Planning matters

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:

1. 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
   
   
2. a new type of locally-led Urban Development Corporation, with the objective of regenerating its area
   
   
3. 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.

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.

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.

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.

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’.