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Environment Act gains Royal Assent

Environment Act gains Royal Assent

Jennie Baker 11 Nov 2021
The Environment Act received Royal Assent on 9 November 2021, albeit very few provisions are yet in force. The provisions of particular interest to planning are as follows: Environmental targets for air quality, water, biodiversity, resource efficiency and waste reduction and soil health and quality. A 'policy statement on environmental principles' explaining how the environmental principles should be interpreted and proportionately applied by Ministers of the Crown (in England) when making policy (except policies for defence, national security and taxation), to which those Ministers must have regard. The establishment of the Office for Environmental Protection, which describes its duty as to "protect and improve the environment by holding government and public authorities to account". Provisions relating to water and waste, which will have particular impacts on those sectors and consequential impacts on their planning. Biodiversity net gain becoming (in due course) a condition of planning permission and a requirement for nationally significant infrastructure projects. And related to this, a system of purchasing biodiversity credits in order that developments can meet the biodiversity net gain objective. Local nature recovery strategies covering the whole of England, with boundaries to be determined by the Environment Secretary. Species conservation strategies and protected site strategies. A power for the Secretary of State for the Environment, Food and Rural Affairs to amend general duties within the Habitats Regulations. The environmental targets will be set by regulations, which will specify the standard to be achieved and the date by which it is to be achieved. DEFRA has consulted on the draft policy statement on environmental principles “which sets out how those five internationally recognised environmental principles should be interpreted and proportionately applied” and a response is now overdue. Office for Environmental Protection In England, sections 22 to 43 and Schedule 1 of the Act make provisions in relation to the Office for Environmental Protection (OEP). Sections 22-24 and Schedule 1, which relate to the establishment of the OEP, came into force on 17 November 2021. However, the OEP has been operating on an interim basis for some time and will continue to do so until its full legal powers are obtained by Regulations, in due course. The OEP anticipates being fully operational from January 2022.  With regard to the OEP's enforcement function and planning, Lord Goldsmith explained to the Lords during a debate on Commons Reasons and Amendments to the then Bill: “The OEP may pursue cases for enforcement action only if it considers that the conduct in question would constitute a “serious” failure to comply with environmental law. Clause 23(7) states that the OEP must have regard, among other things, “to the particular importance of prioritising cases that it considers have or may have national implications”. While the OEP will have discretion to interpret these criteria, setting out its approach in its enforcement policy, it follows in the Government’s view that cases which only have a local concern—for example, the majority of individual planning and environmental permitting decisions—are unlikely to have sufficiently broad or widespread impact to be prioritised. The OEP could pursue such cases if it considers them indicative of a broader or more systemic issue or failure, or if especially serious harm has resulted, or may result, from the potential failure. The OEP, for example, could consider this in relation to the destruction of a nationally important population of a rare and protected species, but this should not be the norm”. Biodiversity net gain There has been much coverage of the requirement for 10% biodiversity net gain. This will be introduced when a standard condition in Schedule 14 of the Act (not yet in force) is inserted into the Town and Country Planning Act 1990, within what will be Schedule 7A. The standard condition says that all planning permissions, except those granted by Order, emergency Crown development or other types of development as defined in Regulations, may not be begun unless a biodiversity gain plan has been submitted to, and approved by, the planning authority. The planning authority must approve the biodiversity gain plan if, among other things, it is satisfied that the pre and post development biodiversity values are as stated and that the biodiversity net gain objective is met. Biodiversity value will be calculated by using a metric produced and published by the SoS, which may be revised. Schedule 7A will say that the biodiversity gain objective is met if the biodiversity value attributable to the development exceeds the pre-development biodiversity value of the onsite habitat by at least the relevant percentage. The relevant percentage is 10%, but this can be amended by Regulations. Schedule 15 of the Act (also not yet in force), will make amendments to the Planning Act 2008, to mandate for respective biodiversity net gain requirements for Nationally Significant Infrastructure Projects. In terms of timescales for the introduction of a legal requirement for biodiversity net gain, a written question from Conservative MP Bim Afolami asked about “the potential merits of a pilot scheme to consider the impact of biodiversity net gain in 2022 and 2023 before its full implementation in 2024”. The Environment Minister, Rebecca Pow MP replied with reference to current policies and discussions with the development sector saying: “Some aspects of the biodiversity net gain policy were tested, and evaluated, as part of the biodiversity offsetting pilots which took place from 2012 to 2014. We will shortly be consulting formally on more details of biodiversity net gain’s implementation and will consider which components of the approach might benefit from pre-commencement testing as part of this”. For an overview of biodiversity net gain in current national policy and in forthcoming legislation see Simon Ricketts' blog “Ecology By Numbers: Biodiversity Net Gain In The Environment Bill”. A useful emerging resource is the Planning Advisory Service's page on biodiversity net gain. Policy before law For biodiversity net gain and indeed other planning-related provisions that can be adopted into policy, we are likely to see local policies come forward in advance of national requirements. Where there are no local policies, local planning authorities may consider some emerging national policy and law as a material planning consideration, where the approach or direction of travel is clear. For example, short-lived additions to the Bill made via an amendment in the Lords included an enforcement power to control the felling of trees in England and a new requirement that the Government implements an enhanced protection standard for ancient woodland in England. These proposed provisions were rejected by the House of Commons, but only after the Environment Minister, Rebecca Pow MP, announced: “We will undertake a review of the national planning policy framework to ensure that it is being correctly implemented in the case of ancient and veteran trees and ancient woodland. Should the review conclude that implementation can be improved, we will look to strengthen the guidance to local authorities to ensure their understanding of the protections provided to ancient woodland. Secondly, I am pleased to announce that we will consult on strengthening the wording of the national planning policy framework to better ensure the strongest protection of ancient woodland, while recognising the complex delivery challenges for major infrastructure. Finally, we will amend the Town and Country Planning (Consultation) (England) Direction 2021 alongside these reforms to require local planning authorities to consult the Secretary of State for Levelling Up, Housing and Communities if they are minded to grant planning permission for developments affecting ancient woodland”. In the debate that followed, clarification was sought (by John Redwood MP) as to whether this amendment to policy would mean “[…] another HS2-type assault on ancient woodland would not be allowed, whereas the last one was?” The Environment Minister replied: “What it will mean is that, yes, there will be much more credence given to the value of ancient woodland. At the moment, ancient woodland does not necessarily win, because one can have the infrastructure, or whatever it is, if one can demonstrate that there are wholly exceptional reasons for getting rid of the ancient woodland. This approach will really strengthen the position: it is a really big commitment to ancient woodland, which is like our rainforest. We have to do something about it—and we are, which I hope will be welcomed”. It appears that the intention is that all or part of the proposed clause on an enhanced protection standard for ancient woodland will be incorporated into national policy. We may not know whether the buffer zones will be in the policy to be consulted on, until the consultation emerges. Local planning authorities with ancient woodland may respond in different ways, but some may consider the policy intent above to be considered a material planning consideration, from now on. Parallel publication: Net Zero Strategy With regard Net Zero, the Department for Business, Energy & Industrial Strategy published "Net Zero Strategy: Build Back Greener" (NZS), on 19 October. Recent Lichfields research "Time to panic? Planning and the climate emergency" discusses the need for the development sector to take a decisive and proactive approach to Net Zero. The NZS will need to be followed up with changes to national planning policy, which the Government says it will do. The extent to which policies derived from the Environment Act will be included in a revised NPPF and whether Net Zero objectives will truly embedded into policy remains to be seen. The NZS acknowledges the potential challenges in ensuring that policies are complimentary rather than contradictory: "Delivery of net zero policies and proposals will need to consider the UK’s other legally binding environmental commitments (for example, new legally binding targets stemming from the Environment Bill), and any trade-offs against these acknowledged and mitigated through careful planning policies and actions can be designed that deliver multiple outcomes in support of the UK’s net zero and 25 Year Environment Plan ambitions.For instance, the planting of broadleaf trees and restoration of peatland or grassland can deliver carbon sequestration as well as environmental benefits including improved biodiversity and water quality, if done in the right way. Conversely, certain interventions such as planting of maize for biomass or food may risk soil health and water quality. It will be important to assess the wider impacts of proposed net zero actions and seek synergies with environmental ambitions wherever possible, so that the twin challenges of biodiversity loss and climate change are tackled in an efficient way". The Environment Act 2021 The Environment Act 2021 (Commencement No. 1) Regulations 2021

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7,000 discount market homes a year: a practical guide to First Homes
From 28 June 2021, and subject to transitional arrangements, English national planning policy will include a home meeting the criteria of a First Home within the definition of ‘affordable housing’. On 24 May a Written Ministerial Statement (WMS) was made setting out the policy, including the First Homes criteria and transitional arrangements, with further details in planning practice guidance published on the same day. The same WMS also explains the replacement of the entry level exception sites policy with a ‘First Homes exception site policy and a new model for shared ownership. This blog focuses on what First Homes are, the new policy requirement and when First Homes will be introduced (they already have been). A blog by my colleagues looks at the policy and its potential impacts in more detail: First Homes – dicing with the discount. National policy on First Homes From 28 June 2021, in England, national policy will say that at least 25% of all homes delivered through developer contributions should be sold as First Homes. What is a First Home? A First Home is: discounted in perpetuity by a minimum of 30% against the market value with plan-makers able to set 40% or 50% in perpetuity discounts where need is evidenced, and developers permitted to offer higher in perpetuity discounts after the discount has been applied, the first sale price of the home (my emphasis) must be no higher than £420,000 in Greater London or £250,000 elsewhere in England with plan-makers able to set lower price caps sold with a mortgage or home purchase plan for at least 50% of the discounted purchase value to a person meeting the First Homes eligibility criteria a primary residence, not used for investment or commercial gain, albeit it may be let for up to two years secured by a s106 agreement to ensure its delivery and the necessary restrictions on title[1] (a model s106 agreement for First Homes is being devised) Who is eligible? First Homes are to be “prioritised” for first time buyers (as defined in legislation already for the purpose of stamp duty relief). The local authority may set local eligibility criteria. The policy provides examples of criteria that might be applied, such as key workers, local connection, different income caps, but this is not an exhaustive list. Members of the Armed Forces and (subject to certain criteria) their partners and veterans would be exempt from a local connection test. So, if no local tests are set, the purchaser must be a first-time buyer purchasing borrowing at least 50% of the discounted purchase value. The purchaser (or purchasers) should not have a combined annual household income greater than £80,000 (or £90,000 in Greater London) in the tax year immediately preceding the year of purchase. What if there is no demand for a First Home? The planning practice guidance says that a s106 agreement may include provisions permitting open market sale of a First Home if it is marketed as a First Home for at least 6 months in total and “all reasonable steps have been taken to sell the property (including, where appropriate, reducing the asking price)”. Where these provisions are included, the s106 agreement must require the seller to compensate the local authority for the loss of the First Home in the way set out in the planning practice guidance. What is the policy requirement and how does it relate to existing tenure mix policies? At least 25% of all affordable housing units secured through developer contributions should be First Homes. As with other affordable housing, the policy expectation is that this is provided on-site unless an alternative financial contribution or off-site provision is justified. A quarter of any financial contributions for affordable housing should be used to provide First Homes. Having “secured the 25% requirement”, local authorities should prioritise social rent, in accordance with local policy and “where other affordable housing units can be secured, these tenure-types should be secured in the relative proportions set out in the development plan”. Examples of the application of this approach are given in planning practice guidance: “For example, if a local plan policy requires an affordable housing mix of 20% shared ownership units, 40% affordable rent units and 40% social rent units, a planning application compliant with national policy would deliver an affordable housing tenure mix of 25% First Homes and 40% social rent. The remainder (35%) would be split in line with the ratio set out in the local plan policy, which is 40% affordable rent to 20% shared ownership, or 2:1. 35% split in this way results in 12% shared ownership; and 23% affordable rent”. (Paragraph: 015 Reference ID: 70-015-20210524) The proposed development should also meet up-to-date policy requirements regarding cash in lieu contributions. The local planning authority (LPA) is responsible for calculating the value of the elements of the new affordable housing mix to establish whether a planning application is policy compliant, because it seeks to capture the same amount of value as would be captured under the local authority’s up-to-date published policy. Where the transitional arrangements do not apply, the LPA is responsible for making clear how existing policies should be interpreted in the light of First Homes requirements “using the most appropriate tool available to them”. Regarding the application of First Homes policy locally, consideration of the impact of First Homes policy on existing local policies and the “tools available” to the LPA, the planning practice guidance says: “Local planning authorities are also encouraged to make the development requirements for First Homes clear for their area. The most appropriate method or tool to do this will depend on individual circumstances for each local planning authority. These might include (but may not be limited to): publication of an interim policy statement, or updating relevant local plan policies. Local planning authorities should assess their own circumstances when considering the most appropriate way to achieve this in their context” (Paragraph: 009 Reference ID: 70-009-20210524). Will the First Homes policy requirement supersede development plan policy? Not necessarily. The development plan remains the starting point for the determination of planning applications. The First Homes policy will be a material consideration – indeed it already is, together with proposals for other forms of affordable housing defined in the National Planning Policy Framework, notwithstanding the transitional arrangements. A reminder of the difficulties that arise when Government introduces a swift change to national policy on affordable housing provision is the judgment in Secretary of State for Communities and Local Government (SoS) v (1) West Berkshire District Council (2) Reading Borough Council (2016) (our overview is here). In that case the SoS appealed against the Councils’ successful challenge (in 2015) of national policy introduced in 2014 for a ‘vacant building credit’ and which outlined the circumstances in which contributions for affordable housing and tariff-style planning obligations should not be sought from small scale and self-build development. The judgement led, effectively, to both sides claiming a victory: the Government won the case, but the case makes it clear that there is no ‘blanket approach’ to the application of government policy to decision-taking, or plan-making. Hence the Government expecting local planning authorities to use the most appropriate method available to them to set out how the First Homes requirements impact on their current affordable housing tenure mix policies and affect the interpretation of policies (see above). What are the transitional arrangements? The requirements will not apply to: local plans and neighbourhood plans submitted for Examination before 28 June 2021, or that have reached publication stage by 28 June 2021, as long as they are submitted for Examination before 28 December 2021 (and subsequently not to planning applications submitted in areas to which they relate); or sites with full or outline planning permissions already in place or determined (or where a right to appeal against non-determination has arisen) before 28 December 2021 (or 28 March 2022 if there has been significant pre-application engagement). However, the Government says “local authorities should allow developers to introduce First Homes to the tenure mix if they wish to do so”. “They” could mean developers or local authorities. The transitional arrangements for plan-making are therefore more of a line in the sand than those for decision-making, given the above statement and that the First Homes product is a form of discount market sale housing in any event. The written ministerial statement notes “The Government will continue to monitor the effectiveness of these transitional arrangements in light of emerging economic circumstances”. Does this mean that planning applications to be determined prior to the end of the transitional period cannot include First Homes? No. Discount market sales housing is already a form of affordable housing, defined in the glossary to the National Planning Policy Framework. According to that definition of discount market housing: “Eligibility is determined with regard to local incomes and local house prices. Provisions should be in place to ensure housing remains at a discount for future eligible households”. There are already developments with planning permission that will provide First Homes affordable housing. For example, the Dylon 2 scheme at Lower Sydenham, granted on appeal on Metropolitan Open Land, which will provide 49 First Homes. The Inspector said: “Although not policy compliant in accordance with BLP Policy 2 [provision of affordable housing], the provision of 49 affordable units would make a significant contribution to meeting the considerable need for AH in the Borough. I attach substantial weight to this social benefit of the proposal”. The Government’s Equality Impact Assessment for the First Homes policy says First Homes will be a reform of the discounted homes programme and acknowledges: The National Planning Policy Framework already allows local plans to include ‘discounted market sales housing’ that is sold with a discount of at least 20% over market prices. […] delivery remains relatively small scale and we want to substantially increase the build-out of these homes. What about 'low cost homes for sale' that are not First Homes? Sub-category d within the definition of affordable housing in the National Planning Policy Framework is “Other affordable routes to home ownership”.  This includes shared ownership and “other low cost homes for sale (at a price equivalent to at least 20% below local market value)”. This definition does not refer to the eligibility criteria or discount for owners of the home. The scope to provide low cost market homes for sale that are not First Homes as a form of affordable housing will be squeezed by the policy requirement to provide First Homes. Shared ownership products will also be squeezed in the future, but in the short term up-to-date tenure mix policies may encourage them. Community Infrastructure Levy relief is already available First Homes are a form of affordable housing. Mandatory social housing relief from the Community Infrastructure Levy has been available for certain discount market home products since November 2020. To be eligible for mandatory social housing relief in this category, a planning obligation must be entered into prior to the first sale of the dwelling designed to ensure that any subsequent sale of the dwelling is for no more than 70% of its market value.  The existence of mandatory social housing relief for this form of affordable housing further demonstrates that First Homes can already be brought forward now. However, mandatory social housing relief from the Community Infrastructure Levy is not available for affordable housing products offering a discount of less than 30%. Six years to reach delivery of 7,000 First Homes a year In October 2020, MHCLG Permanent Secretary Jeremy Pocklington said to the Public Accounts Committee’s inquiry into Starter Homes that implementation of the First Homes policy will not be quick and referred to the transitional arrangements: “We will need to adjust the planning policy in order to fully implement the First Homes proposal. After that stage, authorities, as they change their policies and update their local plans, will be required to provide First Homes. We are not setting a timetable on that. We are going to learn from the 1,500 homes. This is a policy that will grow over several years. It is not a quick policy to implement”. This acknowledgement of the time it will take to introduce First Homes policy into development plans is reflected in Figure 1 of the Equalities Impact Assessment for First Homes, which says full implementation will be in 2027/2028: Summary… and a blog on potential unintended consequences  Low cost homes for sale are not a new form of affordable housing, but the specific criteria and requirements of First Homes are new. Having said that, there are already examples of planning permissions that include First Homes as a type of affordable housing; the Government’s policy intentions have been clear for some time and the introduction of mandatory CIL relief for First Homes or similar products has been around since last year. Therefore, while the First Homes policy requirement will take some time to filter through to development plans, where developers seek to include First Homes as an affordable housing contribution, there is scope to make the case for this immediately, rather than waiting for the transitional period to end. A blog by my colleagues ‘First Homes – dicing with the discount’ looks at some potential inherent tensions within the First Homes policy and considers whether the one-size-fits-all approach might have unintended consequences.     [1] Paragraph 006 of the First Homes Planning Practice Guidance says: When a First Home is sold by the developer to the first owner, a restriction is to be entered onto the title register identifying the unit as a First Home. This restriction should ensure that the title cannot be transferred to another owner unless the relevant local authority certifies to HM Land Registry that the First Homes criteria and eligibility criteria have been met, including the discounted sale price.

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