner, to see how many of these ideas gain momentum over the coming months.

Included in the proposals are:

Transparency: free and open access to information on who owns land will be required, including the identity of beneficial owners. Specific measures include a public register of charges and options over land titles, public databases of the prices paid for all property and of public subsidies paid on land and a full register of planning permissions, including developers’ commitments. The report calls for the Land Registry and the Ordnance Survey to become executive agencies of government.

Stabilisation of house and land prices to discourage land and housing being treated as financial assets: measures proposed to achieve this include an ambitious social house building programme, major reforms of the private rented sector (eg a cap on annual permissible rent increases, limited grounds for eviction within the first three years of a tenancy, increased eviction notice periods and a national register of landlords) and encouragement of a shift in bank lending away from real estate towards more strategically useful sectors of the economy.

The creation of a Common Ground Trust is proposed as a publicly-backed but independent non-profit institution which would buy the land beneath houses and lease it to members. It would act as a vehicle for bringing land into common ownership by creating a mechanism for the gradual, voluntary, but potentially large scale, transfer of land.

Tax reform: a shake-up of many of the taxes considered by the report to be inadequate, regressive and economically inefficient such as council tax (the suggested replacement is a progressive property tax payable by owners and including vacant and derelict residential land), SDLT (phased out for those buying homes to live in themselves), CGT (increased for second homes and investment properties), business rates (replaced with a Land Value Tax) and inheritance tax (abolished and replaced with a lifetime gifts tax). The taxation of offshore owners would be extended.

Increased involvement of local authorities and the community in development plans and proposals: Public Development Corporations should be the prime movers in the land market. Community-led development and ownership of land should be promoted, including Community-Led Housing (“CLH”) as a means of taking land into permanent community ownership, the introduction of a new “Community Right to Buy”, and the creation of powers to assign sites of potential community value to a new “Community Ownership” use class, which would have development rights. The sale of public land should end, and local authorities should have an increased role in site assembly and preparation.

Other potential reforms to the planning system are proposed including reforms to compulsory purchase legislation to allow public authorities to acquire land at near use value and use new Compulsory Sale Orders (“CSOs”) to direct that land be sold by public auction to the highest bidder. Office to residential permitted development rights should be removed and a new D3 (public realm) Use Class, granting rights of access for civic and cultural purposes, should be a requirement for all new developments incorporating open space (this would be alongside a new urban right to roam).

We will continue to monitor any further developments, but if you would like any more detail on the contents of the report now, please contact us.

Authors: Jane McMenemy, Kate Wilson and Fiona Sawyer, professional support lawyers, real estate and planning, London

For further information please contact:

Jeremy Walden
Jeremy Walden
Partner and head of UK and EMEA real estate practice, London
+44 20 7466 2198
Matthew White
Matthew White
Partner and head of UK planning practice, London
+44 20 7466 2461

Changes confirmed to permitted development rights and use classes

In our blog post of 10 December 2018 (see here), we discussed the potential impact on developers and landlords of changes to permitted development (PD) rights and Use Class A which were being consulted on by the government. Despite widespread criticism, and counter to some calls for a greater role for local authorities in securing the futures of their town centres through holistic town planning, in a Written Statement on 13 March 2019 James Brokenshire announced that the government is implementing the majority of the proposals. Some of the changes to PD rights are to be made later this spring; other changes, such as upward extensions for residential use, will be dealt with in further regulations in the autumn. We were also told that we can expect an Accelerated Planning Green Paper later this year. Whilst the changes are intended to “[simplify and speed up] the planning system, to support the high street, make effective use of land and deliver more homes”, whether this can be achieved by these changes remains to be seen. This post discusses what the changes are, and what their impact could be within the context of wider change. Continue reading

Proposed changes to permitted development rights and use classes – impact on developers and landlords

Two key themes of the Budget on 29 October 2018 were increasing the supply of housing and improving the health of high streets and town centres. Published with the Budget was the consultation ‘Planning reform: supporting the high street and increasing the delivery of new homes’. Also announced was the government’s ‘Open Doors’ project, aiming to help improve the vitality of town centres by facilitating meanwhile use of vacant units. The ‘Planning reform’ consultation closes on 14 January 2019. A call for applications from landlords who wish to pilot the Open Doors project closes on 31 December 2018. We have prepared a briefing for clients, summarising key proposals that will be of interest to retail landlords, developers and advisers and assessing how these might impact new or existing developments and the lettings of these assets.

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