News Type: Legislation Update

The Government has announced its intention to introduce a Planning Bill which will build upon last year’s White Paper publication and subsequent consultations.

In August 2020, the Government set out proposed reforms to the planning system within a White Paper entitled ‘Planning for the Future’. The paper sought to address issues including:

-too few homes being built;

-only a minority of local authorities having up-to-date local plans in place; and

-very little meaningful engagement with the planning system.

In the words of Robert Jenrick, Secretary of State for Housing, Communities and Local Government, the reforms aim to deliver a ‘significantly simpler, faster and more predictable system’ (see our previous post on this here: https://www.firstplan.co.uk/news/planning-for-the-future-changes-to-the-current-planning-system-consultations/ ).

The reforms included:

-a proposed move to a ‘zonal’ system to facilitate new development;

-streamlining the consultation process for non-strategic planning;

-shortening of the local plan preparation process;

-abolition of the Duty to Cooperate; and

-standardising a method for calculating housing requirements.

Following the release of the White Paper, the Government has faced criticism in respect of the need for greater detail about how the proposed reforms would work.

In October last year, 14 London planning authorities submitted an open letter to the Government, in which they branded the document as ‘unworkable’ and ‘a threat to local democracy’.  For instance, with regards to focussing consultation on strategic planning, the authorities alleged that this would offer landowners and developers a ‘fast-tracked route’ to planning consent, but at a cost to local communities. They said: ‘we should be putting communities at the heart of place making, increasing the resources of our planning system and strengthening local democracy’.

Despite the Queen’s Speech in May confirming the Government’s determination to push ahead with the full package of reforms, the House of Commons Housing, Communities and Local Government (HCLG) Select Committee have recently published findings of their examination into how well they would support the Government’s wider building strategy. This includes its target to build 300,000 new home a year and ensuring ‘high quality development’, as well as how new proposals would protect existing buildings or localities and how well it provides mechanisms for local engagement in the planning system (‘The Future of the Planning System in England’ report).

Findings include the assertion that the proposed zoning system may not necessarily be quicker, cheaper or more democratic.  Whilst supportive of the introduction of a statutory obligation that requires all local authorities to have a local plan, and a timeframe for delivering them, the report raises concerns that 30-months would not be practical or sufficient to ensure effective consultation and cooperation, particularly between local authorities. In this regard the report states that further details should be provided concerning the proposed removal of the Duty to Cooperate. Growth and renewal areas should be guided by detailed plans which include key details such as building heights and minimum parking standards. It also recommends that individuals must still be allowed to comment on individual planning applications, and not just local plans.

With regards to plans to expand the use of digital technology, this is welcomed and it is also recommended that virtual planning meetings should be retained in addition to the retention of traditional methods of decision making.

Three key points were made in respect of housing numbers and delivery:

-that the evidence base behind the Government’s target of 300,000 new dwellings a year should be published;

-that time limits are set on the commencement of developments, with potential financial penalties, should this not be achieved; and

-that additional information is needed in respect of the housing formula announced by the Government in December 2020.

After proposing the replacement of the current Section 106 and Community Infrastructure Levy with a national infrastructure levy, the Committee finds that there is a case for replacing the latter but not the former, citing that Section 106 Agreements should continue to protect against a possible loss of affordable housing.

Based on the feedback and the remaining unanswered questions, we expect to see notable changes to the planning White Paper later this year as it progresses into legislation and we will continue to monitor this closely.  The Firstplan team are happy to discuss any questions you may have regarding the changes.

Following the shakeup of the use class system in September 2020 (Changes to the Use Classes Order come into force – Firstplan) the Ministry for Housing, Communities and Local Government (MHCLG) has recently carried out a consultation on the proposed changes to the Town and Country Planning (General Permitted Development) Order to reflect the new changes that will take effect when the grace period for the previous Use Classes Order ceases on 31 July 2021.

Whilst the proposed changes open doors for new opportunities through the prior approval process, notably allowing for the conversion of Class E uses to residential (Permitted Development Rights for Class E to Residential Given the Green Light – Firstplan), the government does intend to revise a number of established permitted development rights to reflect the changes to the Use Classes Order.

Of note, one key change being proposed relates to Class I of the GPDO, which has until now allowed for the conversion of business premises from Class B2 (General industrial) / Class B8 (Storage and distribution) to Class B1 (c) (light industrial) and from Class B2 / B1 (c) to Class B8 without planning permission.

However, as a result of the changes to the Use Classes Order in September 2020 light industrial uses are now categorised under Class E (g) (iii), a use from which it is possible to convert a building into a range of retail and leisure uses without the need for planning permission. As such, rather than seeking revisions to the existing Order, MHCLG intend to remove the Class I right for the change of use from Classes B2 and B8 to Class E (g) (iii). Such a move would result in it now being necessary to apply for planning permission to convert existing warehouse units for industrial purposes, including in industrial estate locations.

Should you wish to discuss how this change, or indeed any of the recent changes, to the permitted development rights may affect you, please feel free to contact a member of the Firstplan team.

In response to the pandemic, in March 2020 Parliament passed the Coronavirus Act 2020; Section 78 of this legislation allowed regulations to be implemented in order to make provisions for, inter alia, virtual local authority meetings via the Local Authorities and Police and Crime Panels (Coronavirus) Regulations 2020 which came into force on the 4th April 2020 and has now recently expired on Thursday 6th May 2021.

From 7th May 2021 Planning Committees can no longer be held online.

The temporary provision has proved crucial in keeping the wheels turning in the planning system during these uncertain times and has also led to technological advancements that otherwise would not have taken place.  Significant cost reductions have been reported, as have increased and more diverse participation levels, a key goal of planning.  The reduced need to travel in conjunction with flexible working arrangements is no doubt another benefit industry professionals are reluctant to lose.  Commentators have, therefore, been highly vocal about not wanting to relinquish these benefits and, importantly, not wanting to slow down the decision-making process within the context of the economic recovery, of which the development industry will play a crucial part.

Nevertheless, despite efforts made by the Local Government Association to highlight the plethora of benefits and to explicitly ask that this flexibility is continued, the Local Government Minister wrote to council leaders on 25th March to warn that the flexibility would be ending soon and that councils should start preparing for in-person meetings, referencing progress made with the vaccine rollout alongside a decline in cases as significantly reducing the risk.

Consequently, local government bodies including the Association of Democratic Services Officers (ADSO), Lawyers in Local Government (LLG) and Hertfordshire County Council brought the legal challenge, endorsed by the Secretary of State, which sought to affirm that the existing legislation (schedule 12 to the Local Government Act 1972) would allow for virtual or hybrid meetings.  Nevertheless, despite the judge acknowledging that local authorities have made ‘extensive use’ of the power to hold remote meetings, the judicial review was dismissed on 28th April whereby it was held that the 1972 legislation stipulates that “meetings must take place at a single, specified geographical location; attending a meeting at such a location means physically going to it; and being “present” at such a meeting involves physical presence at that location”.  The High Court further ruled that extending this flexibility requires primary legislation.  However, according to the Local Government Minister, emergency legislation is not feasible at present, yet the High Court asserted that Parliament should decipher such decisions and not the courts.

In this respect, until 21st June, the date on which all restrictions may be lifted, local authorities are now left in a difficult situation in terms of finding suitable locations which will accommodate social distancing measures.  Government guidance has discussed additional options for this interim period equating to delegating decision making to key individuals alongside reducing the number of meetings.  However, this could reduce democracy and inevitably lead to delays.  Numerous industry representatives have been highly critical of this ‘retrograde’ outcome and have warned of a potential hiatus whereby councils may be likely to postpone most decisions until circumstances are clearer at the end of June.  Conversely, others have welcomed the return to previous operations, arguing that in-person communication is key for local cohesion, particularly between councillors.

There is, however, a move towards hybrid forms of democracy; notwithstanding this legal outcome, the government is currently consulting on the ‘Call for Evidence’ until 17th June which seeks to collate widespread experience with remote meetings.  What is more, the notion of moving towards more hybrid forms of meeting in England was previously consulted by the government in November 2016 and the Government responded in 2019 to conclude that there would be clear benefits.  Indeed, the Lawyers in Local Government Group consulted its members in June of last year to gauge their inclination towards continued remote meetings, of which 88% were supportive.  The Planning Inspectorate announced last week that in order to maintain a smooth operation, it is expected that the majority of events will be held virtually for the remainder of the year, albeit the legislation in question for planning committees does not apply to Hearings, Inquiries or meetings held by the Inspectorate.  The Planning White Paper, published in August 2020, also proposed a move towards a more digital-approach to planning by increasing the use of technology to enhance engagement and improve the planning progress.  The move away from virtual planning committees would appear to be contrary to the spirit of the White Paper.

To this end, given the many difficulties endured over this last year, the benefits from enforced remote working must be built upon and one such way is the flexibility for hybrid forms of planning committee meetings.  The claimants are now focused on lobbying government to implement the requisite primary legislation which is regarded as essential in allowing local councils to have autonomy as to how to continue forward.  The RPTI have supported the case by emphasising that local democracy is an integral facet of the UK planning system and any effort to further this should be optimised.  Given the fact that specific Welsh and Scottish legislation had allowed for remote meetings since 2011 and 2003 respectively, England must surely follow suit and move towards a more hybrid model.

The Judicial Review decision is available at: https://www.bailii.org/ew/cases/EWHC/Admin/2021/1093.html

The Call for Evidence Consultation is available at: https://www.gov.uk/government/consultations/local-authority-remote-meetings-call-for-evidence/local-authority-remote-meetings-call-for-evidence

Further to the announcement one month prior, the Ministry for Housing, Communities and Local Government (MHCLG) has now cemented the flexibility on moveable structures with secondary legislation in England.

New Class BB “moveable structures for specified uses” enables the temporary provision of any moveable structure without planning permission within the curtilage, and for the purposes, of:

• A building operated under article 3(6)(p) such as a pub, wine bar or drinking establishment or (q) drinking establishment with expanded food provision;
• A building operated under Class E (b) for the sale of food and drink mostly undertaken on the premises; or
• Within a historic visitor attraction which is defined as a listed building accessible to the public for enjoyment and educational purposes.

The statutory instrument, laid before Parliament on 15th April, came into force the consecutive day on 16th April and is effective in England only until 1st January 2022.

In a letter dated 15th April, Robert Jenrick MP (Secretary of State for MHCLG) set out that to support businesses to open safely: “the government legislated to enable them to set up outdoor shelters and marquees without planning permissions”.

Guidance has also been published for how these structures can be set up safely and what conditions they need to meet to be considered “outdoors”.  For instance – in line with the existing rules for outdoor smoking areas – shelters, marquees and other structures erected by hospitality and other businesses can have a roof but need to have at least half of the area of their walls open at all times whilst in use.

Robert Jenrick has further encouraged local authority leaders to ensure that this guidance is applied proportionately and consistently to support businesses to reopen safely and to avoid overzealous interpretations of the rules.  He further notes that if a disproportionate regulatory approach is taken, it risks driving residents into unregulated activity and premises which may be far less covid-secure and/or illegal.

The Explanatory Memorandum accompanying the new legislation sets out that this measure does not remove the obligation to apply for listed building consent under the Planning (Listed Building and Conservation Area) Act 1990 where the provision of a moveable structure would require such an application.  Therefore, the provision of any moveable structure must not cause the alteration, demolition or extension of a listed building in any manner which would affect its character as a building of special architectural or historic interest.

The rights do not apply within the curtilage of a scheduled monument or if the moveable structure is for the display of an advertisement.  It is further unclear whether the permitted development rights are overruled by existing restrictive planning conditions that could apply to existing restaurants, bars and visitor attractions.

These measures are presented in conjunction with the roadmap for easing lockdown restrictions, first published in February.  This permitted development flexibility is intended as one such way to support the next stage by kickstarting the economy whilst operating within covid guidelines.

Ultimately, the provisions enabled via this latest legislative amendment will no doubt represent an incentive to many businesses across the country in terms enabling sheltered outdoor dining and drinking areas to be rolled out immediately without the traditional costs, time and other implications associated with a planning application.  It will likely be welcomed by hospitality operators big and small.

Should you wish to discuss these new permitted development rights, please don’t hesitate to contact a member of the Firstplan team.

Following consultation in December 2020, the Government has confirmed on 31 March 2021 that a new permitted development (PD) right to allow the change of use in England from any use, or mix of uses, from the Commercial, Business and Service use class (Class E) to residential use (Class C3) will be introduced under Class MA of the Town and Country Planning (General Permitted Development etc.) (England) Order 2021.

There has been a particular government focus on revitalising the high street of late, and the provision of homes continues to be a hot topic.  Housing Secretary Robert Jenrick said the measures, which will now be brought in much sooner than expected, “will help high streets to adapt and thrive”.  The government considers that the announced package of measures will help support the creation of much-needed homes while also giving high streets a new lease of life – removing eyesores, transforming unused buildings and making the most of brownfield land.

The new PD rights, which take effect on 1 August 2021, will allow unused commercial buildings to be granted permission for residential use via a fast track prior approval process.  Councils will only be able to assess prior approval applications on specific considerations including: flooding, noise from commercial premises and adequate light to habitable rooms.  Other site specific issues that Councils can take into consideration include: the impact of the loss of a health service and in conservation areas the impact of the loss of a ground floor Class E use.  The PD rights will apply in Conservation Area but not on other protected land designated as Article 2(3) such as Listed Buildings, National Parks or Areas Of Outstanding Natural Beauty.

The PD rights will include a vacancy requirement that will ensure the building changing use has been vacant for 3 months before the date of the application to protect successful businesses in existing use. The building must also have been in a commercial, business, or service use for at least two continuous years previously. A size limit of 1,500 square metres of floorspace will also apply, to avoid the loss of larger units. These limitations weren’t proposed by the government within the original December consultation.

The PD rights apply to all uses within Class E.  As a reminder, Class E covers a range of uses including retail, restaurants, professional services, offices, gyms, surgeries, nurseries and a host of other high street uses. This could greatly expand the range of premises granted a right to convert to residential, as compared with the existing limited office to residential PD rights.

The Government have made it very clear that where there are existing Article 4 directions as on 31 July 2021 in respect of the office to residential PD rights they will continue to be in effect on any equivalent development in respect of offices until 31 July 2022.

Jenrick said the moves will create “the most small business friendly planning system in the world” and “provide the flexibility needed for high streets to bounce back from the pandemic”.

The proposed package also introduces a new fast track process for the extension of public service buildings.  The new rules will allow for larger extensions to service buildings such as schools, universities and hospitals providing additional classroom and hospital spaces, as well as amendments of the existing permitted development rights for ports and the protection of unlisted statues, memorials and monuments.

The measures announced support a series of other measures previously announced by the government including relaxation of planning rules allowing pubs and restaurants to operate as takeaways, the erection of outdoor marquees, longer opening hours for retail units and temporary pavement licences.

If you have a query on the above new permitted development rights and the prior approval process, please contact one of the Firstplan team.

In conjunction with the UK’s recent departure from the EU, the government must produce and implement its own domestic environmental law.  The Environment Bill, first published in January 2020, delineates the government’s blueprint for environmental reform post Brexit and has been designed so as to strengthen local governance leadership to foster significant environmental improvements.  The Bill introduces a new legal framework in respect of air pollution, water quality and nature conservation.  Environmentalists have heralded this as a unique opportunity to tailor-make a system which better reflects the UK context.  However, industry commentators have warned that standards must not be lowered once ties with the EU are severed.  Accordingly, the notion of non-regression is central within the emerging legislation.

Progress on the Environment Bill has been somewhat delayed during the pandemic; as from Tuesday 26th January 2021 the Bill is at the Report Stage in the House of Commons.

We have summarised the main components of this emerging legislation below.

General duty to ‘enhance’ biodiversity

In the first instance, Part 6 and Schedule 14 pertain to regulating biodiversity and set out a general duty to ‘enhance’ biodiversity in England and Wales, thereby updating the Natural Environment and Rural Communities Act 2006 (Clause 93 (2)).  This duty would need to be evidenced through published reports.  As such, environmental considerations when determining applications will be heightened, with the current arrangement only stipulating that planning policies and decisions ‘should’ enhance the environment in terms of reducing adverse implications and providing net gains for biodiversity, as stated in the NPPF.

Biodiversity net gain as a pre-requisite

In relation to the sphere of planning, the central facet of the new system is the mandatory requirement for biodiversity net gain which is to become a condition of planning permission in England; the granting of planning permission would be premised on the understanding that the objective of biodiversity gain is fulfilled.  Of significance, the biodiversity net gain of any development would have to exceed the pre-development value by 10%, as measured by an updated biodiversity metric published by Defra.  To facilitate this mandatory requirement Schedule 14 of the Environment Bill will insert Section 90A into the Town and Country Planning Act 1990 with Schedule 7A ‘Biodiversity gain in England’.

Subsequently, ‘biodiversity gain plans’ will need to be approved by the Local Planning Authority (LPA).  The gain plans will be expected to denote the biodiversity merit of onsite habitats both prior to and after development, along with procedures to reduce adverse effects.  They must also confirm how gains would be obtained.  Biodiversity gains must be guaranteed for a period of at least 30 years. It is expected that the LPA would monitor this through planning obligations or conservation covenants.

This condition may be met at the time of granting planning permission, whereby the LPA simultaneously approves a biodiversity gain plan upfront, most likely within the context of straight-forward proposals.  Conversely, the developer will have to submit this requisite information afterwards; in this respect planning permission would depend on approval of this information by the LPA, akin to a pre-commencement planning condition.

Exceptions

Exceptions to this mandatory condition include schemes granted by a development order, or under section 293A (urgent Crown development), or development ‘of such other description as the Secretary of State may specify by regulations’.  Part 1 of the Bill includes a power to denote these exceptions in secondary legislation.  It is likely that permitted development schemes will be excluded, as will householder applications, minor commercial development, nationally significant infrastructure and marine schemes.  The extent to which brownfield sites will be exempted will also be outlined within secondary legislation.

Mitigation hierarchy and credits

What is more, a mitigation hierarchy will favour projects that do not necessitate mitigation as they do not undermine biodiversity.  Projects that include on and off-site mitigation procedures will then be preferred, with compensation measures considered last.  In relation to the last resort- in the event that developers are unable to provide the requisite on-site biodiversity gains they will be required to purchase credits by way of compensation.  It is understood that councils and landowners would be able to establish localised habitat compensation schemes, with the proviso that there would also be a central government supply of credits as a last option.  According to explanatory notes, the SoS will establish a system to sell a supply of statutory biodiversity credits and proceeds will be attributed to strategic ecological networks and long term environmental benefits.  Crucially, it is intended that the price of credits does not deter local development.  Surplus details on this matter are yet to be confirmed.

Local Nature Recovery Strategies

Another aspect of the Bill includes the requirement for councils to prepare and publish Local Nature Recovery Strategies in England; these tools are intended to allow for enhanced spatial planning for nature recovery via the setting of priorities and opportunities to protect and invest in nature on a localised scale.  A map of existing nature assets will stand to identify important opportunities for enhancement.  These tools will aid strategic planning in terms of housing applications and infrastructure projects.

Public biodiversity gains site register

Provisions for establishing a public biodiversity gains sites register are also included.  This register must be maintained for at least 30 years after the completion of enhancement works.  The register is designed to provide transparency in offsite enhancements for developers, planning authorities and others, and to confirm both that any offsite biodiversity gains are only allocated to a single development and that the requisite agreement to deliver biodiversity gains are in place.

Conservation Covenants

Part 7 of the Bill includes provisions to provide for Conservation Covenants: “voluntary, legally binding private agreements between landowners and responsible bodies, designated by the Secretary of State, which conserve the natural or heritage features of the land, enabling long-term conservation”.

Office for Environmental Protection

Also of note, the Bill creates a new environmental watchdog: The Office for Environmental Protection.  This body will be tasked with holding governments and public organisations to account in relation to environmental matters of concern.  The public body is designed to assume the role of the European Commission after it ceases to have jurisdiction.  It is expected that the OEP will cover Environment Impact Assessment and Habitats Regulations Assessments.

Guidance already published by certain councils

Certain councils have published guidance in anticipation of these new rules; the newly formed Buckinghamshire Council is currently consulting on a Biodiversity Accounting SPD which sets out how the Council intends to achieve biodiversity net gain: “the council and those making planning applications will calculate the development impacts on biodiversity as part of their landscape plans [which will enable] schemes to be devised to ensure that a net gain in biodiversity is delivered on site”.

Warwickshire and Lichfield councils have already outlined their biodiversity gain strategies.  To this end, there is some precedent in terms of how to approach these upcoming requirements.

Concluding remarks

These parameters represent an additional admin hurdle involving extra costs.  Nevertheless, overall, it is hoped that the requirement for biodiversity net gain will create new habitats and prevent the loss of several thousands of hectares of habitat for wildlife on an annual basis.  The measures will supplement current protections; in terms of protected sites, net gain requirements would be enforceable after the grant of planning permission which would take into account the existing legal and planning policy requirements for protected sites in the present way.

At the time of writing, it is anticipated that the Bill will receive Royal Assent in Autumn 2021 and the new rules will become a legal requirement two years after this, in 2023.

The Firstplan team will continue to monitor the progress of this emerging legislation.

• Updates on the emerging legislation are available at: https://bills.parliament.uk/bills/2593
• The current version of the Environment Bill [27th November 2020] can be found here: https://publications.parliament.uk/pa/bills/cbill/58-01/0220/200220.pdf
• The Policy Paper on the Environment Bill is available at: https://www.gov.uk/government/publications/environment-bill-2020#history

In the Summer of 2020, the Government announced an update to The Town and Country Planning (General Permitted Development) (England) Order 2015 (as amended) (GPDO) through the introduction of a new 20th Part to the legislation in relation to the construction of new dwellings within the airspace above a range of buildings within England through permitted development rights. These new PD rights came into force on the 31st August 2020.

See our briefing note here… Airspace PD Rights Briefing Note

The Government has announced that it is consulting on the potential introduction of a new permitted development right to allow the change of use from any use, or mix of uses, from the Commercial, Business and Service use class (Class E) to residential uses (Class C3) in England.

The proposed PD rights will go ‘significantly beyond’ the existing rights which allow change from office to residential use and from retail to residential use. For the first time, restaurants, indoor sports and creches etc will benefit from the change of use under the proposals and, significantly, it is proposed that there will be no limit on the size of buildings to which the rights apply. Further still, unlike many existing PD rights for the change of use to residential, it is proposed that the rights will apply in conservation areas.

The introduction of the new Class E use has already had major implications for our high street. These proposed PD rights are equally as radical and it will be interesting to see the outcome of the consultation.

The consultation ends on 28th January 2021.

See our Briefing Note here….  Class E to Resi Briefing Note

Rights Community Action RCA have today announced that their High Court challenge to the Government’s changes to the Permitted Development (PD) rights has been unsuccessful.

The case challenged the lawfulness of three Statutory Instruments (SI), brought in by the Government to shake up the planning system, namely:

(i)                  The Town and Country Planning (General Permitted Development) (England) (Amendment) (No. 2) Order 2020/755 which allows for the enlargement of a dwellinghouse by the erection of up to two new storeys on top of the highest existing storey of the dwellinghouse or above a detached or terraced building used for commercial purposes;

(ii)                The Town and Country Planning (General Permitted Development) (England) (Amendment) (No. 3) Order 2020/756 which relates to the creation of Class ZA PD right whereby a single detached building can be demolished that was in use as an office, for research and development purposes, or for industrial processes or the demolition of a free-standing purpose built block of flats, and the subsequent replacement with an individual detached block of flats or a single detached dwellinghouse within the footprint of the previous structure. The right also enables works for the construction of a new building that can be up to two storeys higher than the original building, with an overall height limit set at 18 metres;

(iii)               The Town and Country Planning (Use Classes) (Amendment) (England) Regulations 2020/757 which replaces several use classes with the broader Class E (Commercial, Business and Service) meaning changes within this new class will now not be termed ‘development’ and no planning permission will be required.

The claimant had sought to quash the SIs on the grounds of inadequate environmental assessment, equality issues and lack of consultation.

The High Court Report, issued today, reinforces the notion that the Court’s role is to rule on the legality of procedural matters and not on political, economic and social decisions. The Court concluded that European law did not require corresponding environmental assessment and that the Government had indeed attributed due regard to the equality impacts. Further, the Court affirmed that in the context of the ongoing pandemic the reasons given for departing from the promise of further consultation were good and were proportionate. Changes to PD rights were held as essential in the effort to stimulate the economic recovery. Simon Gallagher, the Director of Planning for MHCLG, argued in his witness statement that the Government was forced to intervene in response to the pandemic, with the MHCLG conscious of unprecedent challenges faced by the construction industry. To this end, additional PD rights for the redevelopment of vacant buildings for residential use alongside the introduction of the comprehensive Class E use class concerning business, commercial and service uses was introduced. Indeed, explanatory Memorandums outlined how these measures would boost housing delivery whilst protecting the green belt and would spur on the economic recovery. In response, the High Court Report affirmed in paragraph 138 “that was a proportionate course of action in the circumstances”.

In response to today’s announcement RCA have reinforced their commitment to pursuing the cause, stating that the changes represent a reduction in public rights; the environmental lobbying group contend that using the pandemic as a guise to push through such radical reforms is not acceptable. Leigh Day, representatives for RCA, stated today that the Strategic Environmental Assessment Directive does apply to the SIs and they will seek permission to appeal on this ground. Thus, whilst the case has failed in the High Court, it looks likely that there will be a further challenge and the matter is not settled yet. In the meantime the new permitted development rights can be used, but watch this space.

·         The full High Court Report, reference: [2020] EWHC 3073 (Admin), can be accessed here: http://www.landmarkchambers.co.uk/wp-content/uploads/2020/11/Rights-Community-Action-v-SSHCLG-FINAL-15-11-2020.pdf

·         RCA Press Release as of 17^th November is available at: https://rightscommunityaction.co.uk/latest-news/judicial-review-lost-but-we-intend-to-appeal/

·         The Press Release from Leigh Day, representatives for RCA, is available at: https://www.leighday.co.uk/News/Press-releases-2020/November-2020/Campaign-group-seek-to-appeal-judgment-on-changes

·         RCA’s claim is available at: https://rightscommunityaction.co.uk/latest-news/planning-judicial-review-pre-action-protocol-letter-issued/

Additional recent amendments to the GPDO

Further changes to the GPDO have also been confirmed. The Government announced the requirement for National Space Standards to be applied to PD conversions to residential use,  although this requirement will not come into force until 6th April 2021. The aim is to prevent unsuitable ‘rabbit hutch’ style development.

The temporary PD rights for change of use to a takeaway has been extended to 23^rd March 2022, nevertheless restrictive conditions still apply.

Pillar 3 of the ‘Planning for the Future’ White Paper outlines radical proposals to scrap the existing Community Infrastructure Levy (CIL) and Section 106 Planning Obligations and replace it with an all-encompassing Infrastructure Levy.  The Government is clear that the new Levy is intended ‘to raise more revenue than under the current system of developer contributions, and deliver at least as much – if not more – on-site affordable housing as at present’.  But how will the proposed Infrastructure Levy work and will it address the problems with the current CIL and S106 regime?

 

The current system

The CIL was first introduced via the Planning Act 2008 and subsequent Community Infrastructure Levy Regulations 2010 with the most recent amendments occurring in 2019. CIL is currently discretionary in principle and enables a Local Planning Authority (LPA) to levy a fixed charge per sqm of new floorspace which can vary across location, size and type of development and is intended to fund local infrastructure and support development.  Conversely, S106 (previously S52) agreements have been around for many years and take the form of a negotiation between the LPA and applicant, designed to render schemes acceptable through site specific mitigation.

So, what was wrong with the s106 system and why was CIL introduced?  Well, as S106 agreements focus on site specific mitigation, each agreement needs to be negotiated individually with the LPA which, as many developers will know, is often a time consuming and somewhat unpredictable process. The CIL was introduced to allow LPA’s to charge a fixed rate depending on the size and type of development with the aim of creating a faster and more transparent system.  However, the CIL itself has been criticised for being inflexible in the face of changing market conditions and, despite several reiterations to the CIL regulations since its conception, there continues to be an inconsistent uptake characterised by regional disparities, with around half of LPAs still not having a CIL charging schedule.  The other big issue is that affordable housing cannot be delivered using CIL.  S106 agreements therefore remain a necessity for many developments.  In fact, contributions worth a total of £7bn were secured in 2018/19, of which £4.7bn was in the form of affordable housing contributions.

As a result, we are currently left with two routes for LPAs to secure developer contributions, both of which have their own set of issues and limitations.

The proposed Infrastructure Levy

Ergo, amongst the wider reforms set out in the ‘Planning for the Future’ White Paper, Pillar 3 proposes to replace both CIL and S106 obligations with a mandatory nationally-set value-based flat rate charge, termed the Infrastructure Levy. This consolidated levy features several key distinctions. Firstly, the new Infrastructure Levy is to be charged as a fixed proportion of the development value above a threshold. This minimum threshold, below which the levy will not be actioned, is designed to protect low viability developments. Crucially, the Infrastructure Levy would be levied at the point of occupation, to be charged on the final value of a development. This amendment is intended to aid the development industry by smoothing over any potential cash-flow issues associated with having to pay CIL at the point of commencement. Further, LPAs would be allowed to borrow against Infrastructure Levy revenues in the interim to facilitate forward funding infrastructure, hence ensuring off-site infrastructure is delivered in a timely way. Another interesting suggestion is that any affordable housing provided on site could be off-set, meaning it would be deducted from the value of future Infrastructure Levy liability.

The Infrastructure Levy is to be more comprehensive in scope with current exemptions potentially under review. Government is discussing capturing changes of use through permitted development rights. To this end, additional homes delivered through this route would bring with them support for new infrastructure. Of note, the levy would apply to changes of use and not just the creation of new floorspace. The London Mayoral CIL and similar strategic CIL in combined authorities could be retained to support the funding of strategic infrastructure.

Designed principally to reduce time spent on negotiating S106 agreements and inefficiencies in capturing land value uplift, MHCLG intend the new levy to be transparent, consistent and buoyant, whereby the system is flexible to macroeconomics thereby supporting competition in the housebuilding industry. There is a palpable drive to both increase more revenue than the system at present and to deliver more on-site affordable housing. It is suggested that the LPA will be attributed with greater discernment concerning how developer contributions are to be utilised. The Infrastructure Levy would be available for wider purposes than CIL with Local authorities having the flexibility to use this funding to support both existing and new communities. Indeed, the White Paper highlights the aspiration of the Infrastructure Levy being responsive to local needs with revenues continued to be collected and spent locally. Conversely, experts have questioned whether LPAs may lose flexibility in terms of being able to set differential rates for different types of floorspaces.

Potential implications

From a developer perspective the reforms would bring certainty of cost, given that it would be easier to see upfront what their commitments would be, with levy rates fixed at the grant of planning permission. However, owing to the absence of a site-specific viability process at the application stage, the rate of the Infrastructure Levy in policy would be very important; the rate cannot be set too low or too high as there would be no viability process to act as a safety valve.  It is also difficult to see how a nationally- set flat rate can reflect local circumstances.

Unlike the current CIL, the Infrastructure Levy seeks to encompass affordable housing which is often the biggest financial contribution sought by an LPA and frequently takes longest to negotiate.  This is, however, likely to be easier said than done and the finer details on how affordable housing will be secured on site via the new levy will to be critical. Questions also arise such as whether the new levy would be payable in instalments and, significantly, whether the removal of viability assessments will actually help facilitate easier development that is more likely to be delivered (or make it more difficult to deliver schemes which fall just above the proposed minimum threshold). Ultimately, the central issue is how to effectively balance flexibility for local authorities against delivering certainty for developers and communities alike.

The reforms are certainly ambitious and are an opportunity to capture more of the share in the uplift in land value linked with development. Nevertheless, will the all-encompassing Infrastructure Levy work in practice? Or will the alternative option whereby the Infrastructure Levy will remain optional to be set by individual LPAs prove more enticing in reality?

We await the results of the consultation for these proposals which runs until 29^th October 2020.

Planning for the Future White Paper can be accessed at: https://www.gov.uk/government/consultations/planning-for-the-future