Planning matters

As we approach the new financial year starting on 1^st April 2024, we will see a familiar acronym pass into the policy archives. April marks the official closure of Local Enterprise Partnerships (LEPs), as central government core funding ceases and their functions transfer to Combined Authorities and local authorities (and to the Greater London Authority in London).

The demise of LEPs has, in reality, been underway for some time, but was formally confirmed at the 2023 Spring Budget last March. At that time, the Chancellor announced that the Government was ‘minded to’ withdraw core funding for LEPs. This ‘minded to’ was confirmed in August 2023, prompting LEPs and local authorities to set in motion plans for the transfer of their core functions – namely providing business representation, undertaking strategic economic planning functions, and delivering some government programmes such as Growth Hubs and Career Hubs.

 

 

It represents a very different era from when the first 24 LEPs were announced by the Coalition Government in the 2010 Local Growth White Paper[1]. LEPs were designed as replacements for Regional Development Agencies (RDAs) with the intention to, “bring an end to the top down initiatives that ignore the varying needs of different areas”.  RDAs had been part of New Labour’s somewhat aborted policy of establishing regional government during the 2000s, and dismantling this became an early target as part of the Coalition Government’s austerity programme in 2010 and a key part of the localism agenda[2]. The Government’s ambition was to “rebalance our economy, ensuring that growth is spread and prosperity shared” and committed to a £1.4 billion investment in a Regional Growth Fund over 3 years which LEPs would help administer. However, by comparison, the RDA budget had been £2.3 billion annually.

The eventual 39 LEPs covered all areas of England and operated as non-statutory bodies to promote economic growth. They functioned as business-led partnerships with additional representatives from local authorities, as well as academic and voluntary institutions. LEPs were designed to be flexible partnerships whose geography reflected the natural economic areas of England. They were never defined formally in legislation, but most operated as corporate entities with a specified accountable body. This meant that local areas had considerable discretion about the composition of LEP boards, provided they were chaired by a businessperson and at least half of their members were drawn from the private sector.

Perhaps the high point for the recognition of LEPs came in 2012 when Michael Heseltine called for a significant devolution of funding from central government to LEPs so that, “government investment in economic development is tailored directly to the individual challenges and opportunities of our communities, and can be augmented by private sector investment.”[3]

But the inherent flexibility also brought complications. In 2018 LEP boundaries were reviewed and, as part of this review, it was determined that an individual district or borough local authority could no longer be within two overlapping LEP geographies.

 

It is somewhat ironic that LEPs have now become victims in the latest iteration of the devolution agenda, which has seen resources and responsibilities gradually shifting (back) to local government. The 2022 Levelling Up White Paper[4] promised that “by 2030, every part of England that wants one will have a devolution deal”. As devolution has progressed with successive ‘deals’ being announced across the country, the role of LEPs has increasingly overlapped with that of Combined Authorities, leading several to transform their LEPs into ‘business boards’ or similar structures.

In parallel, there has been a shift to government funding going directly to local authorities rather than through LEPs (e.g., Levelling Up Fund, UK Shared Prosperity Fund), and technical skills coordination now being delivered through Local Skills Improvement Plans (LSIPs) rather than LEP Skills Advisory Panels.

While core funding from central government typically formed just 10-20% of overall LEP incomes[5], the removal of this has now triggered the majority of the remaining LEPs across England to be wound up.

A review by Lichfields has found that, of the 36 remaining LEPs, 17 are to be wound up with all functions transferred to the relevant local authorities[6]. Eight LEPs have already been absorbed into the functions of a Combined Authority, with a further two expected to be transferred into Combined Authorities from 1^st April. The Hull & East Yorkshire and Greater Lincolnshire LEPs are to become part of the Hull & East Yorkshire Mayoral Combined Authority and the Greater Lincolnshire Mayoral Combined County Authority, respectively, once their respective devolution deals are confirmed.

The Solent LEP will transition to become a private company[7] while Cheshire & Warrington LEP and OxLEP will become council-owned companies, still retaining many of their functions. The relatively small number of LEPs that will continue as a private or council-owned companies is in stark contrast to the 14 LEPs who had previously indicated their interest in continuing their functions as a private sector company during the Government’s information gathering exercise in 2023[8].

At the time of drafting, the West of England LEP had not yet confirmed its future plans, as the misalignment between the LEP and West of England Combined Authority geographies has delayed agreement on implementation plans between the parties[9].

 

As an increasing number of lower-tier authorities issue Section 114 (bankruptcy) notices amid spiralling debt burdens, an obvious concern is whether upper-tier authorities will have the capacity and resources to continue the work of LEPs over the years ahead. The Government’s information gathering exercise  highlighted that one-third of local authorities “showed a high degree of readiness to support these functions with additional funding” – but two-thirds seemingly did not. Funding for previous LEP functions and legacy projects beyond 2024/25 is subject to future government spending reviews and therefore not confirmed. For areas without devolution deals in place, a lack of dedicated funding for economic development and strategy activities may impact their ability to deliver these functions.

Even in areas with Combined Authorities or other forms of devolution, the Government’s information gathering exercise found that half of the eight Combined Authority respondents felt the withdrawal of LEP core funding would negatively impact their operations and delivery, making it “harder for the MCA to maintain a strong business voice”. Further, at the time, the four upcoming devolution deal areas were working to an assumption that the LEP core funding would be available to them, and if this were to not be available this would “lead to reduced outcomes for LEP functions”.

Despite the replacement of many LEPs with ‘business boards’ designed to continue the involvement of businesses in local decision making, the LEP Network has highlighted concern that the changes could “significantly diminish or even silence the voice of local business and damage the unique convening power that gets projects delivered, acknowledged as the hallmark of LEP success for over a decade”.[10]

Ultimately it is clear that there is no ‘one size fits all’ approach to how former LEP functions are being carried forward in different parts of England, and it will take time for the new arrangements to crystallise (much like the wider devolution agenda itself). While the report by the Labour Party's ‘Commission on the UK's Future’ supported the integration of LEPs with Combined Authorities, it also called for economic growth and prosperity plans to be developed by ‘local partnerships’ for all parts of the country including those areas not currently covered by (or seeking) devolution deals[11].

But as the last LEPs disappear, much remains uncertain in terms of readiness and resources, while central funding for local economic growth and development activities is not guaranteed over the longer-term. The government’s own information gathering exercise found that LEPs had played a positive role particularly in assisting with local economic recovery from the Covid-19 pandemic, acting as brokers between local authorities, and supporting local net zero agendas. Given these ongoing challenges and the wider need to stimulate economic growth and productivity, the inboxes of economic development teams across the country are already full.

 

  

Greater Manchester’s Places for Everyone (PfE) has been formally adopted this week, following its protracted and highly contentious evolution.  Since its inception, it has taken almost a decade for the Plan to be adopted (see timeline). The protraction in its preparation can be put down to many factors but the scale of the Plan – originally covering 10 districts [1] – and how politically entangled it has become are significant factors.

At the outset, it is important to recognise the significant achievement of the GMCA in persevering with the Joint Plan, getting it found sound by the 3 appointed Planning Inspectors and getting all 9 remaining districts to formally approve the document following the issue of the Inspectors’ Report on 14^th February.

Although this brings to an end the chapter relating to the preparation of the PfE, it is clear to see from the content of the Plan and the Inspectors’ Report that there is a long road ahead for the 9 districts in the preparation of their individual Local Plans.

From a housing perspective, the Plan sets a minimum requirement over the Plan period of 175,185 net additional dwellings (an average of 10,305 per year).  In terms of supply to meet this need, the GMCA claimed that there was sufficient supply to deliver 198,763 new homes.  Although the majority of the focus of this Plan was on Green Belt releases, the total number of units which can be delivered on these Green Belt allocations is 19,997 units, just over 10% of the total supply.  Therefore, the vast majority of housing delivered in the 9 districts over the period to 2039 will be on brownfield sites.

From an industry and warehousing perspective, the Plan sets a requirement to deliver at least 3,513,000 sq.m of new accessible, industrial and warehousing floorspace to 2039.  The district’s strategic employment land availability assessment identified a supply capable of delivering 2,070,000 sq.m plus land released from the Green Belt being capable of delivering a further 2,001,585 sq.m.  Therefore, just under half of the employment supply is on allocations released from the Green Belt.

Table 1 sets out a breakdown of the claimed supply position versus the housing requirement to 2039. At best, assuming that all the sites identified by the Councils are deliverable and developable, there is a surplus of just over 23,500 units. However, at face value that surplus masks some of key issues as the majority of the surplus is located in Manchester and Salford. 

For instance, Bolton has chosen to identify no Green Belt releases to meet housing needs in the PfE. Best case scenario, Bolton has a surplus of just 532 units which equates to a surplus in years of 0.67 and the windfall allowance in the plan is almost 3 times the surplus to 2039. To compound matters further in Bolton, it has no large-scale allocations which are planned to deliver beyond the plan period and its district Local Plan will need to plan for at least 15 years from adoption in line with para. 1.56 of the PfE.

The Local Authority with the smallest surplus in terms of housing land is Tameside.  Although Tameside has allocated land to be released from the Green Belt to meet its housing need and offloading almost 200 units per year to other districts in Greater Manchester through the PfE, the Council only has a surplus of 507 units.  This is a little over 1 years’ worth of supply.

The latest NPPF (December 2023) sets out at Para. 76 that LPAs are not required to identify and update annually a deliverable supply of sites sufficient to provide a five-year supply of housing land if their plan is less than 5 years old and the adopted plan identifies at least a five-year supply of specific, deliverable sites at the time that its examination concluded’.  Therefore, as the Inspectors have not reviewed and endorsed the Council’s claimed supply positions, in our opinion, the 9 Council’s are not protected under the provisions of Para.76 of the NPPF.  This is particularly a problem for authorities in Greater Manchester in which the current published five-year supply position is challenging, for instance Bolton where their latest claimed position is 3.7 years [2]. 

Table 2 sets out the latest claimed housing land supply positions in each of the 9 districts.  As this demonstrates, only 3 of the 9 districts can demonstrate a deliverable supply of sites (Manchester, Wigan and Salford), with Bury and Tameside being in very precarious positions with claimed housing land supplies as low as 2.3 and 2.7 years respectively [3].

PfE will now form part of the relevant Authority’s Development Plan and as such local plans will need to be consistent with it and plan (at least 15 years ahead).  In the event that a local plan looks beyond 2039, the minimum requirement figures contained within the Plan should be used to inform local plan targets.

The availability of land and its deliverability and developability will continue to be a bone of contention as we move forward.  Given the precarious 5-year housing land supply position in a number of authorities, the inability of Local Authorities from being able to utilise the provisions of Para.76 of the NPPF, the very small surpluses in terms of supply versus requirements across the conurbation and the untested nature of the claimed supply, there is every possibility that local authorities will potentially need to identify additional sites to meet their needs.  Given the constraints to development in each Local Authority and the tightly defined Green Belt boundaries, there is every possibility that Local Authorities will again need to explore if Exceptional Circumstances exist to release further land from the Green Belt in Greater Manchester.

Whilst there is no requirement in the NPPF for Green Belt boundaries to be reviewed when plans are being prepared or updated, if an authority cannot identify sufficient land in their Local Plan to meet the needs identified in the PfE, it will not be consistent with the provisions of the PfE as required by Para. 1.56.  Therefore, additional Green Belt releases may be required should there be a shortfall in housing land supply.  However, we are aware of how politically contentious this would be particularly given the direction of travel with regards to Green Belt release in the latest NPPF.  The saga continues…

Lichfields has launched the third edition of its award winning Start to Finish report on the build out of large-scale residential development sites.

The report looks at what happens on the ground, across 297 sites delivering a combined 387,000 dwellings, the largest sample we have studied. Previous versions of the report have become the industry standard for informing the production of realistic housing trajectories for plan making and decision taking across local plan examinations, planning inquiries and five-year land supply statements.

Things have moved on since the last edition which launched in 2020, now facing a General Election in which the polls suggest more change. Society and the economy was rocked by the Covid pandemic, war in Europe and the following soaring interest rates, mild recession and political (and policy) commotion, all contributing to significant market turbulence.

The housing market specifically is now in a very different place too, no longer shored up by Help to Buy loans and cheap mortgage rates. When the last version of Start to Finish was published in 2020, we had a recent peak of almost 325,000 permissions granted, and 249,000 homes being built. A recently re-elected Johnson-led Conservative government with a large majority was gearing up for a radical reform of the ‘outdated and ineffective planning system [1]’ including proposals aimed at boosting rates of on-site delivery following Sir Oliver Letwin’s independent review of build out. However, this change was superseded by the Truss premiership and then the realpolitik of delivering the LURA and NPPF reforms with an emboldened cohort of backbench rebels. As of 2024, housebuilding has fallen, (down 6% since our last edition in 2020 [2]) and permissions have plummeted, (permitted units down 30% since 2020 [3]).

For this reason, we look for the first time at the effects of market conditions on build out rates.

In this edition, for the first time we assess brownfield flatted schemes, we also have assessed the largest cohort of sites, especially sites of 2,000 or more dwellings where we have 43 more examples than in our second edition. The mean build-out rate decreased marginally for every site size from the second to the third edition. However, the build-out rates across all three editions show a relatively consistent level, which gives us confidence in the findings.

This is significant in the context of the objective the next government (of whichever party it might be) to boost levels of house building . The CMA [4] in its recent Housebuilding Market Study was clear in its findings that land banking is a symptom of the planning system rather than a cause of under delivery of housing. The methodology and findings of the CMA are broadly consistent with ours. We also agree – following the evidence we set out – with the conclusion of the CMA that the achievement of the necessary step-change in housing output is likely to be reliant on measures to improve the efficiency of the planning system and increase the amount of land available for development.

This third edition of Start to Finish, published in an election year, finds the housing market high on the political agenda and in a very different place to the last version. Up-to-date evidence on the build rate of different sites will therefore be vital to make effective evidence based decisions up and down the country. By considering the different factors that affect build out rates on both small and large sites – namely brownfield or greenfield land status, the housing mix on site, geography, affordability, the number of outlets and level of affordable housing – the latest edition provides the most robust and timely evidence available to support decision making.

Now 11 months old, North Yorkshire Council is at the early stages of preparing what could be one of the largest Local Plans in England (at least in geographic terms).

Just over a year since posting our initial thoughts on the formation of North Yorkshire Council, work to create the new North Yorkshire Local Plan is progressing and the Council is expecting to commence its ‘call for sites’ process this month. A number of other plan-making updates have been announced recently, including on the draft Maltkiln New Settlement DPD and revised draft Selby District Local Plan which are continuing to progress given their advanced stage of preparation.

With this in mind, this blog checks in on the new Council’s plan-making preparations and highlights the key matters to be aware of for everyone who will be (or already is) involved with the process across North Yorkshire.

 

North Yorkshire Council’s first Local Development Scheme (LDS) has come into effect and can be viewed here. The LDS represents the first official publication that sets out the key milestones for producing the North Yorkshire Local Plan.

The LDS also provides a helpful overview of the current Development Plans for each district that forms North Yorkshire Council. With the exception of Selby District’s adopted plans, which are intended to be superseded by the emerging Selby District Local Plan, all adopted plans will remain in place until North Yorkshire’s Local Plan is adopted.

Looking at the plans currently in preparation, an ambitious target adoption date of 2028 has been set for the North Yorkshire Local Plan.

The Selby District Local Plan and Maltkiln New Settlement Development Plan Document (DPD) have target adoption dates of late and early 2025 respectively. A short summary on the progress of both plans is provided below.

On 8^th March 2024 (last Friday), North Yorkshire Council commenced a second pre-submission (Regulation 19) consultation on the revised draft Selby District Local Plan. The consultation will run until 19^th April and invites comments on the revised plan, which has been updated to remove its proposed new settlement (named Heronby) and add four new housing allocations (seeking 301 new homes). The new settlement was proposed to provide over 3,000 new homes by 2065, as well as new community and retail facilities.

Members on the Council’s Executive Committee were told on 6^th February that the proposed new settlement faced high levels of objection, including from City of York Council and National Highways. The objection from City of York Council was highlighted to members of the Executive Committee as potentially ‘fatal’ to the Plan as a whole, given that a statement of common ground hadn’t been agreed and concerns over highways impacts remained.

More information on the revised draft Selby District Local Plan and the proposed removal of the new settlement allocation can be found here, here and here.

The Maltkiln New Settlement DPD is set to be submitted to the Secretary of State for examination early this year. The DPD aims to provide the policy framework for a new settlement in the Hammerton / Cattal area of Harrogate District.

The proposed new settlement of Maltkiln could deliver a minimum of 3,000 homes and five hectares of employment land, alongside the creation of new health, retail and community facilities.

  

As already mentioned, North Yorkshire Council’s preparations for an authority-wide Local Plan are underway and a target adoption date of 2028 has been set. The Local Plan will establish the approach for new development across almost all of North Yorkshire for the next 15 to 20 years, although it will exclude York and the areas of North Yorkshire that fall within the North York Moors and Yorkshire Dales National Parks (where the respective local planning authorities will remain).

The Local Plan will undoubtedly face its challenges over the coming years as it is shaped to meet North Yorkshire’s varying development needs and aspirations. Whilst we wait to see how the spatial strategy will be defined for such an extensive area, the newly formed Council has a significant opportunity to establish a 15-20 year framework for sustainable growth in relation to housing, the economy and the environment across North Yorkshire.

 

Working towards the first stage of public consultation this year, the Council expects to commence the ‘call for sites’ process for the North Yorkshire Local Plan later this month. This represents the first opportunity for landowners, developers and other key stakeholders to promote their sites across the County for development through the Local Plan. It also provides the Council with an indication of how it can meet the County’s development needs and environmental targets over the next 15-to-20 years.

Anticipating the high volume of sites that will be submitted as part of the process, the Council has emphasised that sites will need to ‘work hard’ and that specific consideration should be given to how their development will help achieve national objectives around climate change, delivering 10% biodiversity net gain and delivering high-quality design.

Land uses from residential and commercial, through to employment and infrastructure can be promoted. Sites intended specifically for environmental enhancement can also be submitted to the call for sites process.

All sites previously submitted to each District Council as part of their respective Local Plan preparations must be resubmitted. We understand that this includes allocated sites within the adopted Local Plans for each District that haven’t progressed, as well as sites being promoted in Selby District despite the progress on the revised draft Selby District Local Plan.

This presents another opportunity to promote sites if they were not allocated through the respective district-wide Local Plans. Justification will also be required to re-allocate sites that are already allocated but not developed, given the possibility that the Council will de-allocate sites that are not performing against their development trajectories.

 

At this early stage, how the Council approaches the spatial development strategy for North Yorkshire is unclear. With the County covering such a large area and comprising urban, rural and coastal communities, the challenges that the Local Plan will have to address are wide-ranging. Striking the right balance to effectively deal with these challenges will therefore be key.

The Council’s Local Plan team, consisting of officers from each of now-combined districts, will need to work cooperatively throughout the plan-making process to ensure that the Local Plan is delivered by its target adoption date of 2028. More importantly, effective co-operation between the districts will be necessary to ensure that the Local Plan will meet the development needs of all parts of North Yorkshire. However, with each of the former districts facing very different challenges, compromises may need to be agreed so that this can be achieved.

The first round of public consultation on the Local Plan (i.e. the ‘Issues and Options’ consultation) is anticipated to commence this winter. The consultation will establish what the Council considers are the key issues that should be addressed through the Local Plan and will set out a number of potential options for North Yorkshire’s development strategy (such as where future growth across the County might be located). The consultation will therefore offer the first insight into how North Yorkshire Council intends to address its key challenges and shape its development strategy.

 

Significant reforms to the nature of plan-making in England are anticipated. Whilst I look to conclude this blog with a very brief overview on what the proposed reforms could mean for the North Yorkshire Local Plan, we’ve already published detailed blogs covering them from a national perspective (see here and here).

Details of the proposed new plan-making system are relatively high-level at the moment, although it is expected that the Government will publish further guidance in the autumn. From the information currently available, the emerging North Yorkshire Local Plan should:

• Be ‘simpler’ to understand and use.
   
• Be prepared more quickly and updated more frequently.
   
• Optimise digital technology.
   
• Focus on ‘locally important’ matters, with other matters being covered by ‘national development management policies’.
   
• Be prepared and adopted within a 30-month timeframe, as it is proposed to be submitted to the Secretary of State (SoS) for examination after June 2025.

Under the Government’s plan-making proposals, however, the amount of evidence required to develop the Local Plan and defend it at examination in public (EiP) should be reduced.

With detailed guidance currently absent, it is unclear how North Yorkshire Council will progress its Local Plan preparations; albeit the first round of public consultation on the plan (anticipated this winter) should provide greater clarity. This is, of course, forgetting that come the end of 2024 we may have a new Government that will seek to implement its own planning reforms… we’ll have plenty more to say on that in the future though (see here).

 

Clearly, 2024 is going to be busy year for everyone involved with North Yorkshire Council’s Local Plan making process.

Whilst there is plenty to think about with the first round of consultation anticipated later this year, getting ready for the call for sites process is the priority.

Whether you are looking to promote new or existing sites for development through the Local Plan, our Leeds office has a strong track record of securing allocations through the plan-making process and can produce compelling and visually striking material to assist in site promotion.

If you would like to see how we can help, please email leeds@lichfields.uk or call us on 0113 397 1397 to speak to a member of the team.