More change afoot in planning

Planning iStock 000002733689Small 146x219The planning regime is once more under attack from ministers. Brian Hurwitz reviews the Government’s latest policy announcements.

On 6 September 2012, Secretary of State for Communities and Local Government Eric Pickles issued a statement on the subject of housing and growth. This statement contains a purported commitment by the government that its number one priority is to get the economy growing and as such, the Secretary of State indicates that the government “must create the conditions that support local economic growth and remove barriers that stop local businesses creating jobs and getting Britain building again”.

The proposed measures

The statement sets out detailed measures which are proposed. This article will focus on those which have an impact on planning law and policy, although it should be noted that the announcement also covers various aspects of housing and provision of rented property. In relation to planning, the main aspects of the statement are set out as follows:

  • reducing planning delays;
  • reducing the cumulative burden of red tape;
  • supporting locally led development;
  • helping homeowners improve their homes; and
  • getting empty offices into use.

This article analyses the first two aspects in detail, with brief references to the remaining aspects.

Reducing planning delays

The government starts from the premise that given the importance of efficient and effective planning decisions to the economy, it needs to ensure that where there are clear failures in performance, applicants are able to access the best service.

From that premise, the government proposes legislation to allow applications to be decided by the Planning Inspectorate (“PINS”) “if the local authority has a track record of consistently poor performance in the speed or quality of its decisions”. It remains to be seen what this amounts to in practice and how it will be determined whether a local authority has a track record of consistently poor performance in the speed or quality of its decisions. No doubt this will lead to interesting policy and legal arguments both before Inspectors and one assumes in due course, before the courts.

The statement quoted appears to derive from thinking in the government’s National Planning Policy Framework (the “Framework”) [1]. Within paragraph 47 of the Framework (dealing with delivery of housing), local authorities are advised that “where there has been a record of persistent under delivery of housing” they should increase their additional buffer of housing land supply to 20%. The current requirement is for authorities to identify and update annually a supply of specific deliverable sites which are sufficient to provide five years’ worth of housing against the housing requirements of the traditional buffer of 5%.

Other measures identified under the above heading include working with the Local Government Association to increase the use of planning performance agreements in major schemes and giving planning Inspectors more power to initiate costs awards in planning appeals where it is clear that the application has not been handled as it should have been with due process.

Dealing with the former issue it is worth noting that a contrary view has been put by the LGA in their response to the government announcement [2]. In his statement, the Chairman of the LGA states that “local authorities are overwhelmingly saying 'yes' to new development. There are enough approvals in the system for 400,000 new homes and more than three years of building. The latest figures on councils’ planning approval rates show that they are at a ten-year high and have accelerated since the National Planning Policy Framework was introduced earlier in the year. The planning system is clearly not the problem”.

The above press release was accompanied by a reference to new research revealing a backlog of 400,000 new homes which have received planning permission but have not yet been completed with building yet to start on more than half of the approved plots [3].

On the issue of costs, it is not clear what is to be added, as the costs Circular (03/2009) already allows costs to be awarded based on unreasonable behaviour. This may arise where the unreasonable behaviour is related to substantive or procedural issues.

Other measures under this category include an instruction to PINS to divert resources to prioritise all major economic and housing related appeals with immediate effect, measures to allow developers an additional year to get their sites up and running before planning permission expires and proposed changes to the thresholds for nationally significant infrastructure projects.

Affordable housing and section 106 agreements

The government’s starting premise here is that affordable housing obligations negotiated through section 106 agreements in better times should not undermine the viability of sites and prevent new houses being constructed now. While welcoming the flexible approach taken by many councils to renegotiate agreements where necessary, the government appears nevertheless to consider that legislation is required.

With that in mind, the statement signals that legislation will come into force in early 2013 which will allow developers to appeal if the site in question is unviable because of the number of affordable homes required in the section 106 agreement.  

An instruction will be sent to PINS to provide guidance about how many affordable homes would need to be removed from section 106 agreements so that sites may be viable in the current economic conditions.

The new powers would enable PINS, where necessary, to set aside an existing section 106 agreement in favour of a new agreement with fewer affordable homes. This power is apparently only to operate for a three-year period. This therefore begs the question as to whether there would then be a further review provision at the end of that time, with a potential overage clause whereby the authority could, once financial considerations have improved, require further affordable housing in line with their current policies. This is certainly the case in current practice, particularly where authorities have voluntarily renegotiated previous agreements.

The government states that it will be consulting on legislation that would allow developers to renegotiate unviable section 106 agreements entered into prior to April 2010.

It is interesting to note that the LGA (from their quote above) is firmly of the view that removing affordable housing requirements will not make it easier for developers to sell houses more cheaply and will not address the underlying wider economic issues that are stalling development. The LGA point out that the perception that councils are asking for unaffordable “nice to have add-ons” is wrong. They also point out that in addition to affordable housing, section 106 agreements fund other infrastructure such as roads and new schools.

Again it is worth analysing current advice as set out in the Framework and in particular the footnote to paragraph 47 concerning viability and deliverability [4].

Changes to permitted development rights

The part of the statement that attracted most immediate news coverage related to building extensions.

The government will consult shortly on changes to increase existing permitted development rights for extensions to homes and business premises in unprotected areas, for a three year period. They also propose to introduce permitted development rights for change of use from commercial to residential purposes, while providing the opportunity for authorities to seek a local exemption where they believe there will be an adverse economic impact.

This particular proposal will no doubt be followed closely by local authorities, many of whom have expressed disquiet over this potential loss of control over the planning of their business districts.

Other changes

In summary, other proposals include:

  • altering the thresholds for Nationally Significant Infrastructure Projects in the Planning Act 2008, so as to bring more projects in the DCO regime, and altering the way in which Special Parliamentary Procedure applies to DCOs;
  • review of local and national standards used in different parts of the country (it is not clear whether this is a more general point or whether this relates specifically to housing);
  • increased powers of call in for major new settlements with larger than local impacts;
  • the ability for communities to share in benefits including New Homes Bonus, Community Infrastructure Levy contributions and the financial benefits of business rates discounts and forthcoming business rates retention from April 2013; and
  • encouragement to councils to review local designations to tailor the extent of Green Belt land in their areas to reflect local circumstances.

Conclusion

According to the government, its proposed package of measures will ensure that reforms to the planning system are implemented as effectively as possible and that the planning system plays a full role in supporting local jobs and local firms.

It is worth noting that in a separate comment reported by the BBC, the Prime Minister has stated “We are determined to cut through the bureaucracy that holds us back. That starts with getting the planners off our backs, getting behind the businesses that have the ambition to expand and meeting the aspirations of families that want to buy or improve a home”.

Once again, it appears that whether this is justified or not, the perception in government is that more change is required to the planning system, and that the planning system should take the blame in part for the failure in the growth of the economy. All those involved in planning will no doubt assess the effect of these changes with interest over the next few months, when the promised Economy Bill is introduced and the necessary changes are made to secondary legislation, including the General Permitted Development Consent Order.

Brian Hurwitz is a partner at Sharpe Pritchard. He can be contacted on 020 7405 4600 or by email.

  1. National Planning Policy Framework issued by the Department of Communities and Local Government, 27 March 2012.
  2. LGA media release, 6 September 2012 – www.local.gov.uk – statement by Councillor Sir Merrick Cockell, Chairman of the LGA.
  3. Building backlog of new homes hits 400,000 – LGA media release, 6 September 2012.
  4. Footnote 11 to the Framework