Planning matters

The UK has committed to Net-Zero carbon emissions by 2050. Transport is currently the largest carbon emitting sector of the UK economy, responsible for 27% of total UK greenhouse gas emissions, and so transition to electric vehicles (EVs) will be one of the most important actions to achieve this target.

In May 2019, the Committee for Climate Change (CCC) suggested that all new vehicles should be electrically propelled by 2035, if not sooner, to achieve the Net Zero target. Following this, in November 2020, the Prime Minister announced as part of the Government’s 10 point plan for a green industrial revolution, that the sale of new petrol and diesel cars would be phased out by 2030 and that all new cars and vans would be zero emission by 2035. This target was then reaffirmed at COP26 in November 2021 when the UK Government alongside other countries, cities, manufacturers, and others committed to the 2035 target for leading markets and globally by 2040. 

But how to get there?

Great strides are already being taken to achieve this EVs ambition with a variety of initiatives employed to encourage the uptake of EVs. For example, in July 2021, alongside the transport decarbonisation plan, the Government published a 2035 delivery plan which outlines the policies and investments the Government is taking to support the transition to zero emission cars and vans. This includes exemptions from Vehicle Excise Duty (or car tax as most of us know it) and favourable company car tax rates continuing until at least March 2025 alongside an investment of £1.3 billion to accelerate the rollout of charging infrastructure on motorways, on streets, in homes, and in workplaces. Meanwhile, others are also working hard on strategies to ensure that the network grid itself can service the uplift in electricity demand from EVs as they become more common. Another example is ensuring additional capacity for battery manufacturing that are critical to electric cars. Lichfields recently played a central role in securing planning permission, on behalf of Envision AESC UK Ltd, for a new Gigaplant capable of producing world-leading lithium-ion batteries for more than 100,000 EVs per year at the International Advanced Manufacturing Park (IAMP) in Sunderland. Better infrastructure and extending battery range are key to dealing with issues of ‘range anxiety’ which has been holding EV car ownership back.

From a planning and development industry perspective, much of the focus has been on ensuring new development schemes are fit for purpose now and in the future. Most Local Plans have for some time required that car parking provision within new developments includes a proportion of EV spaces, alongside passive provision for future conversion. However, the Government has recently announced its plans to accelerate the installation of electric charging infrastructure across the country. In November 2021, the Government announced what it refers to as ‘world leading regulations’ requiring that new homes and buildings such as supermarkets and workplaces, as well as those undergoing major renovation, install EV charge points from 2022. The details of this are still emerging but reportedly this will ensure up to 145,000 extra charge points will be installed across England each year, helping ready communities for the all-electric future.  

But what about existing communities? In the zero-carbon discourse generally there is increasingly a recognition of the importance of retrofitting existing buildings and communities to ensure they are also fit for purpose for the net zero carbon future. A case in point is in the City of Westminster, where as part of its 2040 Climate Emergency Action Plan, it is planning to deliver 1,500 charge points across the city in 2022. Another example is Cotswold District Council which has prepared a Net Zero Carbon Toolkit which includes a section on retrofit to help homeowners looking to implement energy efficiency measures, including steps to plan for EV charging.

For individual homes or property assets, permitted development rights can be used to install EV charging infrastructure which meet certain size and height conditions. Schedule 2, Part 2, Class D of The Town and Country Planning (General Permitted Development) (England) Order 2015 (as amended) states that planning permission is not required for the installation of a wall mounted electrical outlet for recharging of EVs as long as the area is lawfully used for off–street parking. In addition, Class E of the Order allows the installation of an upstand with an electrical outlet mounted on it. Increasingly we are helping our clients that manage existing assets such as shopping centres and industrial parks review the use of these permitted development rights or secure planning permission for charging points where permitted development rights cannot be used.

There is still much work to be done. For example, these permitted development rights cannot be used by those who live in a listed building and so planning permission and listed building consent is needed. For some this will be a hurdle too far and so as an industry we need to find a way to make this easier for those affected to embrace EVs whilst protecting the historic environment from unintended harm where listed buildings are concerned. Similarly, for those who don’t have the privilege of off-street parking, alternative solutions need to be found. In some cases, such as in Brighton and Redbridge, lamp post charging points are available but demand in the future is likely to far outstrip supply, and so other options are likely to be needed. On a broad scale, this could include the redevelopment of petrol stations, replacing petrol and diesel pumps with EV charging points alongside the development of entirely new infrastructure stations. In many rural communities, these stations would provide an essential top-up service alongside associated shopping facilities.

Infrastructure planning has always been a big part of our work over the last 60 years, whether that’s been assisting with obtaining planning permission for Stansted Airport or our work on new Woodsmith polyhalite mine, the deepest mine in Europe. EVs present an entirely different set of issues and challenges, potentially affecting every street and home in and beyond the UK. The car industry has got the bit between its teeth now with a rush of new models and much extended battery range. The Government has a plan and whilst it’s not clear how it’s all going to be implemented, there is already much momentum behind EVs. Whilst much of the focus has been on ensuring new development schemes are fit for purpose, there is still work to be done to fully embrace EVs and help realise our net zero carbon future.

 

Shortly after last week’s Spring Statement (see our summary blog), the Government launched the second round of the Levelling Up Fund (LUF), with an updated prospectus inviting eligible applicants to submit bids by Wednesday 6th July.

The second round follows the same criteria and investment themes as applied in the first round, which awarded £1.7 billion of the total £4.8 billion that has been allocated for the LUF. Our earlier analysis of Round 1 awards revealed that first round funding allocations were weighted towards northern parts of the country and the Midlands, but with some notable exceptions in the form of the North East (which has been awarded a much smaller share than its neighbouring regions) and the South East (which secured almost as many successful first round projects as the North West). There was also a particular focus on town centre regeneration projects, equivalent to 57% of projects and 53% of total investment value awarded.

A significant change in this second round has been the addition of 19 local authorities moving up into Priority Category 1, and 14 local authorities moving to Priority Category 2. These changes are the result of an update to the ‘Index of Priority Places’, which the government uses as an overall measure of ‘need’ for levelling up, whereby Category 1 has the greatest priority. This reflects that the Index has been updated using the latest available datasets. 

The core function of the Index to measure places' need for investment based on the scope of the Fund's investment priorities (unchanged for the second round) and considers the following:

• Need for economic recovery and growth (considering productivity, skills, and unemployment)
  
  
• Need for improved transport connectivity (England only)
  
  
• Need for regeneration (considering commercial and dwelling vacancy rates) (England and Wales only)

The original Index used the latest year or point-in-time estimates of places' characteristics, which provided a 'snapshot' of their level of need. However, since the original Index was developed more recent data has been published showing the sudden economic impacts of the Covid-19 pandemic in certain areas across the UK.

The potential problem with updating the Index is that the sudden and significant impacts of Covid-19 may have caused temporary fluctuations in the Index's underlying data for some places, and that may not be fully representative of the places' longer-term levels need. However, the Department for Levelling Up, Housing and Communities (DLUCH) has sought to counterbalance this by using two-year averages for all metrics where the updated datasets cover the post-2019 period. Using two-year averages instead of the latest year or point-in-time data provides a less volatile picture of places' level of need while still capturing Covid-19 impacts where they remain meaningful.

As a result of the updates to the Index, the scores for individual places have changed relative to the first round, and some have moved category. It is emphasised within the prospectus that no local authorities have been allowed to move down to a lower category despite this update. Also, the updated Index accounts for local government restructuring in Northamptonshire, resulting in seven district councils merging into two larger unitary authorities (West Northamptonshire and North Northamptonshire). The updated index categorisations and those authorities which have moved categories are shown in Figures 1 and 2.

Of the local authorities that have moved up to Priority Category 1, the majority (14 out of 19) are located in the north and Midlands, two are located in Wales (Gwynedd and Vale of Glamorgan), and three are within London (Hackney, Waltham Forest and Brent). On the other hand, more than half (8 out of 14) local authorities that moved up to Priority Category 2 are located in the south of the country, three of which were London boroughs, including Hounslow, Tower Hamlets and Redbridge.

Taken overall, the Index now allocates 139 local authorities to Priority Category 1, 117 local authorities to Priority Category 2 and the remaining 107 local authorities to Priority Category 3. The results of Round 1 show that these categorisations are important – our analysis indicated that some 60%  of successful first round projects were located within Category 1 local authority areas, amounting to £1.2 billion of the total £1.7 billion awarded. However, lower priority areas still received over £423 million.

With the Spring Statement not allocating any further funding towards levelling up, and the arrangements for the UK Shared Prosperity Fund still to be confirmed (Government has indicated further details will be published this spring), LUF Round 2 represents a significant and more immediate opportunity for local authorities to access funding in support of local projects. Some £1.7 billion remains available to be allocated.

Lichfields has been working with local authorities and scheme promoters across the country to help develop bid proposals and to prepare the necessary supporting business case and due diligence. To find out how we might be able to support, please do not hesitate to get in touch.

 

As Rishi Sunak presided over today’s Spring Statement, the government’s last fiscal event – the Autumn Budget and Spending Review – felt like something not just from a different season, but a different era.

Much has clearly changed in the six months since last October; first, the Omicron variant prolonged the effects of the Covid-19 pandemic over the winter, and second, the war in Ukraine has created humanitarian and geo-political impacts with far-reaching economic consequences without parallel in recent times. The combined effect of these is borne out by the latest figures which show that the UK economy contracted again (briefly) in December 2021 as the Plan B restrictions weighed down on activity, and forecasts published today by the Office for Budget Responsibility (OBR) were revised down from 4.9% to 3.9% for 2022, and slowing further to 1.8% in 2023 as the post-pandemic ‘bounce back’ fades.

Notwithstanding these factors, so far business confidence has generally held up well and the labour market remains buoyant. Better weather, longer days and the absence of Covid restrictions also give reasons for optimism. Consumer sentiment is, however, showing some signs of faltering in response to the squeeze on real household disposable incomes, and there’s a widespread expectation that the housing market – so often a barometer for the wider economy as a whole – will cool off as the year progresses.

Inflation driven by rising prices for global energy and tradable goods (and the UK being a net importer of both) will create strong headwinds for the foreseeable future, and even the Bank of England recently conceded there is little that monetary policy can do about this in the short term at least. There’s been some relative improvement in the public finances, but civil servants at HM Treasury know that fortunes can change quickly and servicing government debt is becoming more expensive.

So with things finally balanced, in recent weeks the Treasury’s official position has been that the Spring Statement would be unapologetically “policy light”. At the same time, Sunak has been busy managing expectations by reminding us that government spending alone can’t provide for all eventualities. But it was inevitable that demands would be made for the Chancellor to help cushion the impending cost of living crisis and to help bolster the economy in uncertain times – to which he responded with immediate measures announced to temporarily cut fuel duty, raise National Insurance thresholds from July, introducing zero VAT ratings for some energy efficiency measures and an increase in the Employment Allowance, amongst others. Finally, Sunak wanted to deliver on his political conviction to be seen as a tax-cutting chancellor by announcing a cut to the basic rate of income tax from 20% to 19% from April 2024. However, what savings all these measures will deliver for households in real terms remains to be seen, and the OBR has concluded that the net effect will still see an increase in taxes in the long-run.

It wasn’t particularly the time or backdrop to headline any new policy decisions on planning, housing or regional growth measures. There was, however, a re-statement of the government’s priorities to promote economic growth and increase living standards. These comprise tackling some of the fundamentals that have held back productivity levels:

-  Capital — cutting and reforming taxes on business investment to encourage firms to invest in productivity-enhancing assets.

-  People — encouraging businesses to offer more high-quality employee training and exploring whether the current tax system – including the operation of the Apprenticeship Levy – is doing enough to incentivise businesses to invest in the right kinds of training.

-  Ideas — delivering increased public investment in R&D and doing more through the tax system to encourage greater private sector investment in R&D.

A broader question is where this now positions the government’s “levelling up” agenda following the White Paper published last month. With progress having been stalled by the pandemic, it is firmly set as a flagship policy across Whitehall and government wants to make a visible down payment on its promises to voters ahead of the next general election. While the Spring Statement confirmed the launch of the second round of the Levelling Up Fund (£4.8 billion for local infrastructure projects, of which £1.7 billion has already been allocated), there remains no extra spending available over and above what had already been set out in the Autumn Budget.

In an interview to coincide with the conclusion of his six-month tenure as head of the government’s levelling up task force, Andy Haldane acknowledged that the impact of the rising living costs we are now seeing will fall disproportionately on those in the “left behind” areas that the policy agenda is intended to help the most. But he remained clear that while achieving the 12 levelling up “missions” will now be harder, particularly by 2030 as intended, it arguably makes the very rationale for delivering on the missions themselves even more important.

These missions will soon become enshrined in legislation, holding government to account on monitoring and delivering progress in the future. So while levelling up policy is not just confined to matters of more public spending – which must work in tandem with devolution of powers to local areas and other reforms – one suspects that this is something that future budgets and spending reviews will need to return to.

In January 2021, Natural Resources Wales (NRW) introduced new tougher targets and guidance for phosphate pollution in riverine Special Areas of Conservation (SACs) across Wales. The new targets vary according to river characteristic, with maximum allowable concentrations of soluble reactive phosphorus ranging from 10-60 µg l^-1. The majority of previous phosphorus targets were in the range of 20-100 µg l^-1[1].

Phosphates are naturally occurring minerals found in human and animal waste. They are vital for plant growth – hence used in crop fertilisers – but at high concentrations in water bodies phosphates can cause dramatic growth of algae. This leads to depleted oxygen levels in the water which can be detrimental to aquatic plant and animal life. The new phosphate targets seek to alleviate these pressures on Wales’ river systems.

As a result of the new targets, it has become necessary to identify ways in which to ensure that new residential developments do not increase the nutrient load on SACs following discharge from a sewage treatment work. This has resulted in many local planning authorities (LPAs) being unable to determine planning applications for residential development in the riverine SAC catchment areas and Local Development Plan (LDP) preparations are also being stalled or delayed. The consequence of this is that housing delivery in parts of Wales has been adversely affected.

Against this context, the purpose of this blog is to provide an overview of the issue from a planning perspective and to consider the ways in which the impact of the phosphate targets on housing delivery in affected areas can be reduced.

 

There are nine Riverine SACs in Wales – Cleddau, Eden, Gwyfrai, Teifi, Tywi, Glaslyn, Dee, Usk and Wye – which can be viewed at DataWalesMap. These SACs are designated to conserve various habitats and species, including rare and threatened species. NRW’s ‘Compliance Assessment of Welsh River SACs against Phosphorus Targets^[2], details that 61% of water bodies tested within the riverine SACs failed to meet their phosphorus targets. In areas where current levels are problematic, for example the River Usk SAC where 88% of water bodies failed to meet their phosphate targets, then there is likely to be greater resistance to residential development.

The map below shows which LPAs have a Riverine SAC within their area. Of the 22 LPAs in Wales (25 including National Park Authorities (NPAs)), 12 LPAs (14 including NPAs) are affected by the new phosphate targets. These account for 84.1%^[3] of Wales by area and 44.7%^[4] of the Welsh population.

 

 

As set out above, the NRW targets means that proposals for residential development within Riverine SAC areas must now demonstrate it will not contribute to increased phosphate levels within the SAC (i.e. they must be phosphate neutral or negative when compared to nutrient levels associated with the current use of the land). Whether the site is allocated for development in the LPA’s Local Plan is irrelevant.

Guidance issued to LPAs by NRW^[5] states that every development should be considered on a case by case basis and developments should first be screened to determine whether they are likely to have a significant effect on phosphate levels. Developments that do not increase the volume of foul waste water, reduce the phosphorus load of water or decrease the volume of wastewater produced can be screened out – but very few developments are likely to meet these criteria. A fundamental issue arising is how to assess the nutrient load associated with development. NRW has not provided a calculator that can be used by developers and LPAs to calculate the level of phosphates developments will generate. This unhelpfully means that it is not currently possible to assess whether proposals would contribute to increased phosphate levels and thereby meet the targets that NRW has established.

Until developers and LPAs are able to quantitatively assess and provide mitigation for phosphates levels, many LPAs are not able to determine planning applications for housing in riverine SAC areas. This is especially true where housing and other developments propose to connect to an existing wastewater treatment works as even if these treatment works do have phosphate stripping facilities, it cannot be assumed that this will be sufficient to guarantee phosphate neutrality.

There are even longer-term implications of the targets, including significant delays in LDP preparations. For example, in January 2022 Pembrokeshire County Council announced delays to the LDP timetable including a return to the Deposit Plan stage because the LPA does not know which candidate sites located within Riverine SACs can be retained in the Plan^[6]. The new timetable for the LDP is still uncertain as it is dependent on the outcomes of research that itself cannot take place until further guidance for measuring and mitigating the impact of phosphates levels is available.

This is not a problem that is unique to Pembrokeshire; the emerging Flintshire LDP and Wrexham LDP, which are both at latter stages (examination) are also experiencing substantial delays, with Inspectors stating that the new phosphate targets had cast considerable doubts of the viability of housing sites included in the emerging LDPs^[7],^[8].

As Welsh Government is highly focussed on LDP-led development and LDPs are being delayed due to the lack of guidance surrounding the new phosphate targets, the delivery of allocated sites will also be delayed. In the meantime, the abolition of the Five-Year Land Supply policy in Wales (see Lichfields blog: TAN 1 – Gone but not forgotten) means that there are no real means by which to encourage or force LPAs to maintain housing supply in advance of LDP reviews and adoption.

Moving forward, LPAs and developers need to have a way of calculating phosphate levels of proposed developments. Carmarthenshire has just published a calculator^[9] and there is a discussion about developing an all Wales calculator. Whilst this has the potential to allow for a meaningful quantification of impacts and for planning applications to move forward, any calculations of phosphate additions or reductions into the SACs need to focus on the actual change in local population arising from new development. For example, the Natural England Nutrient Calculator^[10] applies an additional occupancy rate per dwelling of 2.4 people^[11]. This figure assumes that all new occupiers of new homes will be new to the area – i.e. that 100 new homes will increase the population by 240 people, and generate a consequential increase in nutrient output.

In reality, however, a significant proportion of residents of new homes are local to the area and will not increase the nutrient load: many people move homes within an area and existing households split, for example as grown-up children move out and form new households. A static population still creates the need for new homes and there should not be a requirement to mitigate new homes arising from existing residents as there will be no increase in phosphate loads.

The Natural England and Carmarthenshire calculators are therefore flawed in that they seek mitigation from homes required to meet the needs of the existing population. Lichfields consider that these calculators need to be revised so that mitigation is only sought from housing that meets the needs of net additional population. This is a calculation that can be readily made using population and household projections. Over-estimating the phosphate loads is detrimental to meeting essential housing needs as developers are having unnecessarily to demonstrate significant phosphate betterment and delivery of mitigation that is not required.

The resilience of river ecosystems is of crucial importance to Wales’ future, but we need to absorb the implications of the new targets now and find a way through to avoid a massive under-delivery of housing. A failure to do this could have significant impacts in terms of meeting the need of existing and newly forming households and will also have adverse economic implications. At a time when the economy is trying to bounce back from the shock of COVID and house prices have reached an all-time high we simply cannot afford to let this issue result in a long term reduction in housebuilding rates.