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Regeneration - enabling a quiet evolution?

Edward Clarke 16 May 2022
As the Government’s top political priority, ‘levelling up’ has returned regeneration policy to centre stage. After the policy strategy of the White Paper and two rounds of funding allocations, The Levelling Up and Regeneration Bill set out the Government’s proposals for the new legal framework to support and enable regeneration. The ‘Regeneration section’ of the Bill proposes the legal structures that target one of the 12 missions set out in the Levelling Up White paper that: “by 2030, people’s satisfaction with their town centre and engagement in local culture and community, will have risen in every area of the UK with the gap between top performing and other areas closing”. To achieve this ‘mission’ the Bill takes forward three elements that set out the legal framework targeting regeneration: make important changes to compulsory purchase powers to give local authorities clearer and more effective powers to assemble sites for regeneration and make better use of brownfield land a new type of locally-led Urban Development Corporation, with the objective of regenerating its area High street flexibilities – pavement licensing and ‘high street rental auctions of selected vacant commercial properties’ Each of the three elements are tackled with evolutionary tweaks that, in the main: ‘streamline, enable and simplify’ rather than revolutionise. Both compulsory purchase orders (which uses Compulsory Purchase Act 1965, Acquisition of Land Act 1981, and Housing and Planning Act 2016) and Urban Development Corporations (originally introduced to manage the development of new towns under the 1946 New Towns Act) have a storied history. Their resultant complexity is evident in the case law and amendments which have followed ever since. Evolutionary progress that reduces this complexity, by modernising and streamlining these systems is both welcomed and necessary to encourage their use. 1.   Compulsory purchase of land reforms Streamlining Compulsory Purchase Order (CPO) powers is a goal supported by most who experience the system as it is infamously an unwieldly slow and inconsistent process with the added complexity of the system’s ‘jumble of different statutes’[1]. The Governments High Street Strategy (2021) also made clear that a key part of ‘helping councils’ to take on regeneration projects would be to encourage councils to use CPO powers for land assembly, specifically for long term empty properties. The latest changes follow reforms brought forward through the Housing and Planning Act 2016 and the Neighbourhood Planning Act 2017 aimed at making the process clearer faster and fairer. As is often too easy to fall back on when commenting on planning reform, ‘the devil will be in the detail’ but this is certainly the case with CPO powers. Changes to the legal framework are necessary, but this reform will continue to be an iterative process influenced by the boldness of use and support of Government tested through case law and clarified in regulations. Seasoned observers will confirm that ‘point gourde’ valuations of land without a proposed scheme are always difficult to establish, as is the task of pricing in ‘hope value’. It is therefore welcomed that the Government have suggested a potential review of compulsory purchase law with the Law Commission. Challenges with using compulsory purchases orders will surely endure (it is rightly a heavily regulated tool) but the Bill’s focus on streamlining and modernising the orders and explicitly enabling local authorities to use CPOs more widely for regeneration projects should make a clearer case for when and how they can be used. Subsequently, incremental changes are to be welcomed on this evolutionary path. 2.   A new type of locally-led Urban Development Corporation A new type of locally-led Urban Development Corporation (UDC) - with the objective of regenerating its area and accountable to local authorities in the area rather than the Secretary of State - is also proposed. The changes proposed enable UDCs to become local planning authorities for the purposes of local plan making, neighbourhood planning and development management. Effectively this aligns them with the Mayoral Development Corporation model. They will also now be accountable to local authorities rather than the Secretary of State. These amendments potentially change the status of some UDCs whereby locally difficult, but strategically important, decisions are now scrutinised by locally elected members, rather than central Government. It will be telling to see whether this will lead to strategic decisions becoming more easily passed to UDCs or their strategic powers neutered by the realpolitik of local decision making. The Government clearly see development corporations as a useful tool for delivering large or complex regeneration and housing schemes. The use of arm’s length bodies to co-ordinate and drive through strategic regeneration projects is not new but can be useful. The legislative changes to make their use more straightforward are welcomed. However, it remains to be seen whether making them more ‘locally led’ will lead to more use and / or diluted outcomes, but it is perhaps the Government’s backing of their use that will be the more significant shift. 3. Changes to the high street – ‘high street rental auctions of selected vacant commercial properties’ and pavement licensing To support high street and town centre regeneration, the Bill proposes a new power to instigate “high street rental auctions” of selected vacant commercial properties in town centres and on high streets which have been vacant for more than one year. Under this power, the local authority can designate a street or specified area as locally important because of the concentration of high street uses (including shops, offices, restaurants and light industrial but not warehouses). Once designated, if a unit on that street or within that area is vacant (unoccupied for a year) and the local authority considers occupation would be beneficial to the local economy, society or environment – then they can instigate a rental auction of the property. There will be further regulations that set out the auction process in more detail and secondary legislation which set out the terms of the letting contract. The initial industry response[2] has been one of concern, questioning whether this adds to risk for investors already reeling from multiple challenges to high street rental properties and in practice becomes a technical hurdle for landlords to consider rather than a ‘high street shake up’ . The Bill also makes permanent the existing measures that make pavement licensing more straightforward. These were first brought in as the high street reacted to COVID but their popularity and contribution to helping the centre vitality and viability has led to this Government endorsement of the measures. Likely Effects Much commentary and analysis about regeneration inevitably comes down to funding; in this context, the changes proposed in the Bill only paint part of the picture of the Government’s plans for regeneration. However, the proposals set out in the Bill provide the legal structures that the Government believe will enable more efficient, locally led decision making on regeneration to deliver local results. Taken together, these changes are evolutionary rather than revolutionary, they are designed to streamline, simplify and improve decision making. As our recent Insight[3] highlights, the importance of effective decision making should not be underestimated or overshadowed by discussions on the ‘size of the funding pot’. If these legal tweaks achieve their aim of enabling more local authorities to make more effective decisions on regeneration – then these changes should quietly help local areas in their efforts to ‘level up’.     [1] https://www.rics.org/globalassets/rics-website/media/knowledge/research/insights/compulsory-purchase_december-2021-corrected.pdf [2] https://www.thegrocer.co.uk/property-and-planning/plans-to-force-landlords-to-let-vacant-shops-dismissed-as-gimmick/667278.article and https://www.jdsupra.com/legalnews/uk-government-commits-to-controversial-9004117/ [3] https://lichfields.uk/content/insights/levelling-up-the-routes-to-growth/

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The Planning White Paper (2020) saw the Government propose major changes to the planning system, with a focus on increasing the delivery of new housing, while ensuring new development would be well-designed and accompanied with the necessary infrastructure. Reforming the role and nature of plan-making was a key component to achieving these objectives. As a recap, the White Paper proposed that all local planning authorities (LPAs) must have up to date plans in place, while plans themselves would be shorter, simpler, and more effective. Generic development management policies would be set out in national policy, while the number of homes that LPAs should plan for would also be determined centrally. A zonal approach to planning (of sorts) was also proposed, with all land designated for growth, renewal, or protection. Local plans were to focus on setting out detailed area and site-specific requirements, making use of web-based policy maps with design codes setting out detailed design requirements for key character areas. Almost two years later and after a huge amount of speculation as to the shape and extent of the reforms, the Levelling Up and Regeneration Bill has landed. Further changes to national policy and detailed regulations are expected to come, with an overview of these (relatively substantial) changes set out in an accompanying Further Information policy paper. While the proposals for ‘zoning’ have been abandoned, and the details of a new standard method remain to be seen, many readers will be surprised at how much of the 2020 White Paper may be set to come forward. This blog focuses on the changes to development plans put forward by the Department for Levelling Up, Housing and Communities (DLUHC). Please see our other blogs which cover the other areas of planning reform and regeneration set out within the Bill.  The development plan – a change in status? The Secretary of State will now write National Development Management Policies. The purpose of this is to reduce the size of plans by removing generic development management policies which are largely the same across England, hopefully leading to greater consistency as to how these are applied in practice. The starting point for decision making, s38(6) of the Planning and Compulsory Purchase Act 2004 (PCPA), would be revised under the Bill, fundamentally changing the way planning decisions are made, by inserting the word “strongly”. Where determining applications for planning permission, decision makers would now have to give regard to the “development plan and any national development management policies, unless material considerations strongly indicate otherwise" (our emphasis). The potential policy and legal implications – intended or otherwise - of the introduction of “strongly indicate otherwise” will no doubt be discussed at length during the passage of the Bill. The Bill states that, where there is a conflict between a policy in the local plan with a national development management policy, primacy would be given to the national development management policy. The changes would give greater weight to the development plan than is currently the case, while also immediately elevating the status of national development management policies above other national policy. These national development management policies, as directed by the Secretary of State, would not be a material consideration, but would have the same weight as development plan policy. It is not yet clear what matters these national policies would cover, though heritage, Green Belt, and environmental policies such as Biodiversity Net Gain seem like possible contenders. It is also unclear as to what might be “strong reasons to override the [development] plan” [1]. The Government has said it will set out a new vision for the NPPF, “detailing what a new Framework could look like, and indicating, in broad terms, the types of National Development Management Policy that could accompany it”. This might see the NPPF being broken up into two distinct sections, with one section setting out specific development management policies designated as part of the statutory development plan, and other parts setting out national policy on plan-making, which would remain a material consideration. Getting local plans in place… and keeping them up to date Despite local plans currently being the starting point for decisions, recent research from Lichfields has revealed that only 42% of LPAs outside of London had a fully up-to-date local plan to the end of March 2022. The Government expects that shorter, simpler plans will vastly increase number of LPAs with sound plans in place that are also kept up to date. The Bill’s Further Information policy paper confirms that local plans will need to be prepared within a 30-month timeframe and will be expected to be updated at least every five years. Given the lengthy timescale it currently takes for plans to be prepared (74 LPAs have not adopted a local plan in the ten years since the NPPF was first published in March 2012), many (including the LUHC Select Committee) questioned how achievable this timeframe was when the White Paper was originally published. It may be more realistic than when proposed in the White Paper, because plan-makers will not need to contend with dealing with the zonal system the White Paper proposed. Furthermore, the existing Duty to Cooperate is expected be dropped (more below). In its response to the Select Committee’s report the Future of the Planning System, the Government has said it will also seek to “reduce the evidence burden”, as well as changing the “soundness tests at examination”. The detail of these additional changes is expected to be set out in regulations. No details have yet been published on the new standard method for assessing housing need. Understanding how this will be calculated will be crucial to the success of any future changes to the plan-making process. Allocating land for housing is a fraught process, with arguments over the suitability and deliverability of sites taking a considerable amount of time during preparation and examination of plans. The issue is particularly acute in parts of the country where land is constrained by environmental protections or Green Belt policy, which has often led to stalled plans as a result of difficult local politics, which subsequently effect the delivery of new housing and development (see our recent blog for more detail). Another major change is the Government’s intention to remove the requirement for LPAs to maintain a five-year supply of (deliverable) land for housing, providing the LPAs local plan is kept up to date. As it stands, failure to demonstrate a five year land supply (with an appropriate buffer) has led to the operation of the presumption in favour of sustainable development regardless of the local plan status of the authority, leading to many LPAs with up to date local plans also failing to demonstrate a five year land supply and the presumption applying accordingly.  The Government appears to intend this change as a carrot to encourage LPAs (particularly long term avoiders) to get their plans up to date and adopted quickly. However, many long term avoiders of plan making are Green Belt constrained and without a change to Green Belt policy (including very special circumstances) there remains little incentive for them to adopt a local plan - even with this carrot. Strategic thinking - Joint Spatial Development Strategies As mentioned above, the Government wishes to abandon the Duty to Cooperate, the legal obligation introduced via the Localism Act 2011 that requires cooperation between LPAs. Instead, new powers are proposed that would allow for at least two LPAs to produce a joint spatial strategy. This would have a similar effect to strategic role to the London Plan, albeit across much smaller geographies. Given that the proposed Joint Spatial Development Strategies are voluntary, some will question how many LPAs will choose to adopt this approach, particularly where this may require an LPA to take on the unmet need of its neighbours. That said, in areas with ambitions for growth, this could be an important tool, providing the necessary governance and decision making powers to make difficult choices on infrastructure and other cross-boundary issues - particularly if supported with financial incentives or other powers. Lichfields’ own research on the future role of Spatial Development Strategies (SDS) suggests that the London Plan has played a critical role in leading growth, while helping to secure important decisions on the future direction of travel in the capital. At the same time, the Mayor has also faced accusations of over-reach, with the latest London Plan interfering in matters deemed as non-strategic. Interestingly the Bill appears to have responded to this criticism, with proposed changes to the GLA Act 1999 to make it more explicit in defining the remit of SDSs. Supplementary plans and area-wide design codes The Bill would also provide greater flexibility as to how local policy can be brought forward. The Bill proposes a new power for LPAs to prepare ‘Supplementary Plans’, enabling a lighter touch route for LPAs wishing to introduce policies relating to specific sites, types of development, and for adopting local design codes. During a briefing on the Bill to the planning and development sector by DLUHC, Director of Planning, Simon Gallagher, suggested that this would remove some of the ambiguity of supplementary planning documents, which do not carry the same weight as policy (sometimes leading to confusion as to what these documents can and cannot do). This system would allow policies for specific sites or types of development to be brought forward more swiftly than at present. Supplementary plans would go through a process of independent examination which would be undertaken via written representations, though the Bill confirms that a hearing may be appropriate in certain circumstances. The Bill also proposes that LPAs will be required to produce area-wide design codes; these supplementary plans would allow authorities to introduce design codes that set out the “requirements with respect to design that relate to development, or development of a particular description”. In its response to the Select Committee report on Planning Reform, the Government stated these will “act as a framework for subsequent detailed design codes, prepared for specific areas or sites and led either by the local planning authority, neighbourhood planning groups or by developers as part of planning applications.” The 2021 changes to the NPPF have already sought to encourage LPAs (as well as communities and developers) to produce design codes in their areas. Codes and other supplementary guidance are currently discretionary, and the pilot design codes being brought forward with support from the Office for Place predominantly focus on specific areas within an authority, such as urban extensions, neighbourhoods undergoing significant change, and strategic regeneration sites. Area-wide codes would represent a considerable step-change. Design codes would be based on the existing framework set out in the National Model Design Code (NMDC). This provides a template to support LPAs in producing their own codes, relating to area-wide guidance, alongside instructions for specific area/development types. Figure 1.  example of area-wide guidance in the NMDC. (P32) Local authorities may wish to set more detailed area-specific parameters on matters such as building heights, density and materials, though these would likely be targeted at specific character areas rather than being authority-wide (e.g. high-rise, town centre, urban neighbourhoods, industrial areas, suburban). The changes proposed would represent a definite shift in the range of work undertaken by many LPAs, and would likely require some in-house design capacity and expertise. Previous research from Public Practice suggested that 80% of LPAs considered they did not have the in-house capacity or skills required to deliver the White Paper proposals, while the average estimated costs of preparing, consulting on and adopting a design code for an area of approximately 1ooo homes was found to be £138,636. Where local authorities fail to produce area-wide codes, provisions in the Bill allow for the Secretary of State to intervene and direct the authority to comply with any required steps. Neighbourhood Plans (and Street Votes?) Neighbourhood Plans would be retained under the Bill, though amendments proposed to S38B of the PCPA provide further detail on the scope of what neighbourhood plans can include. This includes matters such as the level of affordable housing, infrastructure requirements, as well as the design and characteristics of development. The Bill would also seek to prevent neighbourhood plans from restricting housing related development, where this is proposed in a wider local development plan. The Bill also proposes a new tool for neighbourhood planners, allowing groups to produce a ‘neighbourhood priorities statement’ (NPS). The Department has stated that this “is designed to be a more accessible, cheaper and faster way for communities to get involved in neighbourhood planning, particularly in areas that currently have low levels of take-up. NPSs will allow communities to identify key priorities and preferences for their area and may potentially act as a launchpad to preparing a full neighbourhood plan, design code or another community initiative. NPSs would also be used as a formal input to the local plan process with local authorities required to consider them”. The most hyped element of the reform by the media was no doubt the new ‘Street Vote’ provision. This is intended to “allow residents to propose development on their street and hold a vote to determine whether it should be given planning permission”, this would allow for the intensification of existing residential areas, with proponents suggesting this would be based on locally popular design. Given its fanfare, there is surprisingly little to say on this measure yet, with the explanatory note to the Bill stating that the clause is designed as a placeholder for a more substantive clause which may follow later. An existing Streets Vote Bill had already been put before Parliament as a Private Members Bill, on the back of the Policy Exchange report Strong Suburbs; both provide an idea of what is likely to come. ­Initial thoughts While the Government is yet to publish a formal response the White Paper consultation (it is imminent), it is clear that it has listened to its own backbenchers at least. Planning will continue to be presented as a local affair, and there is now greater expectation that decisions on new development will be plan-led. However, until the scope and nature of National Development Management Policies is known, the extent to which local plans are truly local, beyond site allocations, design codes and detailed area specific polies, will not be known either. Plans will be simpler and shorter, with the process of producing them to be expedited. The proposals would also provide additional flexibility as to how new policies are brought forward, while also granting additional strategic powers where groups of LPAs consider this expedient. These are all commendable objectives that would go some way in making the system more user-friendly. There are a lot of moving parts, however, particularly when other reforms such as the infrastructure levy and the devolution provisions are added to the mix. Previous experience of planning reform has shown there is a real risk of inertia as LPAs and other parties get to grips with the changes. Hopefully a better funded system (through the proposed increase in planning application fees) may assuage this but, by itself, that is unlikely to be enough for LPAs to resource the suite of changes required. Further, many will rightly question whether the changes have let some authorities off the hook, enabling them to avoid the difficult decision of allocating sufficient land to meet local needs. You will hear little on housing numbers in any recent statements from Gove, and perhaps this is part of the Government’s strategy. In any event, the changes are probably more than a year away. The Bill will first need to make its passage through Parliament before being enacted – the Government is targeting Royal Assent by the year end or early next. Many of the provisions will also require changes to national policy and additional regulations brought forward via secondary legislation, as such there is still time for things to change considerably.    [1] As referred to at para 50 of the Explanatory Notes to the Bill HM Government, Levelling Up and Regeneration Bill, Further Information policy paper    

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