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Planning matters

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What the health? The planning system and healthcare service funding
As the ongoing COVID-19 pandemic continues to reshape our daily lives, one thing has also become clear: we need to think more seriously about the links between the built environment and our physical and mental health. To date, this discussion has generally been weighted more towards access to open space and suitably-sized homes with windows, but the issues are more broadly based. Even though the Government’s Planning for the Future White Paper has charted some radical reforms to planning obligations, the current planning obligation framework will continue to be in force for a few more years, and there are some critical issues which will continue to need to be addressed over this interim period. Planning for health Pre-pandemic, the revised National Planning Policy Framework (2019) [NPPF] sought to include a stronger emphasis on health and well-being; it states that the planning system should support “strong, vibrant and healthy communities” (Para 8b) and should take account of “local strategies to improve health… for all sections of the community” (Para 92b). But, it also introduced the notion of addressing inadequate ‘services’ (Para 81b). The development industry in large part accepts the need to contribute to providing capital funding for education and health infrastructure, but despite the NPPF’s subtle shift to include services, little consideration had been given to what role, if any, the development industry should play in helping to address healthcare services revenue funding challenges (beyond its contribution via general taxation). By contrast, the NHS has proverbially left the running blocks. Faced with budget cuts, resource constraints, and need to keep up with an ageing population, one NHS Trust has been seeking s106 funding for acute healthcare services from via planning obligations since 2014. These initial requests were successively rejected at planning appeals, as the Inspectors considered that such funding requests were not in accordance with Regulation 122 of the Community Infrastructure Levy (CIL) Regulations (2012) and did not relate to the development. However, two appeals, recovered by the Secretary of State [SoS] in 2016, concluded that such requests were material to the consideration of the applications, were acceptable in principle, and were necessary to make the development acceptable in planning terms.[1] The ‘Securing Section 106 and community infrastructure levy funds’ (September 2018) guidance followed this, in which NHS Improvement and Trusts highlighted the capital and revenue opportunities for NHS trusts impacted by local development.[2] An un-funded funding gap So how are Trusts impacted by development beyond infrastructure requirements? The key issue for Trusts is the Government’s current funding mechanism. Trusts are commissioned by Clinical Commissioning Groups [CCGs] to provide planned and emergency acute healthcare to the population of areas under the terms of the NHS Standard Contract. However, this contract is an outturn activity volume-based contract which is agreed annually with CCGs and is based on the previous year’s activity. The contract, therefore, does not account for in-year population increases until the next year, and any additional healthcare activities resultant from an increase in the population of an area – which Trusts are legally obliged to undertake – remain unfunded. Simply put, there’s a potential hole in Trust’s budgets arising from population growth in an area, and a greater number of NHS Trusts are now turning their attention to the development industry to plug these ‘funding gaps’ through S106 contributions. Having dealt with a number of these requests, we can see there are practical concerns about how some NHS Trust’s are seeking s106 contributions. The Regulation 122 Tests requires s106 requests to be “fairly and reasonably related in scale and kind to the development”. In this regard, it is important that Trusts only make requests for the un-costed ‘new persons’ that would likely and reasonably present themselves for treatment because of a proposed development. This is because some of the population of the development will have moved from within the area, and will have already been considered within the service provider’s funding model. At present, there are legitimate questions regarding whether the Trusts’ calculations address this. In addition, these requests are typically made well into the determination period of planning applications. Indeed, one Trust submitted four s106 requests to developments which had already been determined by a planning committee in Worcester – requests which were subsequently rejected.[3] Consequently, there is little room left for the negotiation of additional s106 monies beyond which has already been agreed or found viable. A return to marginal viability debates? Turning to the latter point, and setting aside broader concerns about the Trusts’ calculations, the manner in which Trusts are currently engaging in the planning system is somewhat at odds with the spirit of the NPPF, and more importantly, likely to hinder the Government’s ambition to ‘build, build, build’. The revised NPPF shifted the consideration of the ‘viability’ of sites from the decision-making stage to the forefront of the planning process – plan-making – and is clear that Local Plans “should set out the contributions expected from development… [and] such policies should not undermine the deliverability of the plan.” (Para 34).  In the context of education contributions, the Planning Practice Guidance [PPG] states that obligations should be set out in the local plan, so that they are subject to examination [4]. The aim of this is to ensure that these obligations are sufficiently certain and “can be accurately accounted for in the price paid for land”.4 This is particularly important, as paragraph 57 of the NPPF serves to limit the scope for re-testing the viability of developments post-Local Plan examination. As such, developers are likely to find it more difficult to justify diverging from planning obligations on viability grounds. However, currently, few authorities have grappled with the revised NPPF through local plan reviews, and few, if any, local plans contain an explicit reference to the need for developments to fund healthcare services, let alone including a standardised approach. It is therefore difficult for the development industry to factor these ‘unknown’ costs into the viability of the development. Whilst the economic implications of COVID-19 are still crystalising, the viability of sites will invariably be at the forefront of many plan-making and decision-making discussions. This is likely to limit Trusts further, as the viability assumptions of sites will have already been ‘baked-in’, and the economic uncertainty of COVID-19 will invariably impact the viability of some schemes. Moreover, LPAs may have to make tough decisions in the balancing exercise, to ensure that planning obligations align with their area’s particular priorities: fund the NHS? deliver affordable housing in an area where there is already an acute shortfall? Or ensure this brownfield site is brought back in to use? The Government has been clear that a critical part of our economic recovery plan is to ‘build, build, build’ the homes and infrastructure this country needs. But there is still uncertainty from Councils and the Government as to whether such requests are acceptable. Fareham Borough Council rejected a c.£6m S106 request for the Welborne Garden Village in October 2019[5], and the SoS recently rejected a £1m request in Teignbridge in June 2020. Coupled with eleventh-hour requests, discussions and negotiations between LPAs, applicants and Trusts, there is a risk that such requests will delay the decision-making process for applications which are proposing to deliver housing to meet needs, which also deliver wider economic benefits. What the above highlights is that, increasingly, LPA officers will have to weigh up the importantance of further S106 requests in the planning balance, and make difficult decisions as to which best align with the LPA’s priorities, and importantly, which can be viably be delivered. Despite opening up planning obligations to the provision of public ‘services’, the Government is seemingly silent on whether planning should cooperate and integrate with service providers. Historically, whilst both NHS Trusts and CCG’s have been consulted in the preparation of local plans, this has largely in respect of the infrastructure-related impacts of planned housing growth. If planning is to play a role in mitigating the impacts of development on service funding – and evidence from the West Midlands indicates that Trusts believe it should – there is a cogent need for them to engage more proactively in the planning system form an earlier stage, or more specifically, the plan-making process. In the interim, we would urge our developer and housebuilders clients to have a more keen regard to these potential planning obligations when acquiring land and considering site viability, and to discuss this with us. [1] Appeal References: APP/T3725/A/14/2221613 and APP/T3725/A/14/2229398[2] https://www.hsj.co.uk/south-warwickshire-nhs-foundation-trust/massive-pool-of-untapped-cash-for-nhs-from-property-developers/7020202.article[3] https://www.worcesternews.co.uk/news/17918031.city-council-agrees-reject-hospital-39-s-plea-millions-massive-housing-developments/[4] PPG ID: 23b-004-20190901[5] Application Reference: P/17/0266/OA

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Local authorities and the climate change emergency
2019 saw a significant global awakening to climate change concerns and the impacts the global society is having on the wellbeing of our planet and its ecosystems. The UK government’s response to date is embedded in the Climate Change Act, which commits to reducing greenhouse gas emissions by at least 100% of 1990 levels (net zero) by 2050. Meanwhile, the response on the street has taken the form of large-scale public demonstrations by school children and environmental protest groups. In parallel with initiatives across the globe, local authorities and organisations such as IEMA have declared a climate change emergency. These organisations have published policies and strategies to reduce the country’s greenhouse gas emissions to zero by 2050 or sooner, reduce our consumption of energy, reduce the amount of waste we produce and identify areas in which the general public can assist to slow down or reverse climate change. The implication of these policies on the development sector has resulted in many organisations developing company-wide policies to meet these targets and the development of more sustainable projects to implement change. Implementing change will be key to maintaining a balanced economy, society and environment. There’s no hiding from the fact that Climate Change is taking place at an unprecedented rate, in spite what vocal contrarians may say. With emissions of greenhouse gases globally continuing to rise, 75% of which is associated with energy generation, our current trajectory has led the majority of Local Authorities in the UK to commit to achieving a carbon neutral position through decision making and their activities. The effects of climate change are already being felt with notable changes to weather felt across the globe, which are resulting in greater temperature fluctuations, flooding and in the UK hotter, drier summers and milder, wetter winters with an increase in the frequency and intensity of extreme weather events. Over recent years, in the UK we have experienced severe floods which have caused major damage to property and businesses across the country. The likelihood of such events as well as hotter and dryer summers such as those recently experienced in the last decade are likely to increase having impacts on resource availability, workplace productivity, health and wellbeing. On a global scale, 196 nation states adopted the Paris Agreement of December 2015. The agreement is a binding international treaty on the climate tailored to the ambitions and capabilities of all nations. Its main goal is to limit average temperature increases by 2100 to within 2°C above pre-industrial levels of the late 1800’s, and to less than 1.5°C above those levels whenever possible. This will be achieved by the convergence of national strategies toward emission trends compatible with this global temperature target. A landmark UN Intergovernmental Panel on Climate Change reporting The Special Report on Global Warming of 1.5°C , 2018 however warns that the window to limit average world temperature increases to under 1.5 °C and avoid the worst climate change impacts could close within the next 12 (now 11) years, with current levels of global greenhouse gas emissions needing to be reduced by almost half in that period. Putting the brakes on the average increase in global temperature cannot be achieved quickly, particularly given the oceans act as a heat sink and will continue to contribute to climate change for decades to come given the near 40 years delay in the release of this energy back into the atmosphere notwithstanding our own efforts in limiting carbon emissions. In the UK, the new Johnson Government affirms its commitment to deliver net zero greenhouse gases by 2050, however a growing body of opinion both at home and internationally is that this is not soon enough and that given the urgency of the problem the planet and its ecosystems face, an earlier timeframe for carbon zero emissions must be achieved. The UK is already legally committed to an 80% reduction in carbon emissions by 2050 (relative to their 1990 levels) and was recently recognised as only one of 18 developed economies to have driven down carbon dioxide emissions over the last decade. The Committee on Climate Change published its influential Net Zero, The UK's contribution to stopping global warming in May 2019 which provided further impetus for action at the national and local level and the new Environment Bill, will set out how the UK will undertake its environmental governance once we leave the EU. At a local level, approaching 400 of the UK’s principal local authorities have declared a climate change emergency, making it one of the fastest growing environmental movements in recent history. Reflecting the urgency of action needed, typically, authorities commit to being carbon neutral by 2025 to 2030 – significantly earlier than the government’s Climate Change Act target date.  Authorities will put in place measures to achieve a carbon neutral position/ negative, through schemes and behavioural change, including the provision and procurement of services and the decisions it makes. This will be particularly evident in the control and planning for development, sustainable transport infrastructure and enhancement of green fabric and biodiversity.  Through planning control, planning authorities may potentially require planning applications to demonstrate that proposals reflect carbon neural objectives, even if these are not explicitly set out in their adopted development plans. This may typically take the form of making meaningful commitment to utilising or generating low carbon energy as part of the development such as installing photo voltaic capability on south facing roofs or utilising energy from and connecting to a district heating system or utilising ground source heating opportunities. Examples of this are: Exeter City Council declared a climate change emergency on the 23rd July 2019. In Exeter, the City Council has highlighted the city’s reputation as a UK pioneer in Passivhaus building standards, utilising renewable energy, moving towards an electric vehicle fleet and delivering large-scale district heating networks. The city benefits from energy recovery facility which converts non-recyclable residual waste into a source of renewable energy. District heating networks facilitate greater local energy resilience, the potential to capture and use waste heat, and provide an easier transition to fossil fuel free technologies where hot water is pumped through an expanding district heating network throughout the city. New development proposals in the city are encouraged to link in with the network. District heating scheme to provide a low carbon source of heating and hot water to 2800 homes and electrical supply from a new 3.5MW capacity Energy Centre and saving an estimated 7,000 tonnes of CO2 per year. Woodlands and forests are a natural asset and a natural carbon sink which play an important role to the eco-system providing benefit such as preventing flood risk, soil conservation and boosting biodiversity. To reinforce the government’s commitment to the planting 11 million trees by 2022, it launched a £50 million Woodland Carbon Guarantee Scheme to help boost tree-planting rates in the fight against climate change. The scheme is open to owner - occupier land managers tenants, landlords and licensors, who have control of land and all the activities needed to meet the guarantee scheme obligations. At the local level, planning authorities will look to ensure that development schemes make provision for new and replacement tree planting. Leeds City Council declared a climate change emergency on the 27th March 2019. Amongst a host of other commitments (which also include district heating), the City Council looks to increase the amount of tree cover in the district from 6.9% to the England average of 8.2% (an additional 32,000 trees). Adopted planning policy requires that where trees are lost to development they must be replaced by a factor of 3 to 1. Net increase of tree cover in landscaping schemes enables positive benefit through improvement of ‘well-being’ for development users. Authorities in general are also taking steps to ensure their own built estate becomes carbon neutral through the reduced use of steel and concrete in new development and reducing greenhouse gas emissions. Following the Greater London Authority lead, town centre congestion charges are likely to be introduced in many cities across the Country to reduce reliance on vehicles whilst maximising opportunities for sustainable transport, cycling and walking, reducing exhaust emissions and improving air quality by limiting access to town centres by non- electric vehicles or pedestrianisation. Cities throughout the UK including Bristol, Birmingham, Edinburgh, Newcastle, Nottingham, Leeds and Manchester propose to introduce congestion charging measures over the next few years. As the effects of the changing climate around the world continue to hit the headlines, the need for radical change has been recognised by many including local authorities around the world, particularly so, here in the UK. Recognising the growing momentum, Authorities through their functions and responsibilities accept the need to bring about systematic change to the way our living environment is impacted upon by our day to day activities. Increasingly, part of this is being secured through requirements on developers of new schemes at the planning stage.

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