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Updated 24 September, following a further Government publication At the end of a week of much speculation about the future or otherwise of the Levelling Up and Regeneration Bill (aka Not the Planning Bill), a new Planning and Infrastructure Bill was announced. The Government also confirmed that it is in discussion with nearly 40 authorities regarding the creation of new Investment Zones, which “will provide time-limited tax reliefs, and planning liberalisation to support employment, investment, and home ownership”. These announcements came within and alongside the Government’s Growth Plan 2022, which was presented by the Chancellor and published on 23 September. The Plan is built around the Government’s aim of achieving an annual average growth rate of 2.5%. As part of its mission to cut taxes, streamline the public sector, and liberate the private sector the Government plans to get the housing market moving and to cut ‘red tape’. It also plans to “accelerate the construction of vital infrastructure projects by liberalising the planning system and streamlining consultation and approval requirements”. Planning and Infrastructure Bill The Chancellor noted in his speech that the time taken for Development Consent Order decisions to be made is getting longer. The Government consider that, “Delays are partly a result of a complex patchwork of environmental and regulatory rules, some of which are retained EU law. The government wants to reform and streamline these arrangements to promote growth whilst ensuring environmental outcomes are protected”. According to the Growth Plan, the Planning and Infrastructure Bill is to provide legislation intended to accelerate priority major infrastructure projects across England, including by: “minimising the burden of environmental assessments; making consultation requirements more proportionate; reforming habitats and species regulation; and increasing flexibility to make changes to a Development Consent Order once it has been submitted”. The Plan observes that the proposed reforms build on changes already underway, including new powers to enable fast track consenting for some projects and faster post-consent changes. Indeed, new primary and secondary legislation for environmental assessments and habitats and species regulation has been long anticipated in a post-Brexit world – and the Levelling Up and Regeneration Bill (LURB) does make provision for a new environmental assessment process. If changes to environmental assessments are to be made via this newly-announced primary legislation, does this suggest that it is the Environmental Outcomes Reports proposals in the LURB that could fall away or be amended? Albeit the Environmental Outcomes Reports are proposed for the whole of the UK, whereas the Planning and Infrastructure Bill appears to be for England only. And regarding the future of the LURB, recent Written Answers by junior Department for Levelling Up, Housing and Communities ministers refer to the ongoing future of that Bill. The day before the Growth Plan was published, Lee Rowley MP said in response to a question about giving residents greater input on local developments: “The Government has brought forward a Levelling Up and Regeneration Bill which currently contains proposals to allow communities to understand proposals more easily through making planning more digital and through simplifying the plan-making process. The Bill also currently contains a placeholder clause for ‘street votes’ to give residents a direct way to make their views known on certain proposals. The Bill will continue to be considered by Parliament in the coming months ahead.” Related to the above, the proposal to make consultation requirements “more proportionate” appears to mean for infrastructure projects, rather than necessarily for all planning applications. Notwithstanding, it is a fairly big shift to a narrative of growth and progress and away from the seemingly core objective of planning reform being higher levels of community engagement, which we have been accustomed to hearing. Other announcements related to the Bill’s proposals to speed up infrastructure delivery include a non-exhaustive list of infrastructure projects that will be accelerated, with the aim of construction starting on all those projects by the end of 2023. This includes 86 road projects, sixteen local transport projects, ten rail projects, 21 energy projects and two decarbonisation funds. The Growth Plan 2022 also announced that the Government will be: “bringing onshore wind planning policy in line with other infrastructure to allow it to be deployed more easily in England”. Albeit the Government also said via a Written Answer of 23 September that the position regarding onshore wind remains unchanged for now. The Plan also proposes reforms to accelerate roads delivery, including by consenting more through the Highways Act 1980. And there is a reference to “altering the system for Judicial Reviews so that lengthy claims can be avoided”, which follows recent reviews and proposed legislation in this regard (see Simonicity). Investment Zones The Chancellor has announced that the Government is already in discussion with 38 local and mayoral combined authority areas in England to set up Investment Zones, but also indicated that these represent the “areas keen to be involved now, with more to come”. Within these zones growth and development will be accelerated by liberalising the planning process, among other measures. Investment Zones will be delivered by the government working in partnership with Upper Tier Local Authorities (UTLAs) and Mayoral Combined Authorities (MCAs). It will be each area's responsibility to promote sites and show the potential economic benefit of development in the area. There has also been further commitment to establishing Freeports and the Government will work with local partners involved in current and prospective Freeports to consider how Investment Zones can benefit them. Particularly relevant to planning are the proposals for accelerated development: “There will be designated development sites to deliver growth and housing. Where planning applications are already in flight, they will be streamlined and we will work with sites to understand what specific measures are needed to unlock growth, including disapplying legacy EU red tape where appropriate. Development sites may be co-located with, or separate to, tax sites, depending on what makes most sense for the local economy”. It is not immediately clear how one lawfully streamlines a planning application that is already “in flight”. The intention might be that this applies to identified sites, rather than currently live planning applications; the Plan also refers to “the streamlined mechanism for securing planning permission” - this may have simply been a turn of phrase, given guidance now published (see below). The Government is yet to provide detail on the scale of deregulation but noted that they will seek to work with devolved administrations and local partners to introduce Investment Zones across the UK “as quickly as possible”.  The Plan promises that the Department for Levelling Up, Housing and Communities will shortly set out more detail on the planning offer. Accordingly, on 24 September, the Government published guidance on Investment Zones in England, which sets out the in-principle policy offer from the government to all MCAs and UTLAs in England, whether they have been involved in earlier discussions or not. It says: "For developments in the early stages of planning, and to encourage new development to come forward, there will be a new faster and more streamlined consent to grant planning permission. This consent will reduce many of the burdensome requirements which has made the planning of large sites slower and more complex than it should be, to enable developers to bring forward good quality development which responds to the market. In particular, we will: remove burdensome EU requirements which create paperwork and stall development but do not necessarily protect the environment; focus developer contributions on essential infrastructure requirements; reduce lengthy consultation with statutory bodies; and relax key national and local policy requirements. Key planning policies to ensure developments are well designed, maintain national policy on the Green Belt, protect our heritage, and address flood risk, highway and other public safety matters - along with building regulations - will continue to apply. For developments which already have permission, we will work with developers and local planning authorities to ensure planning is not a barrier to the accelerated delivery of these sites.  All Investment Zones will have a mandate to boost growth; in Zones, the planning system will not stand in the way of investment and development". (Emphasis is in the Guidance). The Government has identified the 38 authorities it has started discussions with regarding an Investment Zone being designated in their area and has identified the areas it considers to be “illustrative sites that may have the potential to accelerate growth and deliver housing in the way the Investment Zone programme envisage”. MCA or UTLA-funded development corporations or dedicated delivery vehicles could be established, provided they do not slow down development. Primary legislation is required in order to enable the offer on tax and simplified regulations. A fact sheet provides a summary of how Investment Zones are intended to work was published on 23 September.   HM Treasury, Growth Plan 2022 Department for Levelling Up, Housing & Communities and HM Treasury, Investment Zones in England Guidance Lichfields Resource on the Levelling Up and Regeneration Bill    

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Auctioning the High Street?

Auctioning the High Street?

Emily Thomson 26 Aug 2022
11 May 2022 saw the publishing of the Government’s draft Levelling Up and Regeneration Bill (“the Bill”). The draft legislation contains details of the government’s proposed rental auction scheme for vacant high street premises. As explained in my colleague Alison Bembenek’s blog (‘Levelling Up and Regeneration Bill – implications for high streets / town centres’) the Bill includes tools designed to help UK high streets. Part 8 of The Bill proposes new powers for local authorities to bring vacant premises in town centres back into use through rental auctions. So what will these rental auctions comprise in practice and will the impact ultimately be positive for the health of our town centres?   Designating High Streets The Bill allows local authorities to designate a street as a ‘high street’ if it considers that “the street is important to the local economy because of a concentration of high-street uses of premises on the street.” The Bill defines what could be considered as a ‘high-street use’ and it is a long list! The uses include shops and offices, services to visiting members of the public, restaurants, bars, pubs and cafes, use for public entertainment or recreation, community halls and meeting places, and some manufacturing and industrial processes (albeit only if they can reasonably be carried out “in proximity to, and compatibly with” the other uses). Whilst its helpful the Bill identifies a wide range of uses as being key components of the high street, it remains to be seen what other tools will help plan the high street in a more proactive manner.   What are Vacant Premises? Once designated, vacant units can be subject to local authority intervention if the local authority considers occupation would be beneficial to the local economy, society, or environment.   A unit is classed as vacant if it has been continuously unoccupied for a year or, broadly, if it has been unoccupied for at least 366 days in the last two years. A ‘local benefit condition’ must also be satisfied before the local authority can begin the process of compulsory re-letting of vacant premises. For example, if they consider that the occupation of the premises for a suitable high-street use is deemed beneficial to the local economy, society or environment. On the surface, this condition should be easy to satisfy, although the exact criteria of assessment has not been published yet.     What Happens Next? After satisfying the vacancy and local benefit conditions, an ‘initial letting notice’ should be served on the landlord of the premises. This notice prevents the landlord from granting any tenancy or license for those premises (or entering into any agreement to do so) without the local authority’s written consent while it is in force (this can be up to 10 weeks) – though it does not apply to the grant of a tenancy agreed before the initial letting notice took effect. If the landlord requests the written consent of the local authority to let the property during the initial letting notice period, the local authority must give consent for letting if: The term of the proposed tenancy, would begin within the period of eight weeks of the service of the initial letting;  The term of the letting would be at least one year; and  The tenancy would be likely to lead to the occupation of the premises for activity that involves the regular presence of people at the premises.  The local authority can serve a final letting notice if the premises have not been let within eight weeks (but before the initial notice expires). Once the final letting notice is served, the local authority may start the rental auction procedure. A final letting notice will last for 14 weeks, during which the landlord cannot grant any tenancy or license of the premises or carry out works on them, without the local authority’s written consent.   Can Landlords Appeal? In short, yes. The landlord has 14 days from the service of a final letting notice to serve a counter notice on the local authority. This must state that, if the final letting notice is not withdrawn, the landlord intends to appeal, and set out on what grounds the appeal would be brought. Any appeal must be made to the County Court within 28 days of the counter notice. If no tenancy has been granted and no appeal made after a final letting notice has been served, the local authority can start the rental auction.   The Rental Auction Process The Bill describes the rental auction as “a process for finding persons who would be willing to take tenancy of the premises… and ascertaining the consideration that they would be willing to give in order to do so.” Separate regulations will set out the process, including how the “successful bidder” is identified. The devil will be in the detail as to how the process will ensure that the successful party is beneficial to the future health of the high street. When there is a successful bidder, the local authority can enter into a tenancy contract with them for the tenancy of the premises. The contract will be the same as if it were entered into by the landlord of the premises. The Bill also explains that the contract may allow the tenant or landlord to carry out pre-tenancy works.   Final Thoughts Lichfields will be closely monitoring the progress of the Levelling Up and Regeneration Bill, including any amendments proposed. Will high street rental auctions help to re-invigorate our high streets and create better co-operation between local authorities and landlords, or will they force premises to auction without finding a suitable long-term occupier? As it currently stands, this measure would transform the powers of local authorities on the high street by binding landlords without their consent. Perhaps this threat of intervention will force landlords to act first. That said, there are questions around whether this tool will be effective at reoccupying premises that have been vacant for a number of years without attracting any interest. Those with high street properties will hope for a rebalancing of the scales so that they are given greater negotiating powers with local authorities as to whether their premises are up for auction. In theory the landlord could be forced to carry out works it does not want to, to facilitate a tenant that they have not chosen to occupy the premises – all under a contract that has been imposed upon them and at a rent that they otherwise may not have accepted. However, the Bill does state that “the local authority must have regard to any representations made by the landlord.” At the moment, the high street rental auction seems like a relatively blunt tool. Indeed, some may take the view that, if it were that easy, landlords would be able to find suitable tenants for vacant premises for themselves. The tool has the potential to create tension between the shared goal of reviving town centres and the normal rights of property owners. Please get in touch if you have any queries on this and we will be happy to help. Alternatively, you can visit the Lichfields website which includes a dedicated Levelling Up and Regeneration Bill Resource which is regularly updated and includes our analysis, insights and thought leadership on the Bill.     Header image: Sora Shimazaki via Pexels  

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