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Delegation default: power to the Chief Planner

Delegation default: power to the Chief Planner

Jennie Baker & Sean Farrissey 11 Jun 2026
The Government has laid the draft regulations necessary to bring the national scheme of delegation into effect, for approval of both houses of Parliament. The intended commencement date is 31 October 2026. This is 20 weeks away, so some applications already in the system will be affected. However, local authorities will need to start preparing for the change immediately.
In this blog we:
 
  • explain the changes made to the draft regulations following consultation;

  • provide a table showing the categories of decision making that different planning applications will fall into; and

  • set out some key points in the guidance, including on the operation of the application of the Gateway test for deciding whether or not an application goes to committee for decision.

The regulations will not apply to development corporations, Homes and Communities Agency, National Park Authorities or the Broads Authority, because they are not “relevant planning authorities”[1]. Therefore, these authorities will not need to amend their constitutions, committee sizes or decision-making processes by the end of October. Throughout this blog we refer to local planning authorities (LPAs), but this should be read as excluding the authorities listed above.

 

Draft legislation and summary of consultation outcome

 

The Government has published its response[2] to the consultation on planning committee reform, including the proposed ‘national scheme of delegation’ for England. The consultation, which ran from 26 March to 23 April 2026, sought views on the technical detail and drafting of the regulations and guidance. Analysis of the proposals can be found in this Lichfields blog.
Also published is the statutory guidance[3] for LPAs in England, which they are required to follow when implementing planning committee reform and when otherwise applying the (currently draft) Town and Country Planning (Discharge of Local Planning Authority Functions) (England) Regulations 2026 (‘the draft regulations’)[4][5].  The guidance is clear that even if an application is in the Schedule of application types that may be taken to committee, applications being referred to committee should be for exceptional cases only.
A total of 611 responses were received to the consultation, over half being from individuals. A quarter of responses, 156, were from LPAs, which means that just under half of LPAs responded.
The government response notes that the same key themes were raised by all categories of respondent. These include views on which Schedule applications should fall into (explained below), seeking the ability for members to call-in applications, concerns about committee size limits being limited especially given local government reorganisation and concerns about defining which applications are linked to officers, members or the authority.
Individual respondents[6] expressed strong opposition to a national scheme of delegation, based on concerns that democratic oversight through consideration at planning committee would be lost. Not all those in the category of individual respondent will have made that objection, but individuals made up more than half of all respondents in a number (333) – coincidentally almost equal to the number of LPAs in England (337). While the government has not rolled back its plans to introduce a national scheme of delegation, the changes to the draft regulations since their last iteration include:

 

  • the implementation date has been delayed from 30 September 2026 to 31 October 2026 to give LPAs time to make the necessary arrangements;

  • ‘large outline planning application’, a new definition (see below),  will determine the Schedule a reserved matters application (RMA) falls within – rather than whether or not the RMA relates to a phased outline planning permission, as was consulted on;

  • Section 73 applications will now be in the same Schedule as the ‘original’ application;

  • ‘Own-interest applications’ is the term for applications where an authority is itself or any of its members or officers are the applicant, or are considered to have an interest in the application - these were consulted on as ‘linked person applications’, with a slightly different definition; and

  • clarifying that ‘minor residential applications’ includes only dwellings and development for purposes incidental to the enjoyment of dwellings.
The forthcoming national scheme of delegation and controls on committee size are among other new or emerging ‘fail safes’ on local decision making. Since 31 March, where a LPA intends to refuse planning permission for a housing scheme of 150 dwellings or more, they must consult the Secretary of State to enable Ministers to decide whether to use their existing powers to call in that planning application. The Government has consulted on the same requirement applying where LPAs are minded to refuse planning permission for commercial development with a floorspace of 15,000sqm or more (see this blog).

 

The Schedules applying to reserved matters approval applications

 

The Government previously proposed that only reserved matters applications relating to non-phased outline permissions were included in Schedule 1 of the regulations. This was to address previously expressed concerns that reserved matters applications can relate to large scale phased development taking place over many years in a changing context and can represent substantial major development, requiring examination at committee. This now dropped approach to reserved matters applications drew a “mixed” consultation response.
The Government has decided to change its approach and has introduced a size-based criteria for determining the applicable Schedule.
The regulations introduce a new definition:
““large outline permission” means an outline planning permission which permits development involving either or both of—

(a) the provision of 500 or more dwellings;

(b) the provision of a building or buildings where the floorspace to be created by the development is 50,000 square metres or more;”

The definition is provided because Schedule 2 includes “A reserved matters approval application in respect of a large outline permission”.
Only reserved matters applications relating to a large outline planning permission will fall into Schedule 2. Reserved matters approval applications relating to smaller outline planning permissions will fall into Schedule 1 and be determined by officers. The statutory guidance refers to a “large outline phase permission”, but this may be corrected in due course, as there are no longer references to phasing in the draft Regulations.
This suggests that, where the outline permission permits up to 500 homes, the reserved matters application would fall within Schedule 2, even if the final phase shows that less than 500 homes will be built.
This will mean that the proposals within an outline planning permission that do not constitute floorspace, such as caravan bases, will not be relevant to whether the permission is a ‘large outline’ and thus whether a related RMA falls within Schedule 1 or Schedule 2.
However, the key point in this context is the intention that in all cases the referral to committee should be exceptional, regardless of which Schedule an application falls into.

 

 

Schedules and own-interest applications

 

Category
Delegated to officers?
Application type
Schedule 1
Always
Householder application
Minor commercial application
Minor residential application[7]
Reserved matters application other than those made in respect of a “large outline permission”
Application for s96A non-material amendments
Section 73 application where the original/previous application was in Schedule 1, unless it relates to a listed building consent or variation of
Application made for approvals in a relation to a planning condition
Application for approval of the Biodiversity Net Gain (BNG) Plan
Application for prior approval or a determination as to whether it is required (related to permitted development rights)
Lawful Development Certificate application
Certificates of Appropriate Alternative Development application
Application for Permission in Principle
Application to modify or discharge a s106 obligation, where it is connected to a Schedule 1 approval
Schedule 2
By default, unless the Chief Planner and Chair of Committee decide it should go to Committee based on meeting statutory criteria ‘the Gateway Test’
Application for planning permission that is not a householderMinor Commercial or minor residential[8] application
Reserved matters approval application in respect of a large outline permission (at least 500 dwellings and/or at least 50,000sqm floorspace created)
Section 73 application where the original/previous application was in Schedule 2
Section 73A (retrospective) application
Application to modify or discharge a s106 obligation, where it is connected to a Schedule 2 approval
Application for listed building consent, application to vary or discharge a listed building consent condition and any planning application that the LPA considers is connected with these consent types
Advertisement consent application
Tree preservation order applications
Review of mineral planning conditions
Own-interest applications
Can be determined by officers. Alternatively, the nominated member and nominated officer may refer it to a committee
An application made, whether jointly with another person or not, to an authority to which the Regulations apply, by or on behalf of that authority, or a member or officer of that authority or if in the view of the nominated member and the nominated officer, the authority or any of its members or officers otherwise has an interest in the application made.
The national scheme of delegation does not apply to development corporations, Homes and Communities Agency, National Park Authorities and the Broads Authority.
There is no reference to hybrid planning applications, probably because they don’t exist in planning legislation. In our view, when establishing whether or not a reserved matters application relating to the outline part of a hybrid permission falls within Schedule 1 or 2, only the housing or floorspace proposed in the outline part of the permission would be counted towards the 500 unit/50,000sqm threshold for Schedule 2.
The guidance doesn’t explain which Schedule section 73 (s73) applications relating to applications determined prior to the new system will fall into, so it seems likely that if the original application was determined by planning committee then the s73 will fall within Schedule 2.
The guidance confirms:
“Where a planning function is not listed in either Schedule 1 or 2, it is for the local planning authority to decide whether it should be delegated to an officer or referred to a committee or sub-committee for a decision (as part of its local constitution)”.
Where an application falls to be determined by an officer, the LPA must not make arrangements that limit the officer’s discretion as to how to determine that application.

 

The statutory criteria for referral to Committee ‘the Gateway Test’

 

The criteria for referral of applications to committee, known as the Gateway Test, has been criticised, including in consultation responses, as being too broad and open to interpretation. The Government has decided that these concerns should be addressed in guidance and they have expanded the statutory guidance published alongside the draft regulations. The Planning Advisory Service (PAS) will continue to work with government to develop good practice advice to support LPAs in applying the reforms.
The updated guidance clarifies that it is not a requirement of the national scheme of delegation that nominated officers and nominated members consider all Schedule 2 applications or all own-interest applications for potential referral to committee. It will be up to LPAs to determine which applications should be considered for referral and Schedule 2 applications can be determined by officers.
It will be for LPAs to determine their own arrangements for triaging Schedule 2 applications in terms of how they are taken through the Gateway Test and deciding the route that they should follow[9]. The guidance is clear that LPAs are under no obligation to establish a triaging system but may follow this route if they wish. Own interest applications can be taken to committee without needing to pass the Gateway Test.
The guidance notes that the “overriding presumption” should be that applications are determined by officers and determined by committee as an exception.
At least one of the statutory criteria must be met for a Schedule 2 application[10] to be referred to committee for decision. The statutory criteria (a) and (b) are set out in the Regulations and in the statutory guidance (A and B). Regulation 5 says that the nominated member and nominated officer, having had regarding to the statutory guidance, “may agree to refer a Schedule 2 application to a committee if in their view it raises—
(a) one or more issues of economic, social or environmental significance to the local area, or
(b) one or more significant planning matters having regard to the development plan and any other material considerations”.
If they decide not to refer to the Committee, then an officer must determine that application.
The statutory guidance lists the below three potential examples of what may constitute a significant issue to the local area under criterion A[11], while noting that there will be local variations:

 

“an application for outline planning permission for a large multi-phase residential development allocated in the local plan

an application for planning permission for change of use of a community shop in a rural area

an application for planning permission or listed building consent for changes to a notable listed building in a town centre”
For criterion B, the guidance says that the following circumstances are unlikely to raise a significant planning matter:
"where the application for development broadly complies with a detailed site allocation and other relevant policies set out in a local or neighbourhood plan and national decision making policies set out in the National Planning Policy Framework. Significant planning matters may arise if new material considerations are raised by the application
where a specific planning matter (e.g. highways or flood risk) was initially raised by a statutory consultee as a concern, but the development proposal has been modified to make it acceptable in the view of the statutory consultee (unless the nominated officer has compelling reasons to consider otherwise)."
These examples, in paragraphs 23 and 24 of the guidance[12], are the same as those consulted on, and of very limited use. It will be much more helpful to discuss interpretations of ‘significant’ directly with local officers and to monitor emerging patterns. Local knowledge will be increasingly important in this regard. The record that should be kept of cases that the nominated officer and member have considered, setting out their reasons for the determination route decided, will be important too. The consultation response says that the Government will work with the PAS to see if greater clarity on how the gateway process should operate and advice on interpreting the gateway criteria might be incorporated into the good practice advice PAS is developing to support local authorities.

 

Delegation default

 

The diagram below aims to capture what we understand about the new decision-making procedures. It draws out how many opportunities there are in the process for a Schedule 2 application to be decided by officers, reflecting the policy ambition.

View Planning decision making procedures diagram
 
  

Refer or not refer – who decides?

 

The regulations say that “the nominated member and nominated officer may agree to refer a Schedule 2 application to a committee” if it raises a Criteria A or B concern. Similarly, the draft regulations say that “The nominated member and nominated officer may agree to refer an own-interest application to a committee”. The draft regulations do not provide a process for situations where the officer and member do not agree on whether an application should go to Committee.
However, para 15 of the statutory guidance says (our emphasis):
“Nominated officers and nominated members should make every effort to reach agreement on which cases should be referred to committee. However, where agreement is not possible, the case must be determined by officers in accordance with regulation 5(2) or regulation 6(3)”.
Regulation 5(2) says that Schedule 2 applications not referred must be decided by an officer. Regulation 6(3) says the same for own-interest applications. Therefore, the statutory guidance is key – and some members will push hard against this. Political reasons to take an application to committee with the intention of approving it would include the press coverage of a popular approval. But, on the whole, a key driver for a councillor will be either to vote for refusal of an application, to seek additional conditions, or to be seen to be objecting to an application. Planning is about people and many councillors are likely to question and then be frustrated by the casting vote of the chief planner, particularly as the system beds in.
Our diagram emphasises that this isn’t a straightforward system and it may be that it results in more applications being considered at Planning Committee, particularly where councils revisit schemes of delegation. This may be the case particularly where councils are under new leadership and/or have no overall control.
As one would expect, the Planning Officers’ Society has published detailed analysis of the decision-making procedures, within its ‘Good Practice Guidance Note - National Scheme of Delegation’[13]. This includes guidance on approaches to triage and templates of the documents that need to be updated.

 

Maximum committee size – and training in the future

 
From 31 October, the maximum number of members on a planning committee will be 13, which is unchanged from the consultation. Again, the limit on committee size only applies to “relevant planning authorities”. The guidance says:
“This is a maximum figure to accommodate local planning authorities where members are from multiple political parties. Local planning authorities should consider whether a smaller number of members would be more appropriate in their area to support effective decision making”.
In a recent PAS and MHCLG seminar[14], MHCLG’s Deputy Director of Planning confirmed that the focus for now is on the scheme of delegation, with legislation and guidance on councillor training to follow. The Government intends to carry out “further sector engagement to get the correct approach”. It is worth noting PAS research regarding member training here:
“The PAS planning committee survey 2025 identified that 81 per cent of planning committees in England made it a mandatory requirement for councillors to be trained if they wish to sit on the planning committee”[15].
Therefore, less than a fifth of planning committees (and perhaps considerably less), have no training requirement at present. The quote is taken from the PAS ‘Planning committee best practice self-assessment toolkit’[16] which notes that Councils not training planning committee members, even ahead of it being a national requirement, may be at risk of challenge.
While the vast majority have a training requirement, current training standards may vary and PAS advises Councils to “check progress on national changes before reviewing your own council’s schedule of training”.

 

Potential impact

 

The draft Impact Assessment (IA) of the draft Regulations sets out how the national scheme of delegation is likely to affect decision making and appeals, based on past trends and data.
The IA refers to Lichfields research[17] that looked at 640 planning appeals for developments including at least 50 residential units in England from January 2021 to August 2024 and found that 33% arose from a refusal by planning committee contrary to officer recommendation. The draft IA assumes, in the absence of additional data, that the Lichfields 33% figure is appropriate to apply to all appeals relating to major applications (both residential and commercial).
The Government's data and analysis was used to assume that 3% of minor appeals arising from committee's refusing against officer recommendation. MHCLG officials' own analysis found that 40% of major appeals related to applications that had been refused by a planning committee, despite being included in a local plan. The analysis assumes that these applications would now all be approved, but acknowledges that risks overstating the impact. Instead 20% is used as the likely reduction in appeals (with a sensitivity testing range of 5%-40%). Taking into account these factors and others set out in the IA, the authors expect the average annual number of appeals to be reduced by 85 (of which 5 reductions would be major commercial appeals)[18].
Use of Lichfields research has informed an estimate that up to 485 additional homes will be delivered annually this Parliament, as a result of the national scheme of delegation, based on the Office for Budgetary Responsibility (OBR) trajectory of new homes.

 

Regulation review

 

There will be a duty in the regulations in the Secretary of State to undertake and publish a review of the regulations by 31 October 2028, providing an opportunity to assess the effectiveness of the reforms after two years in operation and make any necessary changes.

 

Practical implementation consequences

 

The final regulations are due to be made in July and are scheduled to come into force on 31 October 2026. The guidance expressly notes that if a planning committee makes a decision on or after 31 October, which the Regulations require that only an officer should make, that decision may be subject to judicial review by an aggrieved party, which could lead to the decision being quashed. In practice this situation is unlikely to arise, but it serves as a written warning to frustrated councillors who might conclude that they have less and less control on decision-making - particularly those with an out of date local plan.
As noted at the start of the blog, local authorities will already be thinking about the administration of these changes. Beyond the changes to constitutions and member/councillor protocols, perhaps whether or not to triage Schedule 2 applications will be given particular consideration by planning teams and councillors. With the recent significant changes in leadership of local authorities across England and the new planning committees just bedding in, in many places there will be no existing working relationship between the planning committee chair and the chief planner or equivalents. Against that backdrop, it will be interesting to see which LPAs decide that the planning committee chair will review every Schedule 2 application, which decide solely the Chief Planner will lead on it and, where there is a formalised triage approach, as to whether or not a Schedule 2 discussion is needed.
Given that the chief planner has the casting Gateway Test vote on whether an application is referred to Committee, a triage might only happen where there are truly engaged and collaborative officer/member relationships – or where officers and members want to build them.
There will be much work for officers to do in terms of considering what might be a significant issue or matter in their area, when considering the Gateway Test criteria, in order to derive consistency when making or not making referrals. Consistency will be apparent from the record of discussion that should be kept. Officers will need to liaise with the chair of the planning committee or other nominated member and may also liaise with Councillors more widely on their intended approach.
At this year’s Haymarket Planning Summit[19], concerns were raised about the additional pressure the national scheme of delegation will put on nominated officers, both in terms of discussions with councillors and the public focus on who ultimately made the planning decision. Referring to her attendance at the Summit, albeit not those concerns specifically, Baroness Taylor, Lords Minister for Housing and Local Government, said in Parliament[20]:
“I was with a group of planning officers this morning. If ever a group of council officers suffer this kind of harassment, it is our planning officers. That has to stop. They need to be able to do their job and their consultations without risking harassment and intimidation and be able to make decisions according to law and their professional expertise without fear of harassment”.
Notwithstanding potential alternative approaches to implementation, it is clear that chief planners will wield significantly more control in decision making from Monday 2 November.
 
Footnotes

 

[1] Town and Country Planning Act 1990, Interpretation of sections 319ZZC to 319ZZE

[5] The draft Explanatory Regulations to the draft 2026 regulations, says that “To facilitate a national scheme of delegation, the government intends to amend the Local Authorities (Functions and Responsibilities) (England) Regulations 2000 to coincide with the coming-into-force of this instrument”.
[6] Individual respondents (333) provided their personal view. The other categories are local authority (156), neighbourhood planning body, parish or town council (49), developer (22), other private sector organisation (11), professional body (7), interest group or voluntary organisation (21), other (12)

[8] As above

[10] That is not an own-interest application
[11] The criterion references are capitalised in the guidance
[16] As above

[18] Based on the assumption that residential applications grow with the Office for Budgetary Responsibility’s (OBR) forecast of UK net additions from the October 2024 Economic and Fiscal Outlook. In the 1.5m aligned trajectory, the draft IA authors expect the average annual number of appeals to be reduced by 121.

CONTINUE READING

A sporting chance… transitioning to a post-consultee world
On 18 November 2025, and as part of the Government’s commitment to 'unleash Britain's potential to build', a consultation was launched seeking views on reducing the involvement of statutory consultees in the decision-making process in England. Citing a failure of consultees to engage in a proactive and proportionate way, nor in a timely manner, with responses often failing to be commensurate with that necessary to consider the planning merits of a development[1].
To this end, development proposals include removing Sport England, The Gardens Trust and The Theatres Trust as Statutory Consultees on planning applications. For Sport England in particular, their current role[2] would be reduced down to the following responsibilities:
  1. They would be retained as a plan-making consultation body (and a prescribed body for new plan making[3]);

  2. Be notified (as an amenity society might) on planning applications that would result in the wholesale or substantial loss of playing fields. Sport England could respond if it chooses;

  3. Inform updated Planning Practice Guidance on consultation and pre-decision matters to ensure relevant issues are considered; and,

  4. Play a role in developing guidance for local authorities to assist with their consideration of applications that affect playing fields.

 

Overall, the Government’s view is that the protection already afforded such facilities in the NPPF, alongside local policy and guidance, will be sufficient to secure the right sport and recreation spaces in the right places – maintaining appropriate levels and quality of facilities for the communities they serve.

 

A streamlined system

 

In general, slimming a system that has grown weightier over the years is no bad ambition. Particularly where resourcing has not allowed consultees to keep up with an increased demand on their time. But if an expert group is removed from the process, a greater pressure will be placed on the decision maker, usually a case officer and/or planning committee, to understand the issues, interpret the evidence and conclude on appropriateness. LPA planning departments are themselves, already severely stretched.
It raises the questions as to whether LPA decisions makers have the time and resourcing to fully explore and work around the nuance of the issue. The introduction of guidance and criteria will help to an extent but as with any intervention, we will have to wait and see whether removing a layer of scrutiny speeds up decision making.
When neither the question nor the answer is binary, specialist experience can be a significant advantage. To this end, the quest for greater speed in decision making will not remove the need for applicants to provide technical information in support of applications – indeed it places greater emphasis on the quality and completeness of the evidence presented.

 

Making the Case

 

Lichfields has supported many of its clients in defining and quantifying the need for sport and leisure facilities in an area. Whether that’s supporting the loss of an existing facility, as was the case at Loomer Road, Newcastle Under Lyme (Client: Cole Waterhouse) where  Lichfields successfully demonstrated a lack of demand as well as an alternative provision better suited to the demographic, to support the loss of a motor sport facility in favour of a 300,000 sqft distribution unit. Or at Barony Campus, East Ayrshire (Client: East Ayrshire Council), where Lichfields calculated and evidenced the requirement for playing pitches as part of the merging of educational sites into one combined higher quality provision.
In both cases Lichfields utilised its bespoke product – Fit for Purpose. The tool combines GIS mapping, demographic analysis, assessment of supply and quantification of need to build a profile of the catchment area and need or otherwise for a specific facility or type of service. Articulating the case for the right development in the right place.
Designed to assist both applicants and LPA's, it can be used to:
  • Promote new sport and leisure development;

  • Support the loss of surplus facilities;

  • Develop policy and guidance;

  • Rationalise existing assets and estates

  • Stress test expansion plans; and/or

  • Appraise purchase opportunities.
As we enter an age where the need to articulate the specialist case will be increasingly critical in helping Local Planning Authorities assess the impacts of development, Lichfields has the experience and products to help. Do get in touch, if you would like to find out more.
 
Footnotes

 

[2] Currently LPAs are required to consult Sport England on development proposals which:
(i) is likely to prejudice the use, or lead to the loss of use, of land being used as a playing field; or
(ii) is on land which has been—

(aa) used as a playing field at any time in the 5 years before the making of the relevant application and which remains undeveloped; or
(bb) allocated for use as a playing field in a development plan or in proposals for such a plan or its alteration or replacement; or

(iii) involves the replacement of the grass surface of a playing pitch on a playing field with an artificial, man-made or composite surface
[3] Levelling Up and Regeneration Act 2023: Section 100: Requirement to assist with certain plan-making

CONTINUE READING

Fine Margins – When ambition meets viability
The Government has made clear its ambition to deliver 1.5 million homes over the course of this Parliament. This commitment sits at the heart of its wider planning reform programme which includes revisions to the NPPF, housing targets, and accelerated decision-making processes.
 Latest statistics published by MHCLG indicate that housing delivery has fallen some distance from this required trajectory. Housing supply in England amounted to 208,600 net additional dwellings in 2024/25, down 6% on 2023/24 delivery. Provisional estimates published alongside those figures indicate that 275,600 net additional homes were delivered between the start of Parliament in July 2024 and 9 November 2025, implying that delivery to date is running well behind the level needed and highlighting that it would need to rise very considerably above recent output if this target is to be achieved.
This weaker delivery is reinforced by Office for Budget Responsibility’s (OBR) November 2025 Economic and Fiscal Outlook, which revised down its housing forecast. Whilst the OBR projects housing delivery to rebound after a period of decline, the revised forecasting implies that that housing delivery will only exceed 300,000 dwellings in one year (2030/31). Indeed, the OBR forecasts imply the Government will deliver c.1.2 million homes over the Parliamentary term – a significant shortfall.
 
Figure 1: OBR Housing Market

Source: OBR Economic and Fiscal Outlook – November 2025 (2025)

 
The Viability Squeeze
The OBR point to shortages of viable sites in parts of the country as a constraint on supply. This view has been supported by 2025 research undertaken by the House Building Federation[1] (HBF) which found that almost two-thirds (64%) of respondents identified viability pressures as a major barrier to housing delivery. The report also suggested that these pressures are no longer confined to particular regions, but are now being felt more widely across England, increasing the risk of development dampening in all parts of the country due to viability constraints.
A similar position was identified by Zoopla[2], which found in September 2025 that viability challenges affect almost two-thirds of local authority areas (64%) in England.
Figure 2 Housing Viability across England

Source: Zoopla Research – new homes viability model (2025)

 
These increasing viability pressures have stemmed from a number of factors, most notably including:
  
  1. Rising construction costs: An analysis of Building Cost Information Service (BCIS) build cost data and ONS sales price data highlights that build cost increases have outpaced sales values.  Over the period Q3 2021 and Q3 2025 build costs increased by 21.8% whilst sales values grew by just 13.1% over the same period.
     
  2. Regulatory costs: recent changes have included more stringent building regulations, the introduction of Biodiversity Net Gain requirements in 2024 and ongoing nutrient neutrality requirements. going forward, additional policy and regulatory requirements, including the Future Homes Standard and Building Safety Levy will further increase the costs associated with the delivery of new housing.
     
  3. Tax increases:  rises to national insurance contributions, corporation tax and landfill tax have all had an impact for housebuilders and add to the cost burden which impacts on the viability of development.
 
Analysis presented within the recently published HBF Viability Crunch report[3] found that the construction of a hypothetical 90sqm low-rise dwelling now costs £76,000 more than in 2020. This is significantly above house price inflation over the same period.

Table 1:  Additional costs for each new home
 
Additional Costs (2025 compared to 2020)
Material and labour
£37,000
Future Homes Standards
£10,200
Building Regulations
£7,770
Nutrient neutrality
£7,000
Biodiversity Net Gain
£5,700
Landfill Tax
£2,000
Taxes
£2,055
S106 Inflation
£985
Building Safety Levy
£2,320
Total
£76,000

 

Source: HBF Viability Crunch (2026)

 

NPPF Consultation 2025: Viability Updates
Policy DM5 of the draft NPPF, which was published in December 2025, relates to development viability and builds on Paragraph 59 of the current NPPF. The accompanying consultation document sets out that the revisions seek to reduce cases of unnecessary site-specific viability assessment. Revisions to the wording appear somewhat at odds with growing issues of viability nationally as highlighted within this blog. Policy DM5 (2) speculates that:
 
“There may be limited circumstances in which it is not possible for development to proceed on a policy-compliant basis.” (Lichfields emphasis).
 
Policy DM5 provides some examples of the circumstances in which viability assessments may be justified to inform decision-making. These include: 
 
  1. The development is significantly different from any typology assumed in the development plan viability assessment;
     
  2. Site characteristics differ substantially from the assumptions used to assess viability when the relevant development plan policies were prepared;
     
  3. The development is demonstrably burdened by costs which were unforeseen when the development plan was prepared; and/or
     
  4. Site or economic circumstances have changed significantly since the development plan was prepared.
It is noted, however, that this list of circumstances echoes that already set out in the Planning Practice Guidance at Reference ID10-008-20190509.
 
The new plan-making system underpinned by legislation in the Town and Country Planning (Local Planning) (England) Regulations 2026 sets out a requirement for the preparation of new Local Plans to be developed five-years after the previous plan is adopted. 
 
The NPPF establishes at paragraph 59:
“Where development proposals accord with relevant up-to-date plan policies, they should be assumed to be viable.” 
 
However, almost two-thirds (65%) of the Local Plan and CIL Viability studies assessed as part of Lichfields’ Fine Margins 2 study were more than five-years old (with a median age of 5.83 years). Whilst Local Plan viability assessments provide a helpful framework for understanding broad viability, they provide a point in time view and may therefore fail to reflect current economic and market conditions; they do not consider the costs associated with policy obligations emerging post-implementation. 
 
As presented in the previous sections of this blog, housebuilding is an inherently fluid and dynamic industry which is sensitive to economic and policy changes. The economic, regulatory and tax landscape can change substantially in reasonably short timescales and affect development viability. Policy DM5, it seems, affords some flexibility to reflect this. Whilst the NPPF reiterates that the role for viability assessment remains primarily concerned at the plan-making stage, viability can and should be re-visited in instances where economic circumstances have shifted. It is expected that viability will continue to be subject to review at planning application stage and will inform discussions about potential deviation from policy requirements where viability constraints necessitate this.
 
 
Lichfields’ Fine Margins
The current and draft NPPF (and the PPG) solidify the need for accountability, consistency and transparency in viability assessments, stating that practitioners should clearly and reasonably justify their inputs and assumptions and make all information sources explicit within viability assessment.
 
As part of this, Annex B of the draft NPPF reaffirms that standardised inputs to viability assessments should be used to provide a consistent framework for evaluating development proposals and ensuring both authorities and developers have greater certainty in the viability assessment process.
 
Lichfields’ Fine Margins: Second Edition research[4] draws on an analysis of 144 Local Plan and CIL Viability Studies to present and ascertain a sensible range of input assumptions across key metrics adopted within viability assessments. The study provides a comprehensive overview of the input values that can be utilised in development viability assessments. 
 
The publication of the Fine Margins: Second Edition study provides a timely update in response to the proposed changes to viability as set out within the NPPF and considering the critical challenges of viability in housebuilding. To discuss how Lichfields can support with regard to development viability matters, please get in contact with Simon Coop (Senior Director) or myself.
Footnotes    

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Funding A High Street Comeback in Wales?
This blog explores current funding opportunities and highlights Lichfields’ involvement in many of the key projects being advanced across Wales as a result. It demonstrates how we can support developers and businesses to deliver impactful and meaningful outcomes.
Town centres are central to Welsh life, with just over 2.5 million people in Wales living in towns or cities, yet one in every seven shops on Welsh high streets are vacant.[1] Clearly, this not an issue unique to Wales; town centres across the UK are rapidly changing in response to a major structural shifts in shopping and working patterns, with an ensuing decline in demand for physical retail floor space.
However, it is important to remember that historically town centres have served purposes beyond simply retail and have continuously evolved to meet the changing needs of visitors. Whilst the earliest centres were located for defence or at key locations along routes, towns and town centres quickly evolved as places of trade, and places to live, work and play. It is through this prism that that future role of town centres should be planned. As retail uses contract, town centres are increasingly becoming places to gather, socialise and experience.
In recognition of this, the Welsh Government has introduced a range of measures to reinvigorate town centres. This includes the adoption of a Town Centres First policy, which is reflected in Future Wales: The National Plan 2040, the national development plan for Wales.

Context: Town Centres First for a Mix of Uses

 

The Town Centres First policy highlights the need to rethink the future of town centres as they transition away from traditional retail roles. It actively supports the growth and regeneration of towns and cities, promoting a vibrant mix of uses, including commercial, retail, education, healthcare, leisure and public service facilities.[2]
It also encourages the public sector to take an increased role to support the growth and regeneration of town and city centres. A key facilitator of this is the Transforming Towns Programme which provides funding to local authorities and developers to revitalise town and city centres across Wales. Similar initiatives are also run by the UK Government, which provide long term investment to communities to restore local pride and unlock new opportunities. Our Revitalise Tool Kit has been successfully applied across town centres throughout the UK, helping strengthen the case for investment and in turn delivering meaningful change.

The Transforming Towns Programme

 

The Transforming Towns Programme was launched by the Welsh Government in March 2020, to support both the development and delivery of regeneration projects, alongside smaller scale place-making initiatives. Since its launch, the programme has awarded more than £484 million in grant and loan funding to support regeneration. In February 2026, it was announced that a further £30.9 million would be provided to local authorities to assist with these efforts.[3]
This fund is available to local authorities who can work with partner organisations to develop projects.
Lichfields has been supporting Thackeray Estates in the repurposing and redevelopment of Howells, a Grade II* former department store. The £100m regeneration project at the heart of the City Centre is seeking to transform the vacant former department store into a vibrant multi-use destination. The project has benefitted from the Transforming Towns Programme - the recently erected hoarding was part funded by the Programme.


Credit: Thackeray Estates

 

Lichfields Insight, Out with the old, in with the new, provides further guidance in relation to successfully repurposing town centre buildings. It is intended to assist others in successfully promoting the repurposing of built assets.

 

Transforming Towns Place-Making Funding

 

The transforming towns and placemaking funding supports the delivery of smaller schemes that require no more than £300,000 grant funding and is designed to be accessible to a number of delivery partners across the private, public and third sectors.[4] 
Transforming Towns Strategic Funding

 

The transforming towns strategic funding is intended to support the delivery of a specific projects led by a local authority where more than £250,000 grant or loan funding is required.[5]
Transforming Town Loan Fund

 

Between 2022 and 2025, £25 million was made available across Wales to support projects which reduce the number vacant sites within town centres. The fund is an interest free loan, administered by the local authority who cannot use it for their own projects.[6]
The interest free loan must be paid back to the local authority, usually within 5 years. Once the loan is repaid, the local authority can use it again to support new projects. The fund is required to be reinvested 2 to 3 times over 15 years.
Those who are eligible for the loan include:
  1. social housing associations

  2. property developers

  3. private landlords; and,

  4. businesses

 

Pride in Place Programme

 

The Pride in Place Programme was launched by the UK Government in September 2025. As part of the programme, the UK Government has committed to investing £5.8 billion over 10 years in order to transform communities across the UK; each neighbourhood can receive up to £20 million over 10 years to improve local communities.[7] Nine Welsh neighbourhoods have been named as recipients of this funding.[8]

UK and Welsh Government funding

 

For large infrastructure and regeneration projects, direct capital funding from the UK and Welsh Government is also available. 
Lichfields has been supporting Urban Splash and Swansea Council with their development proposals to refurbish the Swansea Civic Centre building.  The refurbishment and repurposing of the former Council Civic Centre forms the centre piece of the wider masterplan for Swansea beachfront. A crucial element of the proposal is the development of ‘Ffordd ir Môr’, an active travel route, which will complete the link from the City Centre to the beach and unlock the vision of a ‘City on the Beach’.
Urban Splash, Lichfields and Swansea City Council have been working collaboratively to ensure the project comes forward as part of the wider ‘City on the Beach’ initiative. The project has attracted financial backing, including £20 million of direct UK Government capital funding.

 

Credit: Pexels Turang Photography

 

Conclusion

Plaid Cymru has emerged as the largest party following the Senedd election on 7 May 2026. Supporting small businesses and regenerating high streets is one of Plaid Cymru’s key manifesto objectives. It is anticipated that Town Centres will therefore remain a key priority for the incoming Welsh Government.
The Welsh Labour Government actively put ‘Town Centres First’ into practice, through direct funding aimed at unlocking the regeneration of towns and city centres across Wales. Whilst the revitalisation of town centres is a manifesto objective for Plaid Cymru, time will tell whether the existing streams of funding and support will remain. 
Lichfields has been at the forefront of these regeneration efforts across Wales, helping to revitalise towns and cities, breathing a new lease of life to centres. The Cardiff Office has assisted several clients bring forward a broad mix of diverse uses on underutilised and vacant premises in town centres through repurposing, redevelopment and reuse.  Many of these projects have successfully obtained UK Government and Welsh Government support and funding.

 

Footnotes

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