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TAN1: Gone but not forgotten

TAN1: Gone but not forgotten

Arwel Evans 09 Jul 2020
On 26th March 2020, the Minister for Housing and Local Government, Julie James, announced that Technical Advice Note 1 (TAN1: Joint Housing Land Availability Studies) had been revoked and that the Five-Year Housing Land Supply section of Planning Policy Wales had been replaced by an interim policy statement. She also announced that Edition 3 of the Development Plan Manual had been published. To summarise, the Five-Year Land Supply policy in Wales has been removed and replaced by a new method of monitoring housing delivery based on trajectories set out in Local Development Plans (LDPs). The requirement for decision makers to afford ‘substantial weight’ to the lack of housing delivery has been removed. This signifies a clear message from Welsh Government that a Plan-led approach to the delivery of homes is paramount with ‘speculative’ applications for residential development on unallocated sites outside of the settlement boundary not being looked at favourably. At face value, the new approach will make it harder for such sites to be promoted. Recent Planning Appeal Decisions There have, however, been some interesting appeal decisions that illustrate the Planning Inspectorate’s approach to matters of housing delivery following the change in policy. In summary, these decisions show that housing delivery remains an important consideration in determining planning appeals (and applications), especially in situations where the Local Plan or the Replacement Local Plan remains some distance from adoption. Figure 1 demonstrates the current progress of Local Development Plans in Wales. Figure one: LDP Current Progress (June 2020) Source: Lichfields Land south of Rhos Road, Penyffordd, Flintshire (APP/A6835/A/3243303) 36 dwellings for people over the age of 55 The unallocated appeal site lies outside the settlement boundary. In allowing the appeal on 27 April 2020 the head of the Planning Inspectorate in Wales, Tony Thickett, stated (paragraph 8): “The changes to PPW and revocation of TAN1 have not reduced the importance of delivering new housing, just the way delivery is planned, measured and monitored. PPW, as revised, states that: ‘Under-delivery against the trajectory may require a specific early review of the development plan’. In my view that is a clear indication that the government is committed to ensuring that the planning system delivers the housing Wales needs and that under delivery is a material consideration.” (Lichfields emphasis). Mr Thickett helpfully clarified that, despite the recent policy changes, the under-delivery of housing remains a material consideration. He then sets out matters to be considered in determining the weight to be attributed to under delivery, as follows: The extent of the shortfall; The length of time there has been a shortfall; and, How soon the Council will be able to demonstrate through an adopted LDP, how the housing needs of the area are to be met. He concluded that, in this case, the shortfall was significant both in terms of quantum and the amount of time that the housing land supply had been inadequate. The fact that the Unitary Development Plan (UDP) is time expired and that Flintshire’s first LDP[1] is still some 12-18 months away from adoption means that a Plan-led solution to the housing shortfall will not be forthcoming in the near future. Against this context, the Inspector accepted that the site is needed to provide a short-term solution to the housing supply issues. Land North of Highfields, Coedely, Tonyrefail (APP/L6940/A/20/3246396)76 dwellings Similar to the Penyffordd appeal, this site also lies outside the settlement boundary and is set in the context of an LDP that is nearly time expired with very limited progress made on a LDP review[2]. In allowing the appeal on 12 June 2020, Inspector Joanne Burston explained at paragraph 44 that: “….the current 5YHLS situation is serious in that there is a significant shortfall. Consequently, while the proposal would be contrary to the development plan taken as a whole, material considerations indicate that the determination should be otherwise than in accordance with that plan.” Again, the Inspector notes the recent changes to national policy and guidance and states at paragraph 33 that: “Given the revocation of TAN 1 the decision maker has the discretion, based on the evidence and facts of the appeal, to determine the weight to be applied to housing need. In the case before me the Council accepts that they can only demonstrate a housing land supply (HLS) of 1.3 years. In this respect I also note the appellant’s evidence that there has been a persistent under delivery in the supply of housing for some 13 years and that this is likely to continue given the projected timescale for the adoption of the LDP Review.”  (Lichfields emphasis). Interestingly, the Inspector actually made use of the five-year supply method to quantify the shortfall. This is likely to be a reflection of the fact that appeal was made prior to the revocation of the five-year land requirement policy and evidence was presented in respect of this matter. The Inspector used this evidence to highlight the severity of the housing land supply problem in Rhondda Cynon Taf County Borough and the need for intervention. We would not, however, expect to see detailed discussions about the five-year housing land supply position in planning appeal decisions going forward. In explaining the need for the site, the Inspector went on to highlight revised paragraph 4.2.12 of PPW which states: “…that planning authorities should also identify when interventions may be required to deliver the housing supply, including for specific sites.” The Inspector clearly felt that allowing this appeal represented a suitable intervention that would assist in the delivery of housing supply in Rhondda Cynon Taf. Land west of Bryn Isa, Vicarage Lane, Gresford, Wrexham (APP/H6955/A/19/3240973)44 dwellings This appeal was dismissed on 24 April 2020 mainly on green wedge impacts but nevertheless contains a useful commentary here about the consideration of housing land supply, particularly in relation to the weight to be given to an emerging LDP in remedying the lack of housing delivery. The Inspector (Joanne Burston again) explained that the decision maker has discretion, based on the evidence and facts of the appeal, to determine the weight to be applied to housing need. In this case the Council again agreed that there was a shortfall of housing land supply but argued that it was taking steps to address this through the emerging LDP. However, in respect of this point, the Inspector stated (paragraphs 36 and 37): “Whilst the eLDP is at an advanced stage, I am mindful that the Plan’s examination is still ongoing, and the Inspectors are yet to submit their report. In such circumstances I consider that only limited weight can be given to the eLDP.   Nonetheless, it is not for me to make a judgement on the outcome of the ongoing LDP examination. Therefore, as it stands there is a need for housing, a matter which weighs significantly in favour of the appeal.” (Lichfields emphasis). This decision is helpful in noting that until the LDP is found sound then it cannot be concluded that the Council is taking reasonable and timely action to remedy the lack of housing delivery. In the context of the current state of play in respect of LDP preparation and review across Wales, this conclusion will cause some concern for many authorities. Conclusion and takeaway These appeal decisions (all issued after 26 March 2020) are both timely and helpful in demonstrating that housing delivery is still an important consideration. We have not identified any planning appeal decisions in which the revocation of the requirement to demonstrate a five-year housing supply has directly resulted in the housing need case being rejected by an Inspector. Whilst the weight to be given to the under-delivery of housing is now a matter for the decision maker and will depend on the circumstances of each case, Inspector Thickett sets out some useful and logical parameters for considering the weight to be attributed to under-delivery. The appeal decisions should act as a warning to local planning authorities about the need to maintain an up-to-date adopted LDP and to ensure that housing delivery meets the trajectory. If housing delivery is insufficient and the LDP is out-of-date, then this (still) presents opportunities for developers to bring sites forward. Indeed, subject to site-specific considerations, local planning authorities should welcome such proposals at planning application stage as an appropriate short-term intervention. Opportunities should be sought to work positively with those authorities that have housing delivery issues, especially where sites are sustainably located, free from constraints and can demonstrate adherence with Planning Policy Wales’ placemaking principles. Contact Lichfields to discuss strategies for obtaining planning permission for housing sites in Wales.   [1] The statutory development plan in Flintshire is the Unitary Development Plan (adopted in 2011). The authority hopes to adopt its first Local Development Plan in the summer of 2021.[2] The statutory development plan in Rhondda Cynon Taf is the Local Development Plan (adopted in 2011). The end date of the LDP is 2021 and it is unlikely that a Replacement Local Development Plan will be in place until 2024 at the earliest.  

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In the midst of every crisis, lies great opportunity
Whilst not unexpected, the recently published ONS figures that reveal a 20.4% contraction in the UK economy in April are still shocking. This decline – which relates to a single month and adds to the decline of 5.8% experienced in March 2020 – is three times greater than the total reduction experienced during the last recession and equates to a fall of approximately £30 billion in Gross Value Added (GVA). The ONS analysis splits the economy into 14 sectors and shows that all of these, except for Public Administration and Defence (which remained stagnant), contracted in April 2020, with 10 sectors experiencing a more than 20% decline in GVA, and 11 experiencing their largest falls since records began in January 1997. In providing an overall figure for the UK economy, this data obscures regional variations. Analysis by Lichfields has shown that South East Wales is at particular risk of short-term economic contraction because of its strong reliance upon hospitality, manufacturing and education sectors. Given that South East Wales accounts for 52% of Wales’ total GVA[1], a severe regional shock will have a negative impact on the wider Welsh economy. Looking to the future The economic impacts of Covid-19 will inevitably be felt for a considerable period of time but many commentators have pointed out that April may be the worst month as there was a partial relaxation of lockdown in England in May. However, a stricter lockdown continued in Wales into June, potentially resulting in a further divergence between the economic performance of Wales and England. As detailed in our Covid-19 Economic Recovery Framework, planning for the longer term recovery is critical to mitigating a risk of continued economic decline. History has taught us that a period of recession can result in opportunities for specific sectors to both lead the recovery and reshape the profile of the local economy. Although the circumstances that have promoted the current downturn are very different to anything that has gone before, and the scale of decline is unparalleled, there are already clear signs of the sectors that are likely to emerge stronger than before. Health / life-sciences As a health crisis, Covid-19 has been fought by front-line health workers and its resolution lies in a health solution. The manufacturing of pharmaceuticals was the only manufacturing subsector that displayed upward growth in April (+4.7%), following on from strong performance over recent months. This growth would undoubtedly have been boosted by the investment and increased activity that has been focused on Covid-19 treatment, vaccines and testing but ONS also reports higher demand for general pharmaceutical products, with strong growth in domestic facing output in April 2020. We anticipate that there will be a greater focus on this sector in the future in terms of both public and private sector investment. Logistics The logistics sector has been instrumental in keeping the country going through the pandemic. Be it through the supply and distribution of PPE to front line staff, delivery of food and other essential items to stores, or the increase in online shopping, the logistics sector has stepped up to the challenge and played a critical role in supporting and protecting people. Globally there was a 25% increase in airfreight volume in March 2020 compared to March 2019[2], whilst increased levels of road and rail freight have been the backbone of domestic logistics during the pandemic. The improved efficiencies that have been forced upon the sector put it in a strong position to continue to meet growing demands as consumption patterns change for good, particularly if a decentralisation in population and economic activity does occur. Energy/environmental More than 200 top UK firms and investors have called on the government to deliver a Covid-19 recovery plan that prioritises the environment[3]. There is an increasing argument that Covid-19 should be viewed as a pivotal moment in the shift to a green economy. Specific proposals that have been put forward include: Increased investment in low carbon innovation and industries; Focusing on those sectors that can support the environment; and, Ensuring that companies that receive government support are operating in a manner that is consistent with climate goals.   A growth in the green economy would align very closely with the Welsh Government’s sustainability objectives and its aspirations for green growth to be fuelled by an increased reliance on green energy.   IT / Communications The UK-wide lockdown forced us all to look to technology for work, entertainment and social contact. Reflecting the importance that we are all placing on video communications, the share price of Zoom has doubled since the start of March[4] and ONS has noted that telecommunication and programming and broadcasting activities have also been resilient to falls in output. It is likely that some of the practices that we have adopted out of necessity will remain commonplace after Covid-19 has passed and that such platforms will continue to enjoy significant growth. In addition, expected increased future levels of home working (compared to the pre-Covid-19 baseline) and growth in key sectors such as life-sciences, green energy and logistics will all rely on continued advances in IT. Tourism / hospitality This sector suffered the most significant contraction in April 2020 (-88.1%) and remains shut-down. Although there are very real concerns about the survival of many tourism businesses, there is the potential that it will grow significantly in the future. This will particularly be the case if restrictions on international travel remain and if people remain nervous about international travel – both of which may encourage them to choose to holiday in Britain instead of travelling to overseas destinations. Implications for South East Wales The objective of the Cardiff Capital Region (CCR) City Deal is to “bring about significant economic growth in the region through investment, upskilling and improved physical and digital connectivity.”[5] The City Deal Investment Framework seeks to “improve the business environment within the CCR, creating rich ecosystems that stretch and support the development of [the following] key sectors in the economy, improving comparative performance against other cities and regions in the UK and internationally.”[6] There are close parallels between these sectors and those that I have identified above: Life sciences and energy & environment are specifically identified by the CCR; The wider energy and environment sector also incorporates transport engineering activities that relate to electric and other ultra-low emission vehicles; Britishvolt has identified St Athan as its ‘preferred’ location for the UK’s first battery Gigafactory, with the first stage of the plant expected to be fully functional by Q3 2023[7]; and, The broad IT sector incorporates compound semiconductors, fintech, cyber security and AI. This synergy gives confidence that these sectors will experience growth and spearhead the much-needed recovery of the Welsh economy. As to the two remaining sectors that I have identified: The strategic location and accessibility of South East Wales, and the scale of its population and strength of its economy presents significant logistics opportunities; and, The region accounts for 41% of total GVA for Wales in the accommodation and food service sector[8] which means that it is well placed to welcome visitors back when restrictions are lifted. The takeaway At a time of ongoing crisis, there are reasons to have some optimism about the future recovery. The latest economic headlines make for grim reading but we must look to the future with renewed vigour. Although the timing and rate of this recovery remain uncertain, its speed and strength will depend on the extent to which close collaboration can be forged between the Welsh Government, CCR, local authorities, business interest groups and individual businesses. Work should start now on ensuring a favourable environment to investment – through the creation of a positive planning regime, support for investment, training to ensure that the necessary skills are available, and a positive approach to residential development as a driving sector of the economy and essential to supporting a growing workforce. We will be considering these individual sectors in more detail in a series of more detailed blogs and Insight pieces, and will also be looking at the direction of the economy in different parts of Wales. [1] Source: StatsWales GVA by area and component[2] Source: https://www.statista.com/statistics/1112254/air-freight-volume-worldwide-covid-19/  Accessed 16 June 2020.[3] Source: https://www.bbc.co.uk/news/business-52851185  Accessed 16 June 2020.[4] Source: https://www.marketwatch.com Figure based on share price on at 1500 BST on 12 June 2020 ($230.39)[5] Source: https://www.cardiffcapitalregion.wales/[6] Source: https://www.cardiffcapitalregion.wales/wp-content/uploads/2019/06/ccr-investment-framework.pdf[7] Source: https://www.insidermedia.com/news/wales/south-wales-preferred-location-for-landmark-battery-gigafactory?utm_source=wales_newsletter&utm_campaign=wales_news_tracker&utm_medium=top_story_article Accessed 16 June 2020.[8] Source: Experian business strategies forecasts March 2020

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