The perils of Pilkington – when is a planning permission no longer capable of implementation?

This was the question considered in Hillside Parks Ltd v Snowdonia National Park Authority [2020] EWCA Civ 1440 where the Court of Appeal held that implementation of a masterplan pursuant to a 1967 permission was no longer possible due to developments carried out under later permissions. This decision is particularly relevant to developers of complex multi-phase developments – the Court has confirmed that planning permissions should be construed holistically, that it is unlikely that modern planning permissions could be interpreted as a “series of independent acts”, and that therefore caution should be exercised with overlapping planning permissions. Also, this may not be the end of the story as regards the legal status of works undertaken under a permission which conflicts with a later, inconsistent permission. What are the implications of this judgment, and are there arguments for future reform?

The facts

Hillside concerned the development of a large housing site in the Snowdonia National Park. Planning permission was initially granted in 1967 for 401 dwellings based on a masterplan. The masterplan was subsequently “varied” several times by the grant of subsequent planning permissions but, despite development having been carried out pursuant to the subsequent permissions, in 1987 the High Court held that: the original 1967 permission had in fact been implemented and remained lawful; and that therefore the original development authorised by it could be completed at any time. The 1967 permission was thereafter varied a number of times and further standalone planning permission were also granted for additional building work within the masterplan area.

By 2017 the local planning authority contacted the landowner to say that, in its view, the 1967 permission could no longer be implemented because the developments carried out in accordance with the later planning permissions rendered it impossible to implement the original masterplan. All works at the site were therefore required to be stopped until the planning situation had been regularised.

The decision

At first instance, the High Court held that, owing to further development since 1987, development under the 1967 masterplan was now physically impossible (eg because roads had been built on areas shown as housing on the 1967 masterplan, etc). On appeal against the High Court’s decision, the Court of Appeal had to consider several questions including whether:

  1. the High Court’s 1987 decision that the development could still be completed under the original 1967 planning permission was still binding;
  2. the local planning authority could not now argue that the 1967 permission was not valid because it had accepted up until 2017 that the 1967 permission could be implemented; and
  3. that the “Lucas exception” applied, which stems from a 1964 case (F Lucas & Sons Ltd v Dorking and Horley Rural DC [1964] 5 WLUK 27) which held that permission for a particular development was to be regarded as permission for the development to be carried out as a “series of independent acts”.

The Court of Appeal confirmed that the 1987 High Court decision was not now binding as works under permissions granted since 1987 had rendered development under the 1967 masterplan impossible. For the same reason, it was open to the local authority now to argue that the 1967 permission was no longer valid. The Court of Appeal also confirmed that, whilst it is possible that a particular planning permission might could grant permission for a development to take place in a “series of independent acts”, this was unlikely to be the way that a modern planning permission would be construed.

The consequences

This case confirms the general doctrine established by Pilkington v Secretary of State for the Environment and Others [1973] 1 WLR 1527 CA and subsequent cases (the “Pilkington doctrine”), namely that, whilst a landowner can make multiple planning applications for the same piece of land which may be inconsistent with each other, once one of those permissions has been implemented, and development has been carried out which makes it impossible to achieve development under another permission over the same piece of land, that other permission is no longer valid. Whilst not actually overruling Lucas, the Court of Appeal held that the case should be regarded as “having been decided on its own facts”, meaning that it cannot reasonably be relied upon in relation to modern planning permissions for large masterplan developments. The Court of Appeal re-asserted that a developer cannot lawfully “pick and choose” different parts of a development to be implemented.

Hillside does not change the law, but it does represent yet another example of judicial assertion in the strongest terms that planning permissions must be construed holistically and that overlapping planning permissions for the same land should be approached with extreme caution. This makes life very difficult for developers who are building out complex multi-phase developments over many years and who, understandably, wish to amend their developments to reflect a changing market or specific tenant requirements. Combined with the recent Court of Appeal decision in Finney v Welsh Ministers [2019] EWCA Civ 1868, which prohibited the use of section 73 of the Town and Country Planning Act 1990 to vary a planning permission where that variation would be inconsistent with the description of development, many developers will be faced with the only option of re-applying for planning permission for the entire development. Given the scale of modern planning applications, this would clearly be disproportionate in the majority of cases.

The end?

What is particularly chilling about Singh LJ’s judgment in Hillside is that he left open the question of whether development which has already lawfully taken place in accordance with one planning permission would be rendered unlawful simply by virtue of the fact that subsequent operations take place pursuant to another permission which is inconsistent with the first. This would mean that, until a development is completed in full, landowners, investors and tenants would be at risk of the earlier phases of development being rendered unlawful as a result of subsequent development potentially outside their control. This would present enormous difficulties in the case of multi-phase masterplan projects in fragmented ownerships or where early phases are sold off to realise capital receipts to fund the later phases. Singh LJ recognised these as “potentially important questions” but said that he would prefer to express no view on them because they did not need to be decided in the appeal.

All of this highlights the very urgent need to reform section 73 of the Town and Country Planning Act 1990 in order to provide a full power to amend existing planning permissions. It is an oddity of the English planning code that this power does not exist and a succession of reforms have tried to address this through a make-do-and-mend approach that is plainly no longer fit for purpose. It is disappointing that this straightforward planning reform was not picked up in the government’s Planning White Paper, given that it would streamline the planning process for large projects, reduce bureaucracy for local planning authorities and help to unlock many developments that need to evolve to reflect changing demands. In the current market, where flexibility and adaptability will be essential to the success of development in a post-Covid economy (see here for our Future Cities research), this is something that the government should tackle urgently.

For more information please contact:

Matthew White

Matthew White
Partner and head of UK planning practice, London
+44 20 7466 2461

“The Future of the Planning System” v “Planning for the Future” – two important consultations closing this week

“Planning for the future”, the government’s Planning White Paper published on 6 August 2020 and on which the consultation closes this week (29 October 2020), has been widely publicised and analysed in depth by the development community. As we said in our blog earlier this month, given the impact of the White Paper’s proposals on development in the short and the long term, developers should respond to this consultation. However, another consultation on the planning system in England, which closes the following day, on 30 October 2020, hasn’t been so widely publicised. This latter consultation is a Call for Evidence by the Housing, Communities and Local Government Committee (HCLGC) for an inquiry into the government’s proposals for reforming the planning system. Although the Call for Evidence was only issued on 8 October 2020, developers should find it easy to respond to, because it asks questions that are prompted by the Planning White Paper consultation but not expressly dealt with by it.

What does the HCLGC consultation ask that the White Paper doesn’t?

The future of the planning system in England” inquiry is gathering evidence which, whether intentionally or otherwise, will test the Prime Minister’s statement in his Foreword to the White Paper that the planning system in England is “outdated and ineffective”, that it is “artificially constraining” England’s potential and, in particular, that it is the planning system’s fault that “we have nowhere near enough homes in the right places”. The inquiry also tackles the issue of the future of the green belt, on which the Planning White Paper is surprisingly silent. In my view, if the aims of the White Paper are to be achieved, particularly the urgent increase in supply of new homes, these are important questions, the answers to which should guide which proposals the government should take forward and how. From initial responses to the White Paper seen in the many discussions that have taken place on it, it seems as though others in the development industry agree. Perhaps the questions being put by the HCLGC inquiry should have been asked by the government before the White Paper was published. Ideally, MHCLG will wait to take account of the answers received before pressing on with their fundamental reforms.

Questions asked by the HCLGC Call for Evidence:

  • Is the current planning system working as it should do? What changes might need to be made? Are the Government’s proposals the right approach?
  • In seeking to build 300,000 homes a year, is the greatest obstacle the planning system or the subsequent build-out of properties with permission?
  • How can the planning system ensure that buildings are beautiful and fit for purpose?
  • What approach should be used to determine the housing need and requirement of a local authority?
  • What is the best approach to ensure public engagement in the planning system? What role should modern technology and data play in this?
  • How can the planning system ensure adequate and reasonable protection for areas and buildings of environmental, historical, and architectural importance?
  • What changes, if any, are needed to the green belt?
  • What progress has been made since the Committee’s 2018 report on capturing land value and how might the proposals improve outcomes? What further steps might also be needed?

For more information please contact:

Fiona Sawyer
Fiona Sawyer
Professional support lawyer, planning, London
+44 20 7466 2674

“Planning for the future” consultation closes shortly

Two months ago the government published “Planning for the future“, a Planning White Paper proposing the most radical changes to the English planning system since the Second World War. The proposals have been the subject of much debate across the development industry. With the consultation closing in just over three weeks, developers still have time to consider whether, and how, to respond to the consultation.

Should developers respond?

Developers often decide to leave it to industry bodies to respond to consultations on their behalf and many may choose this route for this consultation as well. However, for these proposals, developers may want to consider whether they should submit an independent response. This is not only because of the enormity of the proposals and the impact that they will have on development in the short as well as the long term, but also because, depending on how the proposals are ultimately implemented, there may be limited opportunity for further public consultation or scrutiny – this may be the one chance that developers have to voice their opinions or concerns about certain elements before they are put into effect. One only has to consider the recent example of how permitted development rights for upwards extensions and demolition of commercial properties for residential development were implemented to see how major change can be introduced through secondary legislation without prior Parliamentary scrutiny.

How should developers respond?

When deciding what to say in response to the consultation questions, many in the industry are sharing their opinions to help ensure that consultation responses are considered and instructive. We have taken our time to review the provisions in detail and have produced a briefing paper to provide an in-depth analysis of the practical implications for clients to inform any response they may have to the consultation. If you are interested in receiving a copy of this briefing, please contact us. We are also running a series of user-friendly and practical round table sessions on the White Paper for our clients.  If this would be of interest, please let us know.

For further information please contact:

Matthew White

Matthew White
Partner and head of UK planning practice, London
+44 20 7466 2461

Catherine Howard

Catherine Howard
Partner, planning, London
+44 20 7466 2858

Changes to the current planning system – Permissions in Principle

On 6 August 2020, alongside the Planning White Paper, the government launched a consultation called Changes to the current planning system. In our blog of 11 September 2020, we reported on one of the four proposals in the consultation, the new affordable housing product called First Homes. Here we focus on the proposal to extend the current Permission in Principle (PiP) to major development, discussing what PiP is, how it is already in use, and the potential implications of the proposals for developers.

What is PiP?

PiP was introduced in 2017 as an alternative route to obtain planning permission for “housing-led development”. “Changes to the current planning system” explains that PiP:

“give[s] up-front certainty that the fundamental principles of development are acceptable before developers need to work up detailed plans and commission technical studies. It also ensures that the principle of development only needs to be established once”.

There are two stages to obtaining full permission through the PiP route: the “permission in principle” stage establishes the principle of whether a site is suitable for housing led development; and the “technical details consent” stage then assesses the detail of the development proposals. PiP is also available to non-housing development provided that the majority of the floorspace in the scheme overall is housing and the non-housing development is compatible with the proposed residential development.

What types of development can currently be granted PiP?

Currently there are two routes for obtaining PiP: by submitting a valid application to the local planning authority (LPA); or through entry of a site in Part 2 of the LPA’s brownfield land register. PiP cannot be granted through either route for habitats development, householder development or EIA development. At the moment, PiP for “major” development can only be granted through entry of a site in Part 2 of the LPA’s brownfield land register, whereas PiP for other development on previously developed land can be granted PiP through the application route. “Major” development is development of 10 or more houses, or a building or buildings where the floor space to be created is 1,000 square metres or more, or on a site with an area of 1 or more hectares.

What are the proposed changes?

The government proposes to make PiP available to larger scale housing-led development by removing the major developments exception from the application route.

Why? The government points to town centre sites that are suitable for development and would support regeneration but, because they can be developed at a high density, could support more than 10 dwellings and are therefore not currently eligible for the PiP application route. A developer could apply for such a site to be listed on the LPA’s brownfield register, or could apply for full planning permission, but either option takes time and/or significant resources which can hold back development. The Planning White Paper proposes that land which is allocated for substantive development in local plans (identified as “Growth areas”) should be automatically granted outline planning permission. Acknowledging that these proposals will take time to implement, the government wants to implement these changes now.

Will this change really make a difference to the availability of PiP for major sites?

Perhaps not. The government itself says:

“We envisage that a change of this kind will particularly benefit small and medium-sized developers who tend to focus on building smaller major developments”.

This is because the existing prohibition on using PiP for habitats or EIA development will remain, which means that PiP still can’t be used for sites of 5 or more hectares or which will deliver more than 150 dwellings. Bearing in mind that PiP is available only for housing-led development, this may restrict its application even for mixed-use schemes. However, if a mixed-use scheme can qualify, it may benefit from another element of the government’s proposal which is to remove the current limit on the amount of commercial development that can be included (currently set at 1,000 sq m or 1 hectare). It may also benefit from the government’s proposal to reduce the fees payable for major site PiP applications to encourage development to come forward using this route.

What other changes are proposed?

The government is also considering whether to impose a maximum height threshold on major schemes consented through the PiP route, and whether to allow the use of social media to widen the publicity of major site applications.

The consultation closes on 1 October 2020. If you are interested in responding to the consultation and would like discuss this further, please get in touch.

For more information please contact:

Matthew White

Matthew White
Partner and head of UK planning practice, London
+44 20 7466 2461

Fiona Sawyer

Fiona Sawyer
Professional support lawyer, planning, London
+44 20 7466 2674

Changes to the current planning system – First Homes

It has been an ambition of successive governments that it should be easier for first-time buyers to get on to the property ladder. On 6 August 2020, alongside the Planning White Paper, the government launched a consultation called Changes to the current planning system, setting out four proposals including how the government proposes to secure an affordable housing product which achieves this ambition. This product is called “First Homes”. The government first consulted on the design and delivery of First Homes earlier this year. The current consultation seeks views on the government’s proposals for implementing the scheme.

The government wants to implement First Homes as part of the current planning system in England, but also wants to take it forward into the new planning system proposed by the White Paper. However, this is not the first affordable housing product aimed at first-time buyers – the Starter Homes initiative was launched by the Coalition Government in 2014 and progressed by subsequent governments but, despite significant investment (including a £1.2 billion Starter Homes Land Fund), regulations to implement the scheme were never taken forward and no Starter Homes were ever built (see here for the NAO report on its investigation into Starter Homes).

What is the difference between First Homes and Starter Homes, to what extent will developers be required to include First Homes as part of their affordable housing offer, and what are the next steps?

First Homes v Starter Homes

Table 1 summarises the main attributes of both First Homes and Starter Homes. The products bear many similarities: both are aimed at first-time buyers with a mortgage who earn less than £90,000 in London and £80,000 in the rest of England; both are subject to a minimum discount below market value and an overall price cap; and both are available to Armed Forces personnel.

However, there are differences. To put it very simply, the government has beefed-up the Starter Homes offer significantly. First Homes must be offered at a greater discount below market value, in perpetuity. There is also a compulsory requirement – a minimum of 25% of all affordable housing units secured through section 106 obligations must be First Homes, whether on-site, through cash in-lieu or as a combination of the two. First Homes must take priority over other affordable housing products. There may be an exemption for Build to Rent schemes, and also an exemption from CIL (once regulations have been implemented), but otherwise all schemes delivering affordable housing through section 106 obligations will be affected. This will have a major impact on the range of affordable housing tenures provided by developers and particularly on the provision of social housing and other affordable rented products.

Another significant difference between Starter Homes and First Homes is the “local connection” requirement for First Homes buyers. The Starter Home requirement that a first-time buyer must be under 40 has gone, but local planning authorities can require that developers must market First Homes to local buyers only (with the exception of Armed Forces personnel) for three months before the units can be sold to first-time buyers outwith the local area.

Table 1: Comparison between First Homes and Starter Homes

Next steps

The government intends to implement First Homes through changes to national policy and by producing standardised wording for section 106 agreements. However, as it wants consistent implementation by local authorities across England, it acknowledges that primary legislation may be necessary, which will presumably be achieved through the Planning White Paper reforms. These reforms certainly include the “significant reforms to developer contributions” that the consultation refers to as another next step – the Planning White Paper proposes to replace both CIL and section 106 affordable housing contributions with a new Infrastructure Levy – although if First Homes are implemented before this then changes to the CIL Regulations 2010 will be needed to introduce the promised exemption for First Homes from CIL.

The principle that developers will have to provide First Homes seems established, albeit that the same had been said for Starter Homes. Developers do, however, still have an opportunity to comment on the following aspects of the First Homes policy by responding to the Changes to the current planning system consultation:

  • how the remaining 75% of affordable housing on a site should be delivered (after the first 25% has been delivered as First Homes);
  • what exemptions (if any) there should be from the requirement to provide First Homes (eg Build to Rent exemption);
  • transitional arrangements for local and neighbourhood plans already well advanced through the plan-making process, and for applications that are well progressed on the basis of a different affordable housing tenure mix;
  • the level of discount below market value; and
  • views on exception sites and rural exception sites.

The consultation closes on 1 October 2020.

For further information please contact:

Matthew White

Matthew White
Partner and head of UK planning practice, London
+44 20 7466 2461

Fiona Sawyer

Fiona Sawyer
Professional support lawyer, planning, London
+44 20 7466 2674

The Planning White Paper – Planning to use PropTech properly

Technological improvements in the planning system are long overdue. Technology has advanced significantly since the Town and Country Planning Act was first introduced, which begs the question: why is the planning system so outdated when it comes to obtaining planning permission?

This is a point taken up by “Planning for the future“, the Planning White Paper published on 6 August 2020, which notes that:

“The planning system is based on 20th century technology: planning systems are reliant on legacy software that burden the sector with repetitive tasks”

We have seen a seismic shift towards the use of technology in the planning system as a result of the Covid-19 pandemic, with a number of planning appeals and development consent order inquiries set to be fully virtual. It is clear that the government wants to keep up this momentum. How does it propose to achieve this?

The White Paper refers to local plans needing to be “visual and map-based, standardised, based on the latest digital technology and supported by a new standard template”. It goes on to say that the planning process would be increasingly digitised, moving from “a process based on documents to a process driven by data”. Local planning authorities would be helped to use digital tools to support “a new civic engagement process for local plans and decision-making”. This would certainly assist councils in fulfilling their plan making and consultation responsibilities, but would it really benefit developers in the same way?

The Prime Minister’s Foreward starts by saying let’s “tear it down and start again”, but when you consider how far technology has come and the advances made in other industries, the proposals in the White Paper are not really that radical. The vision is there, but the White Paper does not mention any ground-breaking technologies. In fact, “interactive maps technologies” have been in existence for a number of years and the UK has a long way to go if it is to achieve the goal of becoming a “world-leader in digital planning”.

It might be hard to imagine a planning system which is fully automated and of course, we don’t want planning permission to become a complete tick-box exercise, but with the right technology a lot of issues could be flushed out in advance and the process for obtaining planning permission could be made much simpler and quicker. Take for example digital twin technology, which creates virtual replicas of buildings, infrastructure and physical assets, and builds interactive 3D city models that pull together vast amounts of interactive data. This sort of technology has the ability to help predict and visualise outcomes and could transform the planning process. Similarly, smart phone technology has the potential to revolutionise public involvement and make the system much more accessible and efficient.

The good news is that the White Paper does refer to 3D visualisation technologies and it recognises the need to build new technology to help improve citizen engagement and planning processes. It also suggests that routine tasks could be automated and refers to machine-readable plans that could automatically screen developments to identify where they align with policies and/or codes. The government is also promising to engage with the UK PropTech sector through the PropTech Innovation Council (announced in November 2019) to make the most of innovative new approaches in technology.

Don’t worry though – all this technology isn’t necessarily intended to replace humans. After all, planning for beautiful and sustainable places (Pillar Two of the White Paper) requires some degree of human judgement!

For further information, please contact:

Lisa Bazalo

Lisa Bazalo
Senior Associate (New Zealand), planning, London
+44 20 7466 2957