South West planning news, November 2018

Bristol Mayor Marvin Rees delivered his annual ‘State of the City’ speech at the Wills Memorial Building on Wednesday 17 October. The key message was his focus on improving the Council’s delivery record, on building homes, initiating major redevelopment projects and improving the Council’s own operational efficiency.

The Council anticipates delivering over 2000 homes by 2020, 900 of which will be affordable, and exceeding one of Rees’s seven pledges announced when he became Mayor. He also stressed his role in investigating the feasibility of a mass transit system for the city and the launch of Bristol’s own housing company, as well as explaining the reasoning behind the well-publicised arena decision.

Lastly, the Mayor suggested on the night he would not stand for re-election in 2020.

On 2 October it was announced by Alun Cairns, Secretary of State for Wales, that all tolls will be removed at the two Severn Crossings on 17 December 2018.

Bath City Council are conducting a second round of consultation on more detailed proposals for the city’s Clean Air Zone, due to come into place from late 2020. The proposals include implementing a ‘Class D’ Zone with charges of £9 per day for higher emission cars, taxis and LGVs and £100 per day for buses, coaches and HGVs. Any vehicle that does not meet the Government’s minimum emissions standards will be charged when travelling through or entering the Zone, with no reductions currently proposed for residents other than disabled car users.

The six-week consultation is running until 26 November 2018. The final decision will be made in December this year.

A series of planning-related announcements, publications and consultations mentioned in the Autumn Budget have followed up on commitments made earlier in October at the Conservative party conference. 

Of particular note are the following, which are covered in more detail in other news stories below:

• the Government’s publication of its response to submissions on the developer contributions consultation;
• the publication of Sir Oliver Letwin’s ‘Independent review of build out: final report’; and
• a new consultation regarding a number of matters (including proposals for new permitted development rights and possible changes to the Use Classes Order) under the banner, ‘Planning reform: supporting the high street and increasing the delivery of new homes’.
  
  

The Government has also published the findings from an external examination of the Help to Buy equity loan scheme, and a new consultation on ‘Innovation in affordable home ownership: a call for proposals for private shared ownership’.

Plans to end the council borrowing cap, new local authority (LA) plan-making partnerships being formed to win infrastructure funding - and more resources for planning departments – were all announced or first mooted at the Tory party conference at the beginning of October.

It was Prime Minister Theresa May who on 3 October announced the proposed removal of the limit to the amount that councils can borrow to build new housing.  And in the Budget, it was confirmed that the Housing Revenue Account cap that limits local authority borrowing for housebuilding was being abolished with immediate effect.  It is estimated that up to 10,000 additional homes a year should now be capable of being brought forward.

Although the cap was raised in the 2017 budget, allowing councils in high demand areas an extra £1bn to bid for, LAs could only borrow a certain amount against their Housing Revenue Account.

Housing Minister Kit Malthouse spoke at several Conference fringe events, stating at each one how the Government wants to repeat the Oxfordshire Housing Deal elsewhere i.e. it is encouraging more councils to prepare strategic plans jointly, with Government funding from the Housing Infrastructure Fund (HIF) resulting.  As then announced in the Budget, the Government will now provide additional funds to support housing delivery – specifically:

• an extra £500m for the HIF (now totalling £5.5bn) to support the delivery of up to 650,000 homes;
• the allocation of £291m of the HIF to unlock 18,000 homes in East London; and
• £8.5m to support up to 500 neighbourhood planning areas to allocate or permission land for discounted homes.
  
  

The Government also announced that Homes England was to publish a new five-year strategic business plan, which was then published the following day.

The Minister also acknowledged at a 2 October Conference fringe event that the planning system is under-resourced, with too few experienced LA planning officers. He referred to the well-known, widely held view that the development industry would be prepared to pay more in fees, if this were to speed application determination and when a start could be made on-site. This was a reference to the housing White Paper, which mooted a possible further 20% fee increase ‘for those authorities who are delivering the homes their communities need’. There has not yet been a consultation on the detail and the matter is still clearly under consideration.

On 26 October, MHCLG launched the expected consultation on changes to the standard method for assessing housing need. It follows the September 2018 publication of ONS 2016-based household projections, that lead to significantly lower housing need than the 300,000 homes per year that the Government intends to achieve in supply terms by the mid-2020’s.

The consultation also proposes several clarifications to national planning policy; subject to responses, it is intended that a revised NPPF will result.

The consultation closes on 7 December 2018.

In summary, the Government has decided not to change the standard methodology and proposes clarifying via national planning practice guidance that:

• In the short-term, the 2014-household projections provide the demographic baseline for local housing need assessment; and
• the 2016-based household projections do not qualify as an exceptional circumstance to depart from the standard methodology.

In the longer term, the Government proposes to review the formula, to establish a new method capable of delivering the Government’s aspirations by the time the next set of projections is issued.

The consultation also seeks views on the approach to take for the application of the standard methodology cap to spatial development strategies, and proposes ‘minor clarifications’ to the NPPF, to:

• paragraph 177 (relating to the Habitats Regulations assessment and the presumption in favour, to reflect the ruling in People over Wind);
• footnote 37 (on local housing need); and
• the definitions of ‘local housing need’ and ‘deliverable’ in a revised glossary.

Launched on Budget day, MHCLG is now consulting on a 4-part series of proposals set out in a single document but bearing little or no relationship to one another. It includes:

• Part 1: new and amended permitted development rights (PDR) and changes to use classes are set out, to support high street regeneration and for extending existing buildings upwards to create new homes;
• Part 2: proposals for amending the rules for surplus local authority land disposal at less than best value;
• Part 3: a draft listed building consent order to support the work of the Canal & River Trust; and
• Part 4: draft guidance on the compulsory purchase powers of new town development corporations.

Part 1

To support greater diversity and footfall on the high street, and subject to prior approval, Part 1 proposes:

1. a new PDR to allow shops (Use Class A1), financial and professional services (A2), hot food takeaways (A5), betting shops, pay day loan shops and launderettes to change to office use (B1);

2. a new PDR to allow hot food takeaways (A5) to change to residential use (C3);

3. extending the current temporary change of use PDR for shops (A1) financial and professional services (A2), restaurants and cafes (A3), hot food takeaways (A5), offices (B1), non-residential institutions (D1), assembly and leisure uses (D2), betting shops and pay day loan shops to change to A1, A2, A3 or B1, to also allow changes to a public library, exhibition hall, museum, clinic or health centre. The period of the temporary use would also be extended from 2 to 3 years;

4. changing the A Class in the Use Classes Order, either to:

(a) remove the current named uses and replace them with ‘a broader definition of uses for the sale, display or service to visiting members of the public’; or

(b) create a new use class for a mix of uses within A1, A2 and A3 uses ‘beyond that which is considered to be ancillary’, to replace the existing A1, A2 and A3 and create a single use class to cover shops, financial and professional services, restaurants and cafes;

5. creating a new PDR that would be subject to prior approval (covering design, siting, appearance, impact on amenity, flooding and contamination risks, transport and highways), to allow additional storeys to be built above buildings in commercial, residential (C3) and some other uses (such as out-of-centre retail and leisure parks, or health centres). A total of a five-storey height limit would be imposed (but more for freestanding blocks of flats), with other height restrictions also mooted. Design codes could be used to improve design quality. An application fee per dwelling would be proposed;

6. making permanent the change of use PDR from storage or distribution to residential, and for larger extensions to dwellinghouses;

7. removing the PDR for telephone kiosks, and the deemed consent for an advertisement on a single side; and

8. increasing the existing PDR height limit for an electric vehicle recharging point upstand to no more than 2.3m, from 1.6m.

Last but certainly not least and as proposed in the 2017 Budget, views are sought at the end of Part 1 on a new PDR that would promote higher density development – it would be for ‘the high quality redevelopment of commercial sites, including demolition and replacement build as residential’, potentially retaining existing developer contributions. It is acknowledged that the size of site and impacts would influence the form any prior approval might take;

Part 2

In Part 2, the Government is proposing setting a new LA land disposal undervalue threshold of £5 million (currently £2 million) - or alternatively one of £10 million, or even no undervalue - to provide LAs with substantially more, or total flexibility to dispose of land without the involvement of the Secretary of State. Put simply, undervalue disposal is currently possible, if it would improve economic, social or environmental wellbeing, but has to have Secretary of State consent e.g. if above certain thresholds, or if the land is held for planning purposes.

Part 3

Part 3 of the consultation proposes a draft Listed Building Consent Order (in Annex C of the consultation document) that has, with Historic England and the Canal & River Trust, identified work which the Trust routinely undertakes to the listed waterway structures it is responsible for across England. This work would be granted listed building consent by the Order.

Part 4

Part 4 explains new draft guidance on compulsory purchase for locally and nationally overseen new town development corporations; the draft guidance itself is attached to the consultation as Annex D.

The consultation closes on 14 January 2019.

The Government’s response to consultation responses on supporting housing delivery through developer contributions was published on Budget Day. The consultation itself ended in May this year.

In terms of next steps, the Government proposes changes to the Community Infrastructure Levy (CIL) Regulations 2010 (as amended); it is stated that these changes could also be used to incentivise the build out of developments. The Government intends to consult on draft amendment regulations ‘in due course’.

In direct response to consultation responses, the following measures are proposed:

• using existing powers, combined authorities will be able to take forward a Strategic Infrastructure Tariff (groups of charging authorities will also be encouraged to pool CIL receipts);
  
  
• the s106 pooling restriction will be lifted in all areas, while the uptake and continued use of the levy will be incentivised;
  
  
• the required reporting of developer contributions from CIL and s106 planning obligations, through an Infrastructure Funding Statement, on a statutory basis (to also help prevent ‘double-dipping’);
  
  
• it will be possible for s106 planning obligations to collect contributions towards infrastructure also included on a charging authority’s Regulation 123 list (with the new reporting measure above, preventing double-dipping);
  
  
• it will be made clear that LAs can seek a fee in a s106 from applicants, towards monitoring obligations;
  
  
• for development originally permitted before CIL came into force, levy liabilities will be capable of being balanced between different phases, and abatement for such phased planning permissions will be introduced;
  
  
• the indexation applied to development that is both originally permitted and then amended while CIL is in force will be amended, to align with the approach taken in the recently amended Reg. 128A, for s73 permissions;
  
  
• new PPG, to assist LAs in preparing CIL charging schedules, particularly in relation to infrastructure requirements, viability assessments and levy data collection; and
  
  
• charging authorities will still have to consult on draft charging schedules but the statutory requirement for two separate rounds of consultation in every circumstance will be removed.

A further consultation is proposed on changing the index used for levy rates for residential development to the House Price Index (using local-level data on an annual basis), and for using the Consumer Price Index for indexing CIL for non-residential development.

It should be noted that some other consultation proposals are not being taken forward; there will be no amendments to CIL rules to allow LAs to ‘better to capture increases in land value where this was justified by infrastructure needs’ and there are no changes proposed to current exemptions (although penalties will be modified).

In the longer term, the Government states that it will bring forward proposals for allowing joint planning committees to charge a Strategic Infrastructure Tariff, and will review options for giving other groups the power to levy one as well.

The Government otherwise states rather vaguely that ongoing technical and operational issues with CIL will be considered and addressed.

On Budget day, MHCLG published Sir Oliver Letwin’s Independent review of build out rates: final report; the report makes a number of ‘policy lever’ recommendations on how to close the significant gap between the number of housing completions and the amount of land allocated or permissioned on large sites in areas of high housing demand.

The complexity of his recommendations come as something of a surprise, far removed from his early trains of thought set out in a letter to the Chancellor in March and then Draft Analysis published in June 2018. He now recommends elaborate changes to the planning system:

1. New planning rules for future large sites of over 1,500 units in areas of high housing demand, that would require developers to provide ‘a diversity of offerings’ - ‘diversification principles’ would be set out in new planning policy;

2. The Government establishing a ‘National Expert Committee’, to advise local authorities on how to interpret the diversity requirements for large sites and to arbitrate where there is disagreement between the local authority and the developer;

3. For these new rules to be effective in the shorter term, the Government should:

(a) provide incentives to diversify existing such sites, by making government funding conditional on a s106 reflecting the new planning policy; and

(b) allocate ‘a small amount of funding’ to a ‘large sites’ viability fund’, to withstand non-viability arising from the new diversity provisions – a recognition of the potential problems of transition;

4. For maximising change in build out rates and large scale development quality in the longer term, the Government should:

(a) in places with high housing demand, introduce a power for LPAs to designate local plan areas as single large sites, to then create master plans and design codes, leading to diversity and good design to promote rapid market absorption and build out rates;

(b) give LAs powers to purchase such land compulsorily ‘at prices which reflect the value of those sites once they have planning permission and a master plan that reflects the new diversity requirements’ (‘ten times’ existing use value); and

(c) give LAs statutory powers to control the development of these designated large sites through:

(i) a Local Development Company (LDC) that would establish a master plan and design code, and then bring in private capital through a non-recourse special purpose vehicle, before ‘parcelling up’ the site and selling parcels to builders/providers offering housing of different types and tenures; or

(ii) the LA establishing a Local Authority Master Planner (LAMP) to develop a master plan and full design code for the site, and then enable a privately financed Infrastructure Development Company (IDC) to purchase the land, develop the infrastructure, and promote the same variety of housing as in the LDC model.

In relation to the Paddington Cube proposal in London, the Court of Appeal has ruled (in R (Save Britain’s Heritage) v Secretary of State for Communities and Local Government and Westminster City Council and Great Western Developments Ltd.) that the Secretary of State had, in 2001, made an express promise that reasons would be given for decisions not to call in an application under s77 of the Town and Country Planning Act 1990 (as amended) (‘the Act’).

The promise was in a Green Paper, and announced in both Houses as follows:

‘As part of our fundamental review of the planning system, we have decided that as from today we shall give reasons for our decision not to call in planning applications. This decision, which forms part of the raft of measures in our Planning Green Paper published today, is in the interest of transparency, good administration and best practice. The courts have established that there is no legal obligation to provide reasons for not calling in an application […]’

Despite not having been the Government’s practice since 2014, the Judge stated:

‘I do not accept the proposition that a policy which has been promised can be withdrawn simply by a change in the template of letters sent privately to individual LPAs and objectors, particularly where, as here, the alleged change is itself very difficult to discern [...] An unequivocal promise was made, and that unequivocal promise should have been publicly withdrawn when (or if) a conscious decision was taken no longer to give reasons for not calling in applications under s.77.’