Planning matters blog

The High Street isn’t dead, long live the High Street #1

James Fennell 30 Apr 2020

The current crisis has inevitably meant even more headlines declaring the 'death of the High Street' in the press and amongst some property people. There are huge challenges ahead but we are at a pivotal moment. The gravity of the situation we currently face is going to mobilise energy, dynamism and innovation like never before, such that the rebound - when it comes and it will take some time - will bring a genuinely new and positive future for many of our town centres.

This is the first in a number of blogs about the future of the High Street and I start with where we are now, in the middle of a crisis.

The bad news is well trodden ground already and the situation is going to get worse before it gets better. Many town centre businesses are in distress, some have gone to the wall already and more will follow in the coming weeks and months. Landlords are faring no better; everyone is facing up to the reality of a long phased exit strategy including a lingering fear pervading amongst the population until a vaccine eventually appears.

So what is there to be positive about? Plenty in my view if you look carefully at what is stirring and it starts at the top.

Up until about two years ago the Ministry of Housing, Communities and Local Government were only really interested in planning for more homes and they didn't concern themselves that much with the potential of town centres contributing to that very important policy agenda. Thankfully things have now changed - the Government is engaged and the problems we now face should only increase the funding and resources that will be made available in the future. Putting this together with the levelling up agenda will mean more centres will benefit and there will be a better spread of investment than ever before. It might also be that the business rates holiday handed down to mitigate the effects of Covid-19 will herald much needed wholesale reform in that area, a longstanding ask of the industry.

At local level we are seeing a tremendous response from many local planning authorities to Covid-19. Our Business as (un)usual live web tool gives up to date information about how over 90% of local authorities are responding to the challenges they face undertaking pre-application and decision-making processes, amongst other things, at the current time. Some are struggling with a lack of IT investment following cuts to budgets; others are requisitioning planning staff to work closer to the frontline, dealing with such things as business rates and supporting small businesses on the High Street by providing training on selling their products via on-line platforms to create new income streams whilst their shops are closed.

I am an independent member of the Planning Decisions Committee at the London Legacy Development Corporation and was involved in its first virtual committee meeting earlier this week. The Corporation is not covered by the Government's emergency legislation but no matter; urgency powers were invoked and decision-making authority was vested in the chair, informed by discussion with committee members. There were presentations from officers and public speakers, all curated via Skype for Business. No committees have been missed so it's (almost) business as usual and this is critical to ensure that those developers proceeding with schemes are not held back.

What we are seeing is more of the best of what local government has to offer. At a time of adversity we see new leaders come to the fore, driven by a strong sense of duty to do all that’s required to help those in need. Economic development departments are all hands to the pump and we have seen strong interest in our Covid-19 Economic Risk Index as minds turn to future investment planning. With town centres very much in the policy spotlight and money available from Central Government we will see this vigour carried forward in the planning arena. More action plans and investment plans will emerge and we will see a new wave of development coming forward when market conditions improve.

What form that development will take brings me on to the last matter for this blog. Despite the decline of retail in recent years the value - actual and perceived - wrapped up in shops and the car parks that serve them has been a barrier to re-development with appraisals having to deal with very large negative starting points. But the balance has now tipped. Just as the decline in retail values shows no sign of abatement the fundamental shortage of new homes will underpin demand, and values, in the residential sector, even if recession remains a short term challenge. Shopping centres are of increasing interest to residential and mixed use developers and local councils. Retail uses will shrink to a more sustainable core offer, a wider variety of commercial and community uses will be intertwined and new homes will sit on top and around them. But there will be regional variations and different strategies for different centres. In town centres where there is no market for residential development, we should plan for a renaissance in start-ups and independent businesses combined with the re-purposing of existing space and improvements to the public realm and basic infrastructure.

The commercial property industry is currently taking a massive kick in the teeth and its focus is necessarily a short term one overcoming an unprecedented situation. Representative organisations are representing their members and lobbying Central Government hard, with a noteworthy recent proposal by Revo, the British Property Federation and the British Retail Consortium for a Furloughed Space Grant Scheme (where the state would cover the fixed costs of businesses that have experienced falls in turnover), having received much publicity.

Just as there have been major challenges for local government over the last decade responding to massive cuts in their budgets, the property industry will need to strike out of its segmented silos, cross-fertilise knowledge and ideas, and rise to the epic challenges our town centres face and seize the opportunities that always arise out of adversity. There is hard work ahead but the High Street certainly isn’t dead; long live the High Street.

Other blogs in this series:

Business as (un)usual – how is the planning system holding up?

Bethan Haynes 27 Apr 2020

Like the country as a whole, the planning system finds itself in an unprecedented situation. The position is changing fast, but our live COVID-19 tracker provides us with an initial view on how local planning authorities across England, Wales and Scotland are responding to the crisis: it shows variations in pace of response, but on the whole the picture is positive.

This blog provides a summary of what is happening on the ground. Our tracker has a 90% coverage of LPAs, but please note that any figures relate to the percentage of authorities who provided a response to specific questions, and not all answered all questions. Analysis is based on data collected between 16^th and 24^th.

Lichfields has partnered with the Planning Advisory Service (PAS) which will be engaging with Councils on their COVID-19 response, including on updating the position with individual LPAs.

Getting started – validating applications

Half of authorities say they are able to validate applications on a ‘business as usual’ basis, and a further 41% said they can with limitations and/or delays. Many emphasise that the best way to minimise delays is for applicants to submit is electronically. Only 2% of authorities state they are unable to validate applications altogether, but it is possible that this will change. Overall, this is a positive picture for applicants in almost all areas.

Going public – publicity requirements

There are a number of ways authorities fulfil their statutory duty to publicise and consult on planning applications – those already operating a primarily electronic-based process mostly report little or no impact on procedures and are operating business as usual. In fact, nearly half– 45% - are again operating on a ‘business as usual’ basis. For those which expect some disruption, it is possible that this will improve over time as Councils get more clarity around the regulations and come up with workable solutions. One common solution – in place in almost one-fifth of Councils (and entirely consistent with the legal requirement) – is to request that applicants/agents put up site notices, which will inevitably help keep the application process ticking along.

Decisions, decisions – committees and decision-making

With increasing numbers of Councils already using online platforms to stream their committee meetings, undertaking these virtually has become the natural solution for many, including Birmingham, Bristol, Exeter and Liverpool. Other Councils have opted for delegation to officers (or selected/senior officers) with some input from members (so called ‘Delegation +’).

In time, it is likely that most other authorities will have moved to ‘virtual’ committees, and we can expect increased certainty on decision-making protocols in the near future from those where firm plans are not yet in place. Key matters to be resolved will be how far Councils accommodate their previous practices for members of the public to speak at committee as well as to view proceedings.

Getting personnel – redeployment

Our research finds that in most Councils, all or the vast majority of planning staff are remaining in their roles. Over half of Councils have not yet redeployed any planning staff, but in a small number of areas this was under review. One third of Councils have redeployed 25% or less of their planning staff, and others have redeployed some staff on a voluntary and/or part-time basis. Again, this is an overall positive picture for planning teams, as the majority of Councils maintain most if not all of their staff presence.

Looking to the future – local plans

The effect on plan-making will depend heavily on what – if any – consultations are planned for the near future, and how consultations are currently carried out. Of authorities which do have consultations planned, it is approximately a 50:50 split between those expecting business-as-usual and those expecting delays. For authorities reliant on public (in person) consultations, a move to online consultations will inevitably help minimise delays, but this could carry both practical and political issues.

Final thoughts

We are now inevitably in a period in which Councils are ironing out new procedures and working arrangements – much as the business community has been doing - but many appear to be operating planning services on a ‘business as usual’ basis. Many already have the technology in place to support home-working, processing applications and decision-making, and these systems need only be extended or implemented to allow continuation of business. The situation is no doubt helped by the fact that most planning departments appear to have retained most, if not all, of their staff. The overall picture is a positive one, which will likely improve in time, helping keep (albeit, at a somewhat slower pace than usual) the planning system moving.

Consultation on Historic England’s updated tall buildings advice

Amy Booth 24 Apr 2020

Tall buildings have become an increasingly common and sometimes contentious feature of the planning system. They can successfully fulfil a number of roles such as contributing to housing provision, improving townscape and acting as landmarks. Their contentiousness can arise from their effect on heritage assets and this is a common consideration in planning applications. Since Historic England’s advice on tall buildings was last updated more than four years ago in 2015, it is not surprising that the opportunity is being taken to review this as there have been changes to policy and the nature, location and number of applications for tall buildings.

As noted in the draft advice, tall buildings are not a new feature and the definition of tall is relative; St Paul’s Cathedral was the tallest building in London for hundreds of years and the Eiffel Tower and Empire State Building were both at one time the tallest buildings in the world. St Paul’s Cathedral is now a key consideration of views management guidance and protection in London and so tall buildings, old and new, form part of our historic and built environment legacy. This is reflected in the statutory protection of key tall buildings through listing; examples include the Grade II* listed Trellick Tower and Grade II listed BT Tower in London and Grade II listed Rotunda in Birmingham.

Historic England’s website states the updated advice will be issued in the summer and so it will shortly become a material consideration in many applications for tall buildings and Historic England (HE) officers will inevitably use it as a guide when giving pre-application advice or responding to planning applications and local plan submissions as part of HE’s role. The consultation therefore gives an insight to HE’s approach in assessing tall building proposals and policies, subject to finalisation, and the advice will guide heritage professionals and decision makers throughout England.

The following are some key points to be aware of in the draft updated advice and our commentary on where it could go further.

1. Case studies of historic cities

Probably one of the most noticeable developments in tall building proposals in recent years is that they are no longer the preserve of London.

Rightly so, the draft advice recognises this and makes reference to examples outside of the capital. However, the key case studies in addition to London are Oxford, Cambridge and York. Although these are key historic cities, they are not representative of the variety of historic areas and buildings across the country. Practical case studies of successful examples of tall buildings would have been helpful.

2. Expansion of the scope of what constitutes a tall building?

The reinforced assertion in the draft advice that whether or not a building is considered tall and the threshold for this depends on the local context, is welcome and allows for clarification and definition in local plans and policies.

However, the same section of the consultation refers to “a building in a hill-top location, or on the crest of a ridge of higher ground, may gain prominence and an appearance of height.” This suggests the advice relates not only to tall buildings but those in high or prominent locations. This particular advice note does not seem the appropriate place for such buildings; Historic England already has guidance on the effects of development on the setting of heritage assets and such buildings would be appropriately considered through the methodology this promotes. There are unique considerations and effects that tall buildings bring, that those in prominent or high locations do not; the two should be distinguished.

3. Increased emphasis on the importance of design, context and of a plan-led approach

This reflects the increased focus on these areas in national guidance. A plan-led approach and definition of tall building zones, which consider the effects on heritage assets, provide greater clarity to decision-makers, developers and residents and can help ensure sensitive development in the historic environment. However, as these issues, such as the components of good design, are dealt with at length in other guidance, they could be cross-referred in the advice rather than considered in detail.

HE’s recommendation that there should be criteria to assess speculative proposals in places where tall building development is likely, but there is a lack of allocations or areas identified for tall buildings, seems pragmatic.

4. The role of technology

The draft advice refers to the increasing range of technical tools that can assist all stakeholders in assessing tall building proposals, such as 3D models. Until fairly recently this type of analysis was mainly requested by councils in central London but now is an increasingly common request elsewhere.

Advice on when such tools are likely to be required would be helpful, to be proportionate to the scheme and potential effects. The draft currently makes a blanket suggestion for the use of 3D models, virtual reality headsets and Accurate Visual Representations, but these will not be necessary in all tall building cases; a ‘tall’ building in some contexts will be relatively low and can be understood from application drawings, photographs and technical analysis. This could be better framed in the guidance as ‘where available/ appropriate’.

Which leads on to…

5. A missed opportunity to emphasise proportionality in assessment and approach

The consultation makes reference to proportionality but this could be emphasised further. HE’s advice on assessing effects on the setting of heritage assets has a helpful reference to the importance of scoping to minimise the need to assess very large numbers of heritage assets, including for tall building proposals; reinforcement of this approach would be particularly helpful in this advice note.

Tall building assessments clearly have the potential to cover a wide area and repetitive and unnecessary assessment is not in anyone’s interest. A well-considered scoping exercise with the local authority can ensure that assessments are targeted and focused on where the important effects are likely to take place, aiding informed decision-making. This also relates to the level and amount of supporting information which is required to accompany applications, particularly when the number of technical tools is increasing.

Summary

Overall, the draft advice should be seen as an evolution of Historic England’s position. There are still opportunities for the advice note to provide more specific and practical advice, particularly in the section on assessing proposals, to ensure the sector has a proportionate and comparable approach. The space dedicated to checklists for applications and design considerations, which are covered in numerous other places such as policy and validation requirements, would be better spent on targeted historic environment advice that can be used as a practical guide by all those involved in the design and assessment of tall buildings.

The increased focus on the role of development plans in relation to tall buildings – notably with regard to a strong evidence base - indicates that Historic England recognises that tall buildings are here to stay, and that the response needs to be led at a local level to ensure tall buildings can make a positive contribution to the built and historic environment. The combination of a plan-led approach, focus on design and proportionate and informed assessment supported by the most recent technology where necessary, should result in just this.

COVID-19: Testing times for housing delivery - hawks vs doves

Matthew Spry 15 Apr 2020

Housing land supply and delivery may not be top of the Government’s current list of COVID-19 priorities, but those in planning and development must quickly reflect on the likely significance of its impacts:

the complete cessation for several weeks of construction activity on most major housing sites;
marked delays in planning decision making and plan making; and
an economic downturn that the OBR estimates could feature a 35% reduction in GDP[1], with obvious consequences for future strength of the housing market.

This blog looks at the implications of COVID-19 for five-year land supply (5YHLS) and the housing delivery test (HDT), and questions whether the planning policy response should be that of the 'hawk' (aggressively imposing the 'tilted balance' to boost supply) or the 'dove' (relaxing the rules to reflect the unavoidable nature of the current crisis).

Five Year Housing Land Supply

COVID-19 will impact on the ability of many local planning authorities (LPAs) to maintain a 5YHLS. Just last week, the Inspector at a recent appeal in Wokingham[2] justified a potential adjustment to its 5YHLS calculation:

“The Covid-19 pandemic is likely to have implications for the housebuilding industry as with other sectors of the economy. The evidence indicates that a number of developers are temporarily closing their construction sites to protect employee and customer welfare. For those remaining open, the lockdown will impact on the availability of support services. Customer confidence is also likely to be reduced with a consequent effect on the buying and selling of property.

The Appellant has concluded that the effects would be felt for a 3 to 6 month period, which does not seem unreasonable. On that basis the conclusion is that a further 168 dwellings should be removed from the trajectory to take these factors into account. Whilst it is contended that this is an optimistic assessment, it is equally possible that a bounce back will occur once the crisis ends. Indeed, it is reasonable to surmise that housebuilders and their suppliers will be keen to rectify losses if it is possible to do so.” (DL 109-110)

Perhaps LPA 5YHLS positions may not be dramatically degraded by COVID-19, and in some cases could even improve: for example, where the backlog of units undelivered on stalled construction sites is simply added to the maintained pipeline of future sites, where there is a flow of new permissions coming through and - in situations where there is no local plan – where any shortfall (past under-delivery) is ‘wiped clean’ at the start of each monitoring year rather than added to the future requirement.

However, that is not a given. A more reflective view highlights a number of substantive risks:

1. The immediate economic impacts will be very acutely negative, and however strong and quick the rebound, there are likely to be consequences over a longer period, for example:

a. Ongoing challenges for the capacity of the construction industry, including in supply chain and availability of labour for some housebuilders;

b. Changes in the corporate composition of the development and construction sector, if some housebuilders or developers run out of funds;

c. reduced consumer confidence in areas most affected by economic downturn, with a slower rate of sales and/or downward pressure on values[3] in situations where housebuilders are under pressure to maintain sales rates for cash flow reasons.

2. This will unwind the viability of some existing permissions and allocations, leading either to the stalling of sites until the market returns to pre-COVID-19 levels, or the need to revisit existing s.106 commitments or change mix of type and tenure;

3. The lapsing of unimplemented permissions, unless the Government follows the example of Scotland[4] and introduces legislation to extend the life of some permissions nearing expiry;

4. There will be delays to some local plans, including those well advanced and at examination, with impacts on release of land reliant upon allocation in adopted plans; and

5. For areas without an up-to-date plan, the housing requirement figure in the 5YHLS calculation may change in the medium term as a result of adjustment in the ratio of median house prices to workplace incomes (this ratio is used as part of the market signals uplift in the standard method for local housing need)[5].

The NPPF requires sites in a 5YHLS to be ‘deliverable’ and for those in category b)[6] the realistic prospect of housing completions within five years should be demonstrated with ‘clear evidence’. COVID-19 is a planning force majeure which means previous deliverability assumptions in recent Annual Monitoring Reports (AMRs) cannot be taken as read. At minimum, LPAs will need a comprehensive due diligence of their most recent 5YHLS assessments to ensure their judgements on site deliverability remain up-to-date. A failure to keep evidence robust and up-to-date[7] could mean many LPAs will fail to demonstrate a 5YHLS.

Housing Delivery Test

Part of the 5YHLS calculation is the buffer, which is ordinarily 5% unless the Housing Delivery Test[8] (HDT) results are below 85%, when it increases to 20%. From November 2020, an HDT result below 75% will trigger the application of the NPPF’s ‘tilted balance’ – the presumption in favour of sustainable development - in para 11 d), which increases the prospect that permission should be granted for applications involving the provision of housing.

The HDT results due in November 2020 will measure housing provision in the three years to the end of March 2020, which in practice means the impact of the COVID-19 shut down will be de minimis (two weeks out of three years, around 1%).

However, for the next HDT results due in November 2021, the consequences of the shutdown will be more significant, equivalent to several weeks (probably months) of output immediately impacted. A lockdown of, say, 10 weeks would be 6-7% of the time available for construction activity over a three-year period (significant but not overwhelming), but the reality is that it will take longer for many mothballed sites to be opened back-up and construction resume, with a further suppression on completion rates if the market is depressed over a sustained period. If this year does contain several fallow months of delivery, it will influence the HDT results until November 2024, when the 2020/21 monitoring year drops off the end of the three-year assessment period.

The 2019 HDT results saw only eight LPAs fall below the (transitional, 45%) threshold for application of the presumption in favour of sustainable development and a further 83 had a 20% buffer. If COVID-19 effects are as significant in 2020/21 as we might fear, the November 2021 HDT (and in subsequent years) will mean many more LPAs become subject to the ‘tilted balance’.

What should be the policy response?

COVID-19 was unforeseeable; nobody in planning or development is at fault for its immediate impacts on housing delivery. In consequence, many LPAs will feel a failure to demonstrate a 5YHLS or achieve the necessary HDT results means they are being unfairly ‘penalised’ by the granting of permissions for housing on unallocated sites[9].

So, what is the appropriate policy response to the likely future crunch in housing delivery?

A planning ‘dove’ might say the Government should cut LPAs some slack for the exceptional circumstances of COVID-19 – perhaps by temporarily reducing the HDT thresholds or relaxing the requirement for a five-year land supply? But by how much? And what if the economic downturn and recovery is uneven between places?

The planning ‘hawk’, in contrast, would advocate that:

a gap in housing delivery will mean real households being denied real homes;
housing supply (and the economy) requires a significant boost to delivery; and
applying the tilted balance should be part of the solution, to help bring forward new housing sites where the downturn is ‘priced-in’ to their viability.

The hawkish approach – the tilted balance, with significant weight given to the need to boost the supply of new housing – was applied with vigour between 2012-15 and helps explain the high level of housing completions over the past three years.

How does the hawk reconcile with the dovish concern about fairness? The answer lies in the fact that the ‘titled balance’ is not applied in isolation – a point recently made plain by Mr Justice Holgate in the High Court[10] - and in the presence of HDT Action Plans[11] (which all authorities must produce if their HDT falls below 95%[12]).

The Elphicke-House report[13] gave lie to the idea of LPAs as passive players in housing supply, and much has been made[14] of the renewed appetite of Councils as landowners and house builders, with tools to intervene directly in the market. There will be many positive things local authorities can do to boost supply: identifying new sites, being flexible on policy requirements in response to changing viability, intervention in the land market, funding or direct housing provision. The COVID-19 crisis should stimulate positive activity on HDT Action Plans for all LPAs over coming months, irrespective of their most recent HDT results.

In applying the tilted balance of NPPF para 11. d) to an application for residential development, and considering how much weight should be attached to the benefit of new housing when there has been a drop in supply, it would be open for the decision maker to take into account how far the LPA’s HDT Action Plan contained proposals that would in any event prove effective in boosting future levels of housing supply in response to the COVID-19 shortfall.

Viewed through this prism, the HDT and 5YHLS are seen not as a penalty but as monitoring tools to help planning authorities exercise their true role as housing delivery enablers, working in partnership with developers and helping plot a way through these challenging times.

[1] OBR coronavirus scenario, 14^th April 2020[2] APP/X0360/W/19/3238048, Land north of Nine Mile Ride, Finchampstead, Berkshire, 9^th April 2020[3] Para 1.29 of the OBR’s Coronavirus scenario includes an assumption that RPI inflation will be affected by lower mortgage interest payments and lower house prices.[4] In sections 8-10 of Schedule 7 of the Coronavirus (Scotland) Act 2020[5] The impact of this will be positive or negative depending on whether the fall is greater in house prices or incomes. In any event, the change will not be immediate due to the time lag in data.[6] Defined in the NPPF as where a site has outline permission for major development, is allocated in a development plan, has a grant of permission in principle, or is identified on a brownfield register,[7] As required by the PPG ID:68-007[8] The HDT measures the number of net additional dwellings in each local authority area against the number of homes required. Its results are intended to be published in November of each year, assessing the position in the three-year period up to 31^st March that year.[9] The question of whether ‘penalties’ should be imposed on LPAs for something ‘outside of their control’ is not new. The presence or not of ‘persistent under-delivery’ in the 2012 NPPF was often contested over whether it was ‘fair’ to impose a 20% buffer to 5YHLS if the historic shortfall was due to a weak housing market. More recently, some critiques of the HDT base their complaint on the idea that housing under-delivery is the responsibility of housebuilders rather than local authorities. [10] Gladman Developments Ltd v Secretary of State for Housing, Communities and Local Government & Anor [2020] EWHC 518 (Admin) (06 March 2020)[11] Guidance on HDT Action Plans can be found in the PPG ID: 68-047 – 054 and via the Planning Advisory Service [12] As required by NPPF para 75.[13] The Elphicke-House Report - From statutory provider to Housing Delivery Enabler: Review into the local authority role in housing supply.[14] See, for example, the research by the RTPI

Planning matters

The High Street isn’t dead, long live the High Street #1

Business as (un)usual – how is the planning system holding up?