Planning matters

As we wait for the Government to publish its response to the recent NPPF consultation, and issue a revised version of the Framework, the issue of housing need is being debated more widely than ever by politicians, planners and those involved in the industry. But aside from the question of how many new homes we need and where they should go, there is another central issue at the heart of any discussion regarding the delivery of new housing: viability. At its most basic level, viability relates to the relative balance between the value generated by a development and the costs associated with its delivery. If a scheme is not viable then, generally speaking, it is unlikely to come forward. The issue of development viability has long been an important consideration in the planning system with the focus tending to have been on whether specific policy requirements (for example, relating to affordable housing provision of Section 106 contributions) can be sustained. Planning policy in England and Wales now seeks to front-load all consideration of development viability so that it is given a much greater emphasis at strategic plan preparation stage. By placing viability at the heart of the plan-making process, the assumption is that developments that accord with the strategic plan will be viable. It would be for an applicant to demonstrate why the viability of their development is compromised because of changes in circumstances since the plan was prepared and adopted. At a time of continued very high inflation – with the cost of building materials rising at a particularly alarming rate – house prices stagnating or even falling in many places, and policy expectations increasing, the viability challenge has never been so acute. Coupled with the deepening housing crisis, the need to get any consideration of viability right is greater than ever. In considering viability, planning policy advocates the use of standardised inputs. This was considered in detail by Dove J in the case of R (Holborn Studios) v London Borough of Hackney (2020). Paragraph 63 of that judgment noted that the PPG “makes clear the preparation of a viability assessment ‘is not usually specific to that developer and thereby need not contain commercially sensitive data’.” In the absence of any guidance on the inputs that should be applied, Lichfields’ Fine Margins research provides clarity on the issue. The combination of viability being front loaded into the plan-making process and the standardisation of inputs has necessitated a change in approach. As a pre-eminent planning and development consultancy, which understands the relationship between planning policy and viability and have extensive experience in assisting clients through the plan making process, Lichfields is uniquely placed to help. How can Viability help? Our new viability tool is designed to help clients navigate the local plan/CIL process by supporting the promotion of sites, assessing evidence prepared to inform strategic plans, and informing our presentation of evidence to local plan and CIL examination. A summary of the key stages of viability input is summarised below: VIEW VIABILITY FRAMEWORK The tool can be applied in a flexible way and shaped to reflect the increasing level of detail that is required as a strategic plan moves through the various stages of consultation towards submission, examination and adoption. This might include a high-level overview of viability issues to inform candidate site submissions, with additional detail provided as plans for the site and the local authority’s policy aspirations become clearer.  In addition, recognising the need for strategic plans to be flexible in responding to changing circumstances, our Viability tool can also be applied at planning application stage and inform the case for the renegotiation of viability where necessary. The ongoing – and deepening – housing crisis can be overcome. To do so, it will be necessary to bring an adequate supply of high-quality homes, of the right types and tenures, and in the right places. Ensuring that those developments are viable will be essential to their delivery. Viability now lies at the heart of the planning process and needs to be given due regard from the earliest stages of site promotion. Lichfields has the experience and expertise to navigate this area of the system and provide a robust, evidence-led case for development at each phase of the planning process. In so doing, we can assist in ensuring that local plans include deliverable housing allocations and that viable new housing sites come forward in way that balance the needs of all stakeholders whilst also providing high quality new spaces for people to live. Please get in touch if you would like to discuss how we might help you.

For development management colleagues in Local Planning Authorities NPF4 could be a real headache. The letter from the Chief Planner and Planning Minister on Transitional Arrangements suggests it is all a question of incompatibility: but what constitutes incompatibility isn’t clearly defined. It is not necessarily a simple task to decide whether or not a policy written in the LDP aligned to NPF3, Scottish Planning Policy and Strategic Development Plans (where applicable) will be compatible with the NPF4 which has a very different emphasis. The NPF is no longer set out as the “spatial expression of the Government Economic Strategy”. Rather the “global climate emergency and the nature crisis have formed the foundations for the spatial strategy as a whole”. No longer is there “a presumption in favour of development that contributes to sustainable development”, the release valve that allows proposals not anticipated by the adopted LDP to be considered on their merits. No longer do Local Development Plans have to “provide for a minimum of 5 years effective land supply at all times.” Rather LDPs are expected to identify a Local Housing Land Requirement which is expected to exceed the 10-year minimum set out in Annex E of NPF4. Green belts are to be restricted to areas where there is “significant danger of unsustainable growth in car-based commuting or suburbanisation of the countryside”. This a change from their previous stated purpose. City of Edinburgh Council and Stirling Council have taken very different approaches to the conundrum that is incompatibility. Edinburgh Council have published a policy framework and Stirling have prepared guidance on considering the issue. Edinburgh’s approach puts a line through existing policies that it has decided are incompatible with NPF4.  Stirling Council on the other hand have prepared guiding principles so that incompatibility can be considered on a case-by-case basis. It is disappointing that the Transitional Arrangements do not provide a single coherent approach that could be applied by all local planning authorities. Legal opinions from KCs are already emerging[1] and it is looking more and more likely that the courts will have to decide once decisions have been appealed and outcomes regarding what constitutes incompatibility and in what circumstances have been challenged.    We have been giving this notion of incompatibility some thought. It is clear that consideration must be given to each policy in its entirety as well as to context and policy intent. Just because policies are different does not mean they are necessarily incompatible.  The Transitional Guidance suggests that “provisions that are contradictory or in conflict would be likely to be considered incompatible” but the use of “likely” makes it clear that Scottish Government do not consider that this will always be the case. Planning judgement is going to be critical if we are to navigate a way through the next 5 years until new LDPs are in place that meet the requirements of NPF4. Perhaps the area where there will be the greatest thought needed is in consideration of housing proposals and proposals in the green belt but equally proposals for the expansion or reconfiguration of existing retail parks will be hard as demonstrated by the recent Reporters decision on land adjacent to Inshes Retail Park at Inverness. In this case it was decided that the proposals were contrary to NPF4 Policy 28 because the land was not within the commercial centre boundary even though they were in an area allocated for such uses in the LDP.  This seems unreasonable and we await to see if this case of incompatibility is challenged. In terms of housing, Policy 16 is causing much head scratching. There are some who very much want this policy to apply now and believe that it should take precedence over all policies in existing LDPs which might be considered incompatible with it, particularly where these contain a release policy. There are different examples of release polices.  They are all, however, essentially the safety valve that allows housing to come forward in unallocated areas because there is a shortfall in delivery and the Local Authority’s identified supply is not meeting its housing needs.  NPF4 does not contain such a safety valve.  Many of us in the industry are however of the view that adopted LDPs must deliver what they set out to deliver and this applies to housing as much as anything else.  If a plan sets out it will deliver X number of new homes which it has evidenced are needed it is completely unreasonable to stop the plan from doing such.  This view has recently been supported by the courts[2] although this judgement does pre-date NPF4 by a month. So where does this take us in terms of incompatibility? The main thrust of NPF4 in terms of development land is that in order to be supported sites must have been identified in the LDP and allocated for the purpose proposed. This applies to all sorts of development types – business, industry, retail, drive throughs, housing, etc. But, this is not how current LDPs have been conceived. Current LDPs did not need to allocate all potential development sites because policies were in place to enable sites to come forward and be judged on their individual merits. In terms of housing some LDPs were adopted with a known shortfall of sites when compared with the identified need.  Also, not all the effective sites in current housing land audits actually have allocations, about 40% of Edinburgh’s capacity is from unallocated sites for example.  So, there is a danger that NPF4 could stifle the development of perfectly good sites that meet the tests of existing LDPs and indeed the majority of the provisions of NPF4, simply because they are not currently allocated.  In some circumstances that will mean that much needed homes in a local area cannot be delivered.  This is not a sensible approach, and a broader view of policy intent is required if we are to avoid some LDPs failing to deliver the housing and economic growth they have identified as needed because of NPF4. It is the view of many of us that Policy 16 Housing in NPF4 cannot apply until a new LDP is in place because it requires a totally different approach to be taken in terms of the identification of land for housing, the allocation of sites and delivery. Essential steps associated with the preparation of a new style LDP must have taken place before the policy can be applied. In the meantime, therefore, it is our view that existing housing policies cannot be dismissed for being incompatible.  To do so would result in a policy vacuum.  The intent of Policy 16 is clearly stated - “to encourage, promote and facilitate the delivery of more high quality, affordable and sustainable homes, in the right locations”. The policy intent is not to put the brakes on housing development until new LDPs are in place that implement the new requirements and so this policy intent needs to be delivered in the context of the existing LDPs. We would suggest that if local planning authorities agree that proposals are for “high quality, affordable and sustainable homes, in the right locations” then these are compatible with the policy intent of Policy 16 and therefore should be supported. This logic needs to extend to all policies in terms of consideration of incompatibility. The first questions should be ‘does the NPF4 policy require a new approach?’, ‘do all sites required need to be allocated and have they been?’, etc. Finally, let’s have a look at Policy 8, green belts. The policy intent does not differ much from the guidance previously provided by Scottish Planning Policy but where there is a significant change of focus is on the purpose of green belts. Policy 8 clearly states  (emphasis added) that “green belts will not be necessary for most settlements” and goes on to restrict their designation to “settlements where there is a significant danger of unsustainable growth in car-based commuting or suburbanisation of the countryside.”  Current green belts do not only perform this function and previous guidance was much looser in terms of circumstances whereby a Local Development Plan may wish to designate green belts.  It is our view that this means that all designated green belts must be reviewed in the making of new LDPs to ensure they meet this higher test of purpose. On this basis Policy 8 cannot be brought into effect until new LDPs are in place as current green belts are designated on the basis of “ directing development to the most appropriate locations and supporting regeneration; • protecting and enhancing the character, landscape setting and identity of the settlement; and • protecting and providing access to open space”. These are clearly different purposes which means that green belts as currently designated may not be necessary in terms of restricting development to the type described in NPF4 Policy 8.  This should mean that local planning authorities that have policies that allow development in the green belt that go beyond the uses in Policy 8 are not incompatible.  The purpose of the green belt as set recognises that such developments can happen, and this should continue to be the case until such time as the green belt is reassessed and a new LDP is put in place that aligns with Policy 8. There is much to grapple with, and I do not envy my developer clients or my Development Management counterparts, I am sure many are having sleepless nights. The task at hand is a difficult one but planning judgement remains the key to making good planning decisions. It looks like NPF4 and its role in the development plan is going to keep us all busy.     [1] Land North of B792, Mossend – Opinion of James Findlay  [2] Hens Nest Road, East Whitburn judgement 2023csih3.pdf (scotcourts.gov.uk)