Planning matters

The sequential test was first introduced as part of retail policy back in the mid-1990s in response to the growth in out of centre retailing as a way to direct development towards town centres. While out of town retail remains strong, it is not necessarily the threat to town centres that it was years ago, and there are recent examples of retail parks being repurposed for alternative uses, including residential, logistics and leisure use.

Following James Cox’s earlier blog on the changes proposed for town centres in the consultation draft NPPF, we have been giving more thought to whether there is logic in seeking, on the one hand, to remove the sequential assessment in its entirety or, on the other to reintroduce ‘disaggregation’ a policy requirement that was abandoned for 14 years.

The consultation draft NPPF Policy TC3 requires the sequential test to be applied to proposals for main town centre uses that are neither in an existing centre nor in accordance with a development plan allocation. Part 3 of the draft policy states that when undertaking the sequential assessment, it “should be considered whether the type of development proposed could be accommodate across multiple sites”.  Question 91 of the consultation document then asked “Do you believe the sequential test in policy TC3 should be retained?”, which implies that the removal of the sequential test in its entirety is being considered as an option.

Following the closing of the consultation period, there has been limited industry-wide coverage of the polarity between these two positions, and the associated pros and cons.

With successive Governments promising a pro-growth stance and to reduce the ‘red tape’ in planning, retail policies within the NPPF have largely remained as drafted in 2012. The stance generally in Retail Assessments is that while previous policy and guidance made express reference to disaggregation, these references were not carried forward to the current NPPF (or indeed its successive revisions).  Since it was first published back in 2012, neither the NPPF nor the PPG (or any subsequent updates to the PPG) make any reference to the requirement for developers and occupiers to consider breaking their proposals into smaller constituent elements which may be accommodated within a town centre when satisfying the sequential test.  This was a deliberate choice of the NPPF and not an oversight, in the same way as demonstrating retail ‘need’ is no longer a policy requirement.

The case against disaggregation is also backed by numerous decisions that briefly summarised below. 

Firstly, the Supreme Court Judgement in Tesco v Dundee City Council[1] which was the first in a series of consistent interpretations of how disaggregation should be dealt with when considering retail development proposals.

Rushden Lakes[2] was also an important Secretary of State decision in 2014, in relation to an Inquiry which took place shortly after the issue of the (2012) NPPF, and therefore provided an early indication on the application of policy by the Secretary of State. The conclusions of the Inspector were endorsed by the Secretary of State in the application of the sequential test relating entirely to the application proposal, rather than disaggregated elements and whether it could be realistically accommodated on an actual alternative site.

It is equally important to note however that the NPPF has also been consistent in the need for developers and occupiers to be sensitive to the need for ‘flexibility’ as part of the sequential test. However, Secretary of State decisions[3] relating to out of centre retail and leisure development at Scotch Corner concluded that disaggregation is not required in order to demonstrate flexibility.

Paragraph 11.7 confirmed that:

“In carrying out the sequential test it is acknowledged that whilst Framework paragraph 24 indicates that applicants should demonstrate flexibility on issues such as format and scale, it does not require the applicant to disaggregate the scheme. The sequential test seeks to see if the application, i.e. what is proposed, can be accommodated on a town centre site or on sequentially preferable sites.” (emphasis added)

A further key decision related to out of centre retail and leisure development at Tollgate in Colchester[4] stated (Paragraph 12.3.4 of the Inspector’s recommendation and confirmed by the Secretary of State):

Disaggregation has not been part of retail planning policy since Policy EC15 of PPS4 ‘Planning for Sustainable Economic Growth’, published in 2009.  This required flexibility to be demonstrated, including in terms of “the scope for disaggregating specific parts of a retail or leisure development, including those which are part of a group of retail or leisure units, onto separate, sequentially preferable, sites”.  However, even then, the policy had an element of realism, recognising that the ‘arbitrary sub-division’ of proposals was not a sensible approach to take.

Our research found only a handful of pre-NPPF appeals where the issue of disaggregation as part of the sequential test was a factor in the outcome of the decision.  A pragmatic approach and understanding of the commercial reality of how companies operate seems to have been applied.  For example, an Inspector’s decision[5] allowing an extension to an existing Sainsbury’s store in Chesterfield in 2010 confirmed (para 34) that “It is not the purpose of national policy to necessarily require development to be split on separate sites.”  The Inspector then concluded (paras. 39-41) that:

Likewise, for a call-in decision for Marks & Spencer at Cheshire Oaks[6] the Inspector concluded (IR para. 178) that:

The Secretary of State (para. 19) agreed with the Inspector that “the disaggregation of the scheme would not be feasible given to the Company's need to offer a complete range of goods within the store.”

So the question is why would the Government potentially be seeking to reinstate disaggregation at this stage, when it has not been considered an option in the last 14 years, and even when it was included within policy does not seem to have been an effective tool?  Presumably, the intention is to try and direct more investment to town centres.  However, our view is that there are likely to be limited advantages in seeking to achieve this through disaggregation, as opposed to the disadvantages, which include growth not being realised, preventing jobs and investment from coming forwards and potential increased delays and uncertainty.

The currently drafted wording of the NPPF requires applicants to demonstrate flexibility “on issues such as format and scale”, and this has been accepted as a reasonable approach for policies to take.  Suggesting that the type of development proposed could be accommodated across multiple sites would go significantly beyond what can reasonably be assumed as flexibility, and will not have the desired effect of directing developments into town centres.  Our experience is that planning applications take into account realistic options for development of a site.  Trying to shoehorn a development that does not resemble the requirements of a planning application, or individual components of a proposal, into unsuitable sites is more likely to stifle investment and is not a commercially realistic approach. 

Clearly the Government wishes to be seen to be doing what it can through policy to protect town centres, however the high street is not as dead as it has necessarily been reported in the press recently (see James Singer’s recent blog on this topic). 

Outside of the planning world bubble, there was an interesting response to an editorial in the Guardian on the decline of town centres recently where readers provided their views on the future of town centres.  Much like James’ blog, it is recognised that the traditional ‘high street’ has evolved and is no longer solely a retail focus and there should be diversification and a different offer, but also that more incentives such as changes to business rates are what is required to bring investment back into centres. 

Our view is that the sequential approach still has a role to play in retail and town centre policies, and we do not think that this should be removed in its entirety.  However, the way forwards to support town centres is not to roll policy backwards, but to recognise and embrace the evolution of the town centre in more effective ways.