Planning matters

The Government is consulting on its Levelling-up and Regeneration Bill, including reforms to the National Planning Policy Framework (‘NPPF’). Amongst the reforms are amendments to the wording of Chapter 8 and onshore wind and energy efficiency. Many of you will have seen my previous blog on the importance of wind energy and the appetite for change in Government. This appetite was first set out in the Growth Plan under Liz Truss’ Government and then later in December 2022 in a Written Ministerial Statement from Michael Gove, under Rishi Sunak’s leadership. But what does this actually mean for policy and what reforms are proposed? In Autumn last year the industry was promised a lot and a quick Google would have shown the new and renewed excitement in the sector. In reality, for a country that needs to focus on creating its own energy for security and fair pricing, the amendments to Chapter 8 of the NPPF are underwhelming to say the least. The proposed amendments feel like a missed opportunity. The proposed amendments raise many questions and I explore these in this blog. Current policy wording in the NPPF (July 2021) stems from 2015 and David Cameron’s view that the public was “fed up” with such developments. Footnote 54 of the NPPF sets out instances where onshore wind will be considered acceptable. The starting point is that they will be unacceptable (!) unless key tests are met (i.e., areas for wind energy to be identified in Development Plans and the test for full community support for developments). See my previous blog for more details. So what are the proposed changes? The Government recognises the “dramatic rise in global energy prices” and how crucial it is that “we build a strong and home grown energy sector”. Its Net Zero Strategy sets out a clear vision for decarbonising energy and the way energy is produced and used. To achieve this, the Government recognises that it will require a stepped change in deploying renewable energy technologies. So why is it only minor amendments are proposed to the negatively phrased policy requirements for wind energy? The proposed amendments include changes to Paragraph 158 (now Paragraph 160). This reads: “When determining planning applications (footnote 62) for renewable and low carbon development, local planning authorities should: a) not require applicants to demonstrate the overall need for renewable or low carbon energy, and recognise that even small-scale projects provide a valuable contribution to significant cutting greenhouse gas emissions; b) approve the application if its impacts are (or can be made) acceptable (footnote 63). Once suitable areas for renewable and low carbon energy have been identified in plans, local planning authorities should expect subsequent applications for commercial scale projects outside these areas to demonstrate that the proposed location meets the criteria used in identifying suitable areas; and c) approve an application for the repowering and life-extension of existing renewables sites, where its impacts are or can be made acceptable. The impacts of repowered and life-extended sites should be considered for the purposes of this policy from the baseline existing on the site.” Footnote 62 reads: “Wind energy development involving one or more turbines can be granted through Local Development Orders, Neighbourhood Development Orders and Community Right to Build Orders, if it can be demonstrated that the planning impacts identified by the affected local community have been appropriately addressed and the proposal has community support.” This footnote is new. Footnote 63 reads: Except for applications for the repowering of existing wind turbines, a proposed wind energy development involving one or more turbines should not be considered acceptable unless it is in an area identified as suitable for wind energy development in either the development plan, or a supplementary planning document identifies an area as suitable for wind energy development (where the development plan includes policy on supporting renewable energy); and, following consultation it can be demonstrated that the planning impacts identified by the affected local community have been satisfactorily addressed and the proposal has community support. [Lichfields emphasis] What do these changes mean in reality and how much more support is actually afforded to onshore wind development? The changes are small and underwhelming when compared with the grand promises of last year. This is disappointing for the sector and us as planning consultants who understand the need for and focus on the renewable energy. I set out my thoughts below. The Government has placed a vast amount of importance on renewable energy generation in the ability to achieve net zero targets. This is as important as delivering housing and employment development (in fact they should come hand in hand so all developments and geographical areas can aim to achieve net zero). To achieve this, the NPPF should require local authorities to allocate land for renewable energy uses in the same way as they are required to allocate land for other uses (such as housing etc). The proposed amendments certainly do not do this and the wording in Footnote 63 remains that wind turbines are not considered acceptable unless certain requirements are met. The new NPPF is a great opportunity for the Government to put in place new national policies for the renewable sector and at present this opportunity has been missed. Sticking with the proposed wording, there is still the requirement for local authorities to identify suitable areas for wind. The text now includes reference to these being identified in a Supplementary Planning Documents (‘SPD’) as well as Development Plans. We are unclear as to how this will bring about more land being identified for wind. The role of an SPD is to build upon and provide more detailed advice on policies in an adopted Local Plan. What happens if there are no overarching policies? My last blog identified that, since 2015, only 11% of local authorities have identified suitable area areas for wind energy. What if new wind energy developments were considered in the context of prevailing planning designations, planning policies and on their planning merits (i.e., such as considering Footnote 9 designations, including the Green Belt, National Parks and Areas of Outstanding Natural Beauty and their environmental impact in the context of their socio and economic benefits). This is currently how other non-allocated development comes forward in the planning system. Lichfields previous research on this matter identifies that taking into account Footnote 9 designations, around 60% of land would potentially be considered appropriate in England. This brings much opportunity to identify suitable areas of land.   The test for community support remains. Key questions that arise from this are how to define an affected community and then what measures are applied to assess community support? The Government has suggested that more guidance will be issued on this in due course (including the opportunity for the creation of local partnerships), however until such time as this is addressed, it is difficult to support the wording. It is our view that national and local policies need to provide a material planning consideration ‘hook’ to achieve local community support. Reference has been made to community support payments or adjusted energy prices if a local community lives near a wind farm. This would take a similar approach to Scotland. What about the Community Infrastructure Levy (‘CIL’) and a CIL policy trigger to make developments acceptable? This could be paid to local communities for the funding of local infrastructure or social projects. Reference is also made to increased engagement with local communities during the pre-application stage of development and a more digitalised approach. We will watch out for the guidance to understand what this means in reality. If planning applications need to set out how effects identified by the local community have been satisfactorily addressed, does this pave a way for a new form of environmental and social assessment to accompany applications? A Social / Community Benefits Statement? Under the proposed wording, applicants now need to show that impacts affecting communities have only been “satisfactorily” rather than “fully” addressed. Taking a step back from the wording, onshore wind energy is the only type of development that needs community support in order for it to be considered acceptable. How is this measured and what does it mean? Major planning applications of a strategic nature can receive approval on ‘planning balance’ despite having community objections during determination. Does the change from “fully” to “satisfactory” allow all aspects of the development to be considered and who is going to provide the test of whether comments have been satisfactorily addressed? Will it be decision makers or the community? The proposed amendments do not take into account the commercial realities of developing renewable energy project at this time. We are aware of many stakeholders in the industry (and renewable energy sector more widely) grappling with national grid connection timings. It is a barrier to development. If the NPPF is to catch up with renewable energy demand, then the economics and infrastructure requirements behind each scheme will need to be fully understood and concessions made to ensure developments go ahead. This is a matter wider than planning policy and there needs to be greater transparency. Scarcity of grid connection should be afforded weight in the decision-making process, when considering the benefits that the scheme would bring in respect of renewable energy generation. It appears a real missed opportunity to not widen the role of the NPPF to set out the in principle support for energy generation (such as solar, battery storage solutions and carbon capture) and a clear roadmap for policy support. Despite the above, there are some positives to take from the proposed reforms. The proposed wording does support the approval of an application for the repowering and life-extension of existing renewable sites. This is a positive step and shuts down any lingering debate about where life extensions fit in to the planning system. The presumption is now to approve. The NPPF also proposed wording to support energy efficiency improvements in existing buildings to improve energy performance.  Separately, when researching around the topic of energy support, I found a press article in Hampshire where residents are being asked to submit their ideas for where onshore wind development could be located. These proactive measures are a starting point, but what about the intervention that was promised in this sector? Opportunities to engage and influence The Department for Levelling Up, Housing and Communities is seeking views on the proposed NPPF reforms until 2nd March this year. The format of this current consultation allows a great detail of scope to positively influence several future consultation documents. Lichfields is closely monitoring this consultation and would be happy to discuss or assist stakeholders wishing to engage further. Image credit: Dan Meyers via Unsplash

Winding ourselves back to April 2022, Plan-making was in a perilous state. Planning reform was on the horizon so many emerging Local Plans tackling (or about to tackle) difficult issues – such as Green Belt review, high housing need, or other cross boundary issues – were being shelved, put on ice, or withdrawn. This led to our blog – counting the cost of delay – which identified 11 Local Planning Authorities had taken such action. Based on the data available, we then reviewed eight of these authorities and found that c.70,000 homes were caught in these plans which represented a combined construction value of £10.14 billion (using Lichfields Evaluate): supporting 1,000’s of jobs, generating economic output, and delaying the operational and expenditure impacts that arise from new development. Nine months on everything has changed but nothing is different. Where are we today in planning reform? One of the key reasons for plan delay has been the impending changes to plan-making. The most recent reforms are those now described in the Government’s ongoing consultation on the ‘Levelling-up and Regeneration Bill: reforms to national planning policy’ which runs until 2nd March 2023. Further details on the proposed amendments can be found in colleagues’ blogs which respectively summarise the proposals and set out in detail the proposed reforms in relation to density and character, the Housing Delivery Test, and Five Year Housing Land Supply. These changes were alluded to in a Written Ministerial Statement (‘WMS’) published by the Secretary of State, Michael Gove, on 6th December 2022. ‘Summary’ As set out below, a number of Local Authorities have paused plan-making since our last blog with a further flurry since the publication of the WMS, citing the uncertainty caused by this document specifically as the reason for the pause. As we will come on to, since our last blog a further 27 LPAs have stalled, delayed etc (28 including Havant which we originally missed!). Of these, 8 have been since the WMS was published and it is likely that more are on the horizon. Our analysis shows we may be foregoing at least 11,200 homes per annum. Where are our original 11 LPAs? Looking back at our original 11 LPAs, what progress has been made? Very little…. It looks like there is some progress in Welwyn Hatfield and Mid Sussex have gone back a step but (albeit with a largely similar plan) are at least consulting. Sheffield have published a new Reg 19 for consultation. The rest either have no progress or at most have published a new LDS. Following the publication of our previous blog, we were made aware that in addition to our identified LPAs, Havant had also withdrawn their Local Plan from examination in March 2022. This followed concerns raised by the Inspectors regarding the deliverability of housing allocations and how consultation had been undertaken, with Councillors raising concerns regarding ‘unattainable targets’. Have any more LPAs joined the list? Unfortunately, but unsurprisingly, yes. Pre-WMS Post WMS, Pre-NPPF Consultation Post NPPF Consultation (to 18th Jan) There are other LPAs that arguably could be added to the above lists. However, they have either not overtly stated their plan is being delayed, are just slow at plan-making (and not updating LDSs), or are having trouble at examination. Looking ahead – future delays on the horizon? Looking to the future, although the NPPF consultation provides an indication of the potential reforms, there is continuing uncertainty which we expect will lead to further Local Plan delays. We have identified at least four LPAs who have hinted at a potential future delay: Teignbridge – while Teignbridge are continuing to consult on their Regulation 19 Local Plan, Councillors agreed to a recommendation which allows the council to review the total number of new homes in the local plan if policy is changed regarding housing targets. Spelthorne – in a statement published on 20 December 2022, the Council set out that the proposed changes to planning policy could have an implication for the number of homes that should be planned for. They have scheduled an extraordinary Environment and Sustainability Committee Meeting on 31st January 2023 to review the changes and their implications for the Plan, and how to proceed with the examination. Gedling – confirmed on 8 December 2022 that a Green Belt site was to be removed from the Local Plan and requested that the government urgently clarify the policy in terms of housing targets. Greater Manchester Spatial Framework – On 18th January 2023, Conservative Councillors in Bury failed to pass their motion to withdraw from the Places for Everyone Greater Manchester Spatial Framework, which could have led to the collapse of the plan. While the Plan survives for now, tensions surrounding it have been widely reported and its collapse would lead to at least 20,340 homes foregone and leave no local authority in Greater Manchester with an up-to-date plan. Counting the mounting costs Homes Foregone Using a slightly different methodology for our ‘homes foregone’ measure, all the 38 LPAs (preparing 33 plans) that have overtly delayed, paused, withdrawn etc their plans combined have an annual housing need of c.38,200 homes[1]: equivalent to 12.8% of the national figure (outputted by the Standard Method). This compares to an annual delivery of c. 27,000 homes (based on an average of the past three years delivery as detailed in the 2021 Housing Delivery Test). Were these LPAs to plan for their local housing need (or adopted/emerging figure if higher) in their next plan, then delivery in these areas should eventually rise to the c. 38,200 homes per year requirement. This means we are forgoing c.11,200 homes per year in the absence of ambitious local plans. Over just a five-year period then, we are foregoing at least c.56,000 homes that might otherwise have been delivered if plans were made and adopted to meet higher levels of need. This is likely to be a lower estimate. The true figure will be greater because of the gradual build out of legacy allocations which currently maintain supply. In addition, of the 38 LPAs assessed only five have wholly up-to-date plans so the rest are currently relying on ‘speculative’ development to supplement their delivery to varying extents (ironically, this is exactly what the Government’s changes to the NPPF are supposed to prevent). Supply from this source will likely be supressed by the Government’s proposed reforms to five-year supply. Economic costs Of the additional 27 LPAs announcing a delay since our last blog (including Havant) only 13 had draft plans published which set out proposed new allocations or submitted plans that we can analyse. In total, these plans proposed c.74,700 homes on wholly new allocations across their respective plan periods, of which c. 22,600 were meant to be affordable. Next, looking at the Evaluate outputs, these 74,700 homes have an estimated combined construction value of £11.09 billion (at 2022 prices, calculated using regional costs). This level of investment would support 8,700 direct jobs, 10,700 indirect jobs with an annual economic output of £1.4 billion (GVA). Local economies would be hit as the spending growth associated with new development won’t materialise as might have been expected. While not all this spending will be new (i.e. people living in an area moving to a new home in the same area, or money saved for first purchases spent on other goods/services) this expenditure would support 10,800 retail jobs. These developments would also generate £145 million per annum in Council Tax (at today’s rates). Conclusions The costs of delay are real. The continuing malaise in plan making locks up growth and the above only shows some of the cost given we haven’t looked at economic development and we aren’t able to review all of the delayed plans. This is obviously not helpful given we may fall into recession, especially when the growth is there to be had. It is more than just the homes and business development though, it’s the new schools, health centres, green spaces, and sports provision that also gets held up. These have significant associated social costs. As we previously concluded, one could readily recognise the realpolitik drivers of stalling local plans back in April. More than nine months on, the proposed changes in national policy – which appears to be the primary driver for delaying plan-making – seem to deliberately plan for fewer homes. They remain on the horizon but are closing in. The best way to visualise our current quandary is this Monty Python sketch. Sir Lancelot – in this case ‘planning reform’ – always appears on the horizon. The question remains, if this has been the impact so far, what will it do when it suddenly arrives at the gates? [1] This figure is an amalgamated figure of the local housing need (calculated using the standard method) for each LPA or a higher requirement in an adopted or emerging plan (i.e. accounting for unmet needs and growth deals)