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Class E: Getting to grips with new UCO flexibilities
Following changes that came into force on 1 September, this blog reflects on our experience working with Class E six weeks on. As reported in our blog at the time of the Government’s announcements, these changes represent the most fundamental change in town centre planning for over 30 years. Combining Use Class A1, A2, A3, B1 and parts of D2 into a new Class E. Creating a new F.1 and F.2 encompassing education and community type uses and making more uses Sui Generis (including pubs) introduces both new flexibilities and restrictions. So far, the new flexibilities seem to have been broadly welcomed, but there are already some unforeseen consequences emerging to be mindful of. The need for an overhaul Those working in town centre development had recognised for a long time that the Use Class Order (1987, as amended) was outdated, inflexible and needed to change. The planning system simply could not keep pace with changing trends and operators. Operators have struggled to fit neatly into use classes. The Use Classes Order did not account for blurred boundaries with a range and mix of uses within units. Coffee and bakery shops, had the potential to be A1, A3 or A5, depending on factors like the amount of seating, the proportion of takeaway sales and whether food is cooked or reheated on the premises. This lead operators to apply for a combination of A1, A3 and/or A5 use.   Image credit: @1ookmumnohands The rigid approach to categorisation also failed to keep up with the diverse mix of uses emerging within single units. For example, cycle shops blending workshop, bar, café and events space; or yoga classes and cookery classes taking place within a retail store. Whilst the high street was trying to respond to shifting consumer demands, the creaking system was deterring experiential and enrichening uses aimed at drawing customers in to centres and creating vibrancy throughout the day and into the evening. A more fluid and simplified approach to the categorisation of town centre uses was clearly needed. Unprecedented deregulation Previous consultation by Government in 2018 discussed merging A1-A3 uses to support the high street. However, few foresaw that these changes would be introduced so quickly, and especially not taking an even bolder encompassing of B1 and parts of D2. The Government seems to have been spurred on by coronavirus which has brought matters to a head earlier than anticipated.               This is particularly important at the present time as town centres seek to recover from the economic impact of Coronavirus. Modern high streets and town centres have changed so that they now seek to provide a wider range of facilities and services, including new emerging uses, that will attract people and make these areas viable now and in the future. Explanatory Memorandum to The Town and Country Planning (Use Classes) (Amendment) (England) Regulations 2020 No. 757 1         There was already the option to change between some town centre uses on a temporary basis, introduced in May 2019, subject to conditions and limitations and in some cases prior approval, but the changes introduced really did go well beyond what we have seen before. The radical nature of the changes possibly accounts for why so many are watching with interest for the outcome of the court challenge by Rights : Community : Action (RCA). The grounds of challenge included failure to properly consult before making the rules. Could the changes be quashed this month?  A change for the better? Local authorities and developers alike are still getting to grips with the new flexibilities. Here are some of the examples we’ve experienced to date: Is my business in Class E? Article 7 of the 2020 Order, in terms of transitional arrangements, confirms that if premises were in use Class A1, A2, A3 or B1 of the time of the previous Order on 31 August 2020, the building or land is to be treated, after the 1 September 2020, as being used for the purpose specified in Class E as on 31st August 2020. Updated Article 3 1(a) of the Use Class Order (as amended) importantly now states with regards to Class E (and F.1 and F.2) that the use of that building or that other land, or if specified, the use of part of that building or the other land ("part use"), for any other purpose of the same class is not to be taken to involve development of the land. The changes however do not override planning conditions and legal agreements – so these still need to be checked and taken into account in terms of restrictions on use. This may mean premises do not benefit from Class E and its flexibilities. In addition, for recently completed builds, if the unit has not yet been brought into use as permitted it would again not benefit from the flexibilities. Presumably the Government’s intention was to focus on bringing life back to older units in high streets - however this seems a notable flaw. There also remains a degree of debate about whether a use falls within Class E. For example, is a gastropub (arguably A3/A4) to be considered within Class E? The new Order specifies that “drinking establishments with expended food provision” are Sui Generis. A gastropub could arguably be considered as A3 if it is more dining oriented rather than drinking. But where does one draw the line? This distinction may be important for owners seeking to secure flexibility within Class E but others may require certainty for valuation or rating purposes. Certificates of lawful use may be increasingly be used to provide clarity and assurance in this regard.     How does one assess proposals for Class E? Assessing an application for Class E, which would previously have been a single more tightly defined use is now potentially mixed use. Assessing the impacts of some development (economic and transport) will be more problematic. Local authorities are likely to consider the worst-case parameters or consider imposing restrictive conditions. Whilst Class E provides flexibility, applicants need to be mindful of the potential implications of this approach and may choose to self-impose limitations at the application stage in order to avoid extensive mitigation. Should the planning application apply for Class E or a sub-category or activity? In order to avoid assessing a range of impact scenarios, applicants may choose to apply for sub-categories or activities within Class E, in the same way applications refer to food stores or bulky goods retail warehouses within the old Class A1. This could be done without directly referring to the sub-category, albeit it would be referred to in a condition controlling the operation of the Use Classes Order. This approach could minimise the amount of supporting evidence and assist the planning authority’s consideration of the planning application. How will the UCO changes affect the evidence base and plan making more generally? Traditionally evidence bases studies such as employment land and town centre/retail studies have focused on floorspace capacity projections adopting the old use classes. The creation of Class E and other changes has blurred the lines and there are significant overlaps. This is likely to lead to confusion and planning authorities will need to revisit their evidence base. Nevertheless, the need for sub-categories of use within Class E will be required. A global floorspace projection for Class E is unlikely to be appropriate or provide sufficient detail for plan making purposes. We are already seeing local authorities at early stages of plan making consider how they might control Class E flexibilities in their Primary Shopping Areas. For those already at advanced stages of plan making, changes to reflect the updated use class have had to be taken on board. For example, Brent in its Proposed Modifications to its Local Plan now refers to uses i.e. comparison retail, restaurant, takeaway rather than use classes. How can planning conditions be used to control development? To address the issues outlined above, we envisage planning authorities and applicants will make greater use of planning conditions to control the type of development that is implemented. This approach is not new, for many years Class A1 retail has been restrict via conditions in relation to the type of goods that can be sold. In the same way conditions restricting potentially harmful activities within Class E are likely to be applied.    How has PINS responded? In Richmondshire (appeal ref:  APP/ V2723/W/20/3247987) a change of use for a florist to a café considered in conflict with the development plan (due to loss of retail) the Inspector afforded “considerable weight” to the Use Classes Order and deemed to be “a significant fallback position”. Although it is still early days, this decision may be indicative of the direction of travel. Lichfields will be continuing to monitor the changes carefully and will provide further commentary as more experience is gained. If you would like to discuss any aspects of the recent changes of the Use Classes Order, please do get in contact.  

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Cause for concern? What does the new Standard Method mean for the North East?

Cause for concern? What does the new Standard Method mean for the North East?

Dominic Crowley, Fiona Braithwaite & Michael Hepburn 04 Sep 2020
The current Standard Method for calculating housing need was introduced in 2018 and was intended to significantly simplify the process of establishing local housing requirements and improve the efficiency of the plan-making process. It was a step in the right direction but fell significantly short of the mark on a number of key points including reliance on authorities choosing to set a far higher requirement than their minimum figure to achieve the national 300,000 dwellings per annum (dpa) target and driving need into London and the South East whilst doing the opposite in the North – a point which is certainly at odds with the Government’s agenda to ‘level up’ the economic and social disparities between many northern and southern authorities. On the 6th August, the Government announced proposals in its Changes to the Current Planning System document which seek to remedy the shortfalls of the current Standard Method; setting a much higher bar for many Local Authorities and resulting in an uplift to the national housing requirement of 35% against the current Standard Method - from 250,550 to 337,307dpa. The recent blog published by my colleague Bethan Haynes explores the national implications of the Standard Method however, for the purposes of this blog, we consider what the new Standard Method means for the North East. An Improvement on the Current Standard Method Taken at face-value, the revised Standard Method has a positive outcome for the region – seeking to address some of the previous concerns raised about the impact of assumptions within the calculation on the North. Almost all authorities across the North East see an uplift against the current method (aside from Stockton-on-Tees, County Durham and Newcastle upon Tyne which see a 6%, 10% and 25% reduction respectively) resulting in an overall increase of 1,026dpa (from 6,262dpa to 7,288dpa) from the current Standard Method in the region - an uplift of around 16%. In theory this is a positive step and may see additional opportunities for land promotion in authorities where there is an uplift against the current Standard Method as Local Plans progress and/or are reviewed. Contribution to the National Target Delve a little deeper into the figures however and it becomes apparent that some of the issues with the previous Standard Method remain. First and foremost is proportionality of distribution; whilst the North East sees a 16% increase from the current to revised method this still falls well below the 35% national average uplift that the revised calculation brings and is in fact the third lowest proportional increase nationally (with only Yorkshire and the Humber at 9% and the East at 15% holding smaller proportions of the uplift).This shift also results in a reduction in the contribution that the region makes to the national total from the already inadequate 2.5% under the current method down to only around 2.2% - significantly below the region’s existing national household contribution of around 5%[1]. This is particularly concerning when measured against some southern regions such as London which will see a staggering 67% increase from the current method and which would constitute over 25% of the national total housing requirement alone under the revised method. Restraining the Market The revised method also still provides significantly fewer homes than recent delivery in the region – a clear spatial disparity for northern authorities compared with central and southern regions where the Method sets a need figure that is often far in excess of that which the market has been able to achieve. For the North East, the shortfall between the proposed new method and recent delivery is around 2,800 dwellings per annum – over 25% of the average supply delivered across the region in the last 3 years. Whilst it must be acknowledged that this is an improvement against the current standard method position (which sees a shortfall of around 3,800dpa) it still falls far short of the numbers currently being delivered in the region and would effectively restrain the North East housing development industry. At a Local Authority level only two of the 12 authorities see an uplift against average recent delivery (Gateshead and South Tyneside) with some others falling well below the mark – most notably, Newcastle upon Tyne would see a 66% reduction against recent delivery. Why does the Standard Method have these Impacts? The new Standard Method is more complex than the original, moving away from the Government’s intention to make the process simple, transparent and understandable for non-experts. Whilst we are still analysing its mechanisms, it is clear that   Step 1 of the proposed Method still results in a low starting point upon which Step 2 is applied. It has been widely acknowledged (including by the Government) that an over-reliance on population projections provides an inadequate basis for calculating housing need due to the way in which they continue patterns of historic undersupply in the region. Whilst the new Standard Method includes an alternative increase based on the size of the existing stock (if that is higher than the population projection), for most North Eastern authorities this isn’t enough (a 0.5% increase is used despite the Government acknowledging that annual growth is typically 1%) to overcome the constraints imposed by the baseline starting point for the Standard Method. The Government’s intention to use the Standard Method to address affordability problems means that, when considered nationally, the North East’s affordability problems appear relatively less significant. This means that the part of the equation that boosts supply based on unaffordability is heavily skewed towards the acute problems with this issue in some southern authorities. It therefore doesn’t lift the North Eastern authority’s figures high enough to recover from the baseline starting position earlier in the equation. In fact, housing need is based on a wide variety of factors, often with complex interactions. For example, the Government’s own consultation document refers to regeneration and stock mismatch due to insufficient homes of the right size, type and tenure at paragraph 19. However, the Standard Method largely disregards these factors and focuses solely on affordability, meaning North Eastern authorities’ ability to transform their areas, meet local housing needs and drive economic growth is constrained. Whilst each authority can choose to enhance its Standard Method figure, previous research by Lichfields has confirmed that in reality this does not occur sufficiently.       Conclusions There is therefore huge cause for concern; whilst the overall increase in housing need figures will bring opportunities in some areas, the revised Standard Method would actually lead to harmful impacts for the North East. The disparity with previous delivery and the reduction in proportional distribution (particularly at a national level) are key areas of concern and risk restricting growth across the region to a level well below that which the market has delivered in recent years. Far from ‘levelling up’ the country, the new Standard Method could actually exacerbate the problem. Opportunities however still exist - unless a dramatic increase can be achieved and sustained from the recent peak in delivery of c.40,000dpa the housing requirement set for London is likely to underdeliver by at least 50,000 units per annum . This alone would mean 300,000dpa nationally is not achievable without other regions delivering significantly more homes than the current and revised methods make provision for. The North East may hold part of the solution to this – if the revised standard method could ensure a more proportional distribution of the housing requirement across the country and seek to set much more ambitious minimum figures in authorities which have demonstrated they can deliver well in excess of the current and proposed methods (as many in the North East have) this would offer multiple benefits by reducing the over-reliance on London to achieve the 300,000dpa target and driving more clearly towards the Government’s ambition to ‘level up’ the country with all of the associated economic and social benefits that would bring for the North. Changes to the Standard Method to achieve this could involve tweaks and adjustments to the Government’s equation (a greater increase based on the existing housing stock or an adjustment to the affordability multiplier for example). However, the solution may lie in recognising that it simply isn’t possible to standardise such a complicated matter, which becomes many times more complex when the huge variations in conditions across the country are taken into account. A more nuanced and subtle approach is required linked to the specific circumstances of each authority. That could mean returning to the pre-Standard Method approach and introducing a lesser degree of standardisation but still allowing for the crucial adjustments needed to reflect local circumstances such as historic growth, economic growth and spatial strategies. Whilst that won’t be a (relatively) simple equation, it should produce far more appropriate outcomes for more authorities and prevent the extreme positive and negative results generated by the Standard Method. We are currently undertaking more research for various organisations to understand why the equation produces such negative results for the North East and how this can be rectified. The Government’s consultation on the proposed revised Standard Method closes at 11:45pm on 1 October 2020. Please get in touch if you are interested in making representations. For implications of what the New Standard Method means for other regions, see below perspectives: London   |   North West   |   Thames Valley   |   South West   |   West Midlands   |  Yorkshire and The Humber [1] ONS 2018-based household projections for local authorities and higher administrative areas within England, Table 406  

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