News
England planning news, October 2020
12 Oct 2020
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Headline news |
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First Homes prepare to debut
Amendments to the Community Infrastructure Levy (CIL) Regulations 2010 that would make CIL relief available to First Homes have been laid before Parliament in draft.
The Community Infrastructure Levy (Amendment) (England) (No. 2) Regulations 2020 are intended to come into force on 16 November 2020, subject to Parliamentary approval (in both Houses).
First Homes are an affordable housing for sale product that would be available to eligible first time buyers; they will have a discount of at least 30% from market value, which would be retained in perpetuity. They are effectively Starter Homes mark II, but are to be brought forward via policy not legislation. It is currently proposed that national policy would require 25% of affordable housing secured on a development to be First Homes. This policy would be a material consideration from the date of publication.
The draft CIL regulations were laid while the second consultation on First Homes was still running, suggesting that the Government will bring First Homes forward swiftly and in a form at least similar to that proposed. There is likely to be significant work for local planning authorities arising from the management of the First Homes product, particularly if the scheme is successful.
We provide an overview of First Homes as consulted on here. The consultation, which also included proposed changes to the affordable housing threshold, the standard method for calculating housing need (see story 05 below) and permission in principle on application, closed on 1 October.
The draft Community Infrastructure Levy (Amendment) (England) (No. 2) Regulations 2020
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Quote of the month |
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One of the key messages I would like to convey is please don’t let uncertainty stop you from progressing your work, particularly in respect to the preparation of your plans for your area or your projects. It’s important that we try not to lose momentum and that we have strong plans which can facilitate our recovery from the impacts of the pandemic; and importantly that address our communities housing needs and the economic challenges that lie ahead.
Chief Planner Joanna Averley, Planning Newsletter, October 2020 |
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A S106 agreement cannot be assumed to be binding on a S73 planning permission
This August, a judgement was handed down by the High Court that serves as an important reminder of the ties between a planning permission and any planning obligations secured via S106 agreement. It also reminds us of the extent to which the principles established in Lambeth may apply more broadly to the interpretation of S106 agreements and other public documents.
In Norfolk Homes Limited v North Norfolk DC 2020, Lord Justice Holgate determined that the implementation of planning permission granted under S73 of the Town and Country Planning Act 1990 was not capable of triggering the requirements of a S106 planning obligation related to an earlier planning permission by implication, where the terms of the original S106 agreement (S106) were not so broad as to include any further subsequent permissions.
In June 2012, the council granted outline planning permission for 85 homes, subject to a S106 requiring the delivery of an affordable housing scheme alongside a number of other financial contributions. Following this, in 2013 and again in 2015, two subsequent S73 permissions were granted with conditions differing to the original permission, however, no deed of variation was entered into so as to link the new permissions with the original S106.
Following the discharge of the pre-commencement conditions, the applicant requested confirmation from the council that the development commenced under the latter S73 permission was not bound by the terms of the S106, on the grounds that the S106 referred explicitly to the earlier permission and did not preclude any subsequent applications for the same site.
With the council declining to accept this position, the issue was taken to the High Court, where Norfolk Homes Limited sought declaration that the terms of the S106 did not apply and for the S016 S106 to be removed from the Land Charges register.
In its defence, the Council relied heavily upon the Supreme Court’s decision in Lambeth, in so far as the starting point should be to find the ‘natural and ordinary meaning’ of the words used within document; when interpreting the 2012 S106 agreement additional wording should be implied, so that reference to the ‘development’ should be read as including any additional subsequent S73 permissions that followed from the 2012 permission. The council contended that it was inappropriate to apply the ‘pure principles of contractual interpretation to S106 agreements’, and that document should not be construed in a way as to only consider the ‘contracting parties’ intentions and according to the facts and circumstances at the time of the contract’.
The Court, however, rejected the council’s argument. Holgate LJ noted that having regard to the case of Trump in the Supreme Court, there was nothing to indicate that the public nature of planning documents justified a broader and more lenient approach to interpretation than would normally be applied to an agreement such as a legal contract entered under S106.
‘In particular, there is nothing in Trump to suggest that it is permissible to have regard to post-contract conduct or an omission, for example in the present case an omission to require a fresh s.106 obligation or a deed of variation to be entered into before granting a s. 73 permission.’’
Discussing the implications of Lambeth on the matter at hand, Holgate LJ noted at para 81.:
‘There is nothing in the Lambeth decision which alters the standard principles of construction for public documents.’
‘Lambeth was simply concerned with the construction of a fresh permission granted under s.73, the 2014 permission, the language of which was clear and unambiguous. It did not involve the interpretation of an earlier document, to see whether the language used in that document could be treated as referring to subsequent grants of permission or other documents.
[…]
Turning to the 2012 agreement, Holgate LJ said that the language was unambiguous and clear. While the parties may have chosen to draft the agreement in such a way so that development pursuant to the 2012 permission, or any subsequent grant of permission conforming to that description of development would trigger the obligation, this had not been the case.
There had been nothing to stop the council negotiating a deed of variation with the applicant; ‘the omission of that step in the present case is not a sound reason for modifying, or indeed distorting, sound principles for the interpretation of legal documents’.
Whilst the case may not amount to new law, it does serve as a useful reminder that when making an application under S73, it is crucial for both parties to understand the extent to which any previous S106 agreement may be relied upon, and whether or not a deed of variation will need to be entered in to.
Norfolk Homes Limited v North Norfolk District Council, Norfolk County Council [2020] EWHC 2265
Permitted development homes update: cross party pressure leads to space standards promise
Just prior to a wide-ranging debate in the House of Commons regarding permitted development rights that create new homes, which covered space standards, amenity impacts, implications for leaseholders, lack of affordable housing and infrastructure contributions and the light industrial to permitted development right, the Government announced that space standards would be required to meet the Nationally Described Space Standard. We provide an overview of the cross-party concerns raised in the debate.
At the beginning of September, Labour confirmed in the House of Commons that they had against the three statutory instruments that brought into force permitted development rights (PDRs) to knock down commercial or residential and add storeys and to add storeys to commercial or residential buildings in order to provide more residential floorspace.
When one of these statutory instruments was debated in the Lords on 10 September, Lord Greenhalgh said in response to calls for space standards (including from former MHCLG minister, Lord Bourne) “we think that developers are best placed to assess the type and size of homes best suited to the local market. We know that some well-designed new homes delivered through both planning applications and permitted development rights are smaller than the voluntary space standards”.
But on 30 September, the day the House of Commons debated a motion by the Labour party that the statutory instruments be annulled, a press release was issued saying: “all new homes in England delivered through these [permitted development] rights will in the future have to meet the Nationally Described Space Standard”. We believe that changes to legislation will be required, but could come into force this month. If the legislation requires the space Nationally Described Space Standard to be met, this will be a more stringent requirement than for planning applications.
It appears that the Government anticipated that a number of Tory MPs would raise concerns about space standards, which they did, notwithstanding the press release, which was noted by those who spoke.
Links were drawn between homes to be built via the new PDRs and concerns related to leasehold reform, and the potential impact of the additional storeys on existing leaseholders within a building. In this context, Sir Peter Bottomley MP, Father of the House, voted against the Government and in favour of the motion to annul the SI that provides PDRs to add storeys to residential blocks, having said it is “one of the worst things that has got through Government in my time here, which has been quite long”.
Responding to concerns about how additional storeys might look, the Housing Minister said:
“Character and aspect are important, and if the proposed building were to be out of character with what is already there, the local authority would be quite within its rights to deny prior approval”.
The absence of planning contributions arising from permitted development schemes was mentioned several times, but the Housing Minister did not address it.
Clive Betts, Labour MP and Chair of MHCLG Select Committee, was among those call for planning obligations to be required for such schemes, having been a key voice behind seeking space standards.
Robert Halfon MP (Conservative) said:
“On the basis that the Secretary of State is putting an end to rabbit-hutch housing […] I will support the Government. However, as I have said previously to my right hon. Friend the Minister, I ask that the Government hold to account those councils that are socially cleansing their boroughs by moving people to strange areas without any links to their families and friends. If councils must make out-of-area placements, they should contribute financially to the receiving councils’ associated costs, so that Harlow does not bear the brunt financially.
Extended PDRs have caused irreparable damage to Harlow’s landscape, social cohesion and reputation. There are unintended consequences to the drain on our local resources, which is why I strongly welcome the Secretary of State’s moves”.
The Government is currently consulting on whether a new Infrastructure Levy, which would combine the Community Infrastructure Levy (CIL) and other financial obligations that are currently secured via s106, should require PDR developments that provide new housing but no new floorspace to contribute to the proposed Infrastructure Levy. After that consultation closes the Government might respond on securing affordable housing via s106 agreements for permitted development schemes and securing CIL on schemes that do not create floorspace.
The debate also referenced the lapsing of the PDR for change of use from light industrial to residential, with a Tory MP saying he understood the Government will not be renewing this right, but sought confirmation. This was not given, but during the debate several MPs referenced conversions of units on industrial estates. This permitted development right has fallen away and there is no indication that it will be reinstated.
Separate from the above debate, on 14 and 15 October, a judicial review claim relating to the some of the permitted development developments rights discussed and the amendments to the Use Classes Order will be heard. The claimant, Rights: Community: Action, seeks the quashing of the Orders that introduced permitted development rights for adding storeys to dwellings and to commercial and mixed use buildings, demolishing residential or commercial rebuilding residential and changes to the Use Classes Order (on the basis that laying them was unlawful), but not the statutory instrument that introduced additional storeys to residential PDR, i.e:
- The Town and Country Planning (General Permitted Development) (England) (Amendment) (No. 2) Order 2020/755;
- The Town and Country Planning (General Permitted Development) (England) (Amendment) (No. 3) Order 2020/756;
- The Town and Country Planning (Use Classes) (Amendment) (England) Regulations 2020/757
The grounds of the claim and the claimant’s skeleton argument can be found on the Rights : Community : Action website.
The Government has said that a full impact statement will be published in respect of each of the Orders that are subject of the claim, but we do not believe that these have been published yet.
UK Parliament, House of Commons Hansard, Town and Country Planning debateUK Parliament, House of Lards Hansard, Town and Country Planning (Permitted Development and Miscellaneous Amendments) (England) (Coronavirus) Regulations 2020MHCLG, Technical housing standards – nationally described space standardRights : Community : Action, Planning: more information on our Judicial Review
Changes to the Use Classes Order are now in force
On 1 September, amendments to the Use Classes Order came into force; the A and D use classes and use class B1 were revoked, other than for the purposes of relating them to permitted development rights and for the determination of planning applications submitted prior to 1 September.
Uses that would have fallen within classes A2, A3, and B1, and most uses within classes A1 other that certain small shops more than 1km from another shop, now fall within new Class E. Also falling within class E are gymnasiums and other indoor recreation (formerly use class D2) and some former D1 uses - clinics, health centres, creches, nurseries, and day centres.
The amendments also move use classes that the Government wants to protect or control out of any use class; use classes A4, A5, cinemas, concert halls, bingo halls and dance halls are now sui generis. The Government also wants to protect village shops but slotted them into new use class F.2 (local community), which also includes a hotchpotch of ‘nice of have’ uses: hall or meeting place for the principal use of the local community, indoor or outdoor swimming baths, skating rinks and outdoor sports or recreations not involving motorised vehicles or firearms. There is another new use class, F.1 (learning and non-residential institutions), which is a pared down version of Class D1.
Clearly, the deleted use classes are referred to within planning permissions and their planning conditions and approved documents and within development plan policies. Extant planning permissions referring to revoked use classes should be fitted out and occupied on the basis of the use or use classes referred to in that permission. The extent to which planning conditions that seek to control uses and prevent the operation of the Use Classes Order continue to apply will depend on the wording of the condition and its reason.
Article 4 of the Use Classes Town and Country Planning (Use Classes) (Amendment) (England) Regulations 2020 confirms that planning applications submitted prior to 1 September, which refer to use classes that applied when submitted do not need to have their descriptions of development amended.
Some development plan policies may be somewhat toothless following the introduction of Class E, as discussed in our blog Fundamental changes to high street use classes. And local planning authorities currently preparing development plans are having to consider how new Class E in particular means that they will need to redraft town centre policies.
We will review the initial impacts of the amendments in a forthcoming blog.
The Use Classes Town and Country Planning (Use Classes) (Amendment) (England) Regulations 2020 are one of the pieces of legislation subject of the application for judicial review mentioned in the news story above.
The Use Classes Town and Country Planning (Use Classes) (Amendment) (England) Regulations 2020
Tory response to planning reform and the proposed standard method
The White Paper: Responses to questions and the Chief Planner’s caution
A significant number of changes to the planning system were either proposed or came into force over the summer. The changes and proposals have led to much discussion in Parliament via debate and written questions.
New MHCLG Chief Planner, Joanna Averley has issued a Planning Update Newsletter that provides an overview of the changes and proposals Of particular note, the Chief Planner cautions that there is:
“anecdotal feedback that some local authorities may be considering pausing or slowing down the preparation of their local plan, in part due to the uncertainty of when the proposals outlined in “Planning for the Future” come into force”.
The newsletter says that the reforms will take time to be devised and it is therefore important that local and neighbourhood plans continue to come forward under the current Framework. It is confirmed that “As part of the detailed design of the reforms a suitable transition period from approved to new local plans will be implemented”.
Design and ‘building beautiful’ is the second pillar of the proposed planning reforms and following an announcement last month the Communities Secretary said in Parliament:
“I have asked Nicholas Boys Smith, the founder of Create Streets [and the Co-Chair of the Building Better, Building Beautiful Commission], to establish a new body to help every local community to create their own design code and deliver locally popular architecture for everyone”.
Another key area of discussion has been whether or not Green Belt review will be encouraged. During MHCLG Oral Question the Communities Secretary pushed the matter back to local authorities:
“We do need to build more homes, including in places where homes are most expensive. It is, and will continue to be, however, for local councils to decide which sites are available, and which sites are viable and suitable for new homes. That will involve reimagining high streets and it will involve promoting gentle density, but we will do everything we can to protect both the green belt and our beautiful countryside”.
Similarly, an earlier Written Answer by the Housing Minister said “we expect local authorities to categorise Green Belt as an area for Protection” and that the current national policy would remain, but did not directly address local Green Belt review.
Separately, the Housing Minister responded to a question about how the White Paper would address build out rates:
“[…] We are clear that where sites are stalled or experiencing delays to delivery, it is for local authorities and developers to work closely together at a local level to overcome these barriers.
To support build out through planning, we propose to make it clear in the revised National Planning Policy Framework that the masterplans and design codes for sites prepared for substantial development should seek to include a variety of development types by different builders which allow more phases to come forward together.
We will be exploring further options to support faster build out as part of our proposed planning reforms as outlined in the Planning White Paper”.
And responding to Written Question regarding allocating Growth Areas and natural resources constraints, the Housing Minister said:
“Plans should be informed by appropriate infrastructure planning, and sites should not be included in the plan where there is no reasonable prospect of any infrastructure that may be needed coming forward within the plan period”.
Consultation on the Planning White Paper closes soon, on 29 October.
The Housing, Communities and Local Government Select Committee has launched an inquiry into the future of the planning system in England. Alongside this, Committee chair Clive Betts MP wrote to the Communities Secretary advising that the Committee would not formally respond to the consultation, but rather would send written evidence by the end of October and prepare a report to feed into the devising of detailed policies. The Committee is accepting evidence until 30 October.
Responses to proposals for standard methods for calculating housing need
Consultation on ‘Changes to the current planning system’ has now closed and it is anticipated that First Homes (see headline story above), the new Standard Method, and a higher affordable housing threshold will form part of national policy soon, albeit not necessarily in exactly the same form as consulted upon.
Concerns have been raised in Parliament and reported in the national press about the proposed standard method for calculating housing need, often described as a housing algorithm in order to link it - in a political sense - to the unpopular exams algorithm. Lichfields analysis of the proposed formula has also been widely reported.
What is notable is the many Tory MPs raising concerns. Neil O’Brien, Conservative MP for Harborough has been vocal about ‘The next algorithm disaster’. A debate on housing development in West Sussex only had contributions from Tories. Conservative MP Bob Seely asked in a written question if the standard method would be subject to approval by the House – the answer effectively being ‘no’.
Following this, Bob Seely secured a ‘Planning and Housebuilding’ debate on his motion that the House “is supportive of the Government’s aims overall but requests that the new algorithm, process and formula should not be introduced without a meaningful parliamentary vote, I assume in a Bill next year”.
The non-binding motion, which was agreed to at the 8 October debate, referenced both the Standard Method approaches proposed in ‘Changes to the Current Planning System’ and the setting of housing requirements in Proposal 4 of the Planning White Paper.
There was significant interest in the debate: thirty-six Conservative MPs took part, with 8 more stated as supporting the motion. Labour MP Andy Slaughter noted that 55 Conservative backbenchers were hoping to catch the eye of the Deputy Speaker and the Deputy Speaker noted that 28 MPs were unable to get in on the debate.
Conservative MPs spoke a similar vein of ‘we support the objectives but not the proposals, as drafted’ ‘the standard method does not level up and forces more investment into London and the south’ and ‘penalises’ Councils that deliver. The debate also covered proposals in the White Paper, permitted development rights introduced over the summer, build out rates, manifesto promises (including re the Green Belt and ‘infrastructure first’) and the proposed increase to the affordable housing threshold.
As reported in the national press, during the debate the former Prime Minister Theresa May was highly critical of the proposals and said that the new standard method “does not guarantee a single extra home being built”.
The Housing Minister responded at length, distinguishing between the near and long term proposed standard methods:
Our changes to the standard method in the short term will be just a starting point. We know that the housing numbers generated by the standard method will not necessarily be the numbers that areas plan for, because of the physical and geographic constraints placed on them… We look forward to giving our detailed response to the consultation following a careful analysis of all responses. Until such time, all the figures that are bandied about in the media, some of which were quoted in the House today, are entirely speculative.
In a September debate, Theresa Villiers MP had asked:
“In March, the Secretary of State wrote a strongly worded letter to the Mayor of London to express concern that his London plan tilts away from family homes towards one-bedroom flats. How does the Secretary of State reconcile the inconsistency between that letter and his new housing algorithm, which will generate such high targets that they are unachievable without tower blocks full of predominantly one-bedroom flats?”
The Housing Minister responded neutrally by saying the Government would:
“reflect carefully on the feedback that we receive from the consultation on calculating local housing need.”.
After the Planning and Housebuilding debate, an MHCLG in the Media blog was published which said media coverage has suggested that the proposed formula creates a new target for housebuilding, whereas as in fact a formula is already used to guide councils on housing need and these were revisions to make it fit for purpose.
It concludes:
“As these plans are still part of a consultation, the figures reported are speculative. We are listening to the feedback we have received to ensure we deliver the homes we need, where we need them”.
This blog and the Housing Minister’s response at the Planning and Housebuilding debate suggest that the proposed standard method formula for calculating housing need could well be adjusted prior to becoming policy.
MHLCG Planning Newsletter and message from the Chief PlannerUK Parliament, Planning and HousebuildingUK Parliament, Written Answers, Planning: Natural ResourcesUK Parliament, Written Answers, Build out ratesUK Parliament, House of Commons debate regarding Housing Developments in West SussexUK Parliament, House of Commons debate MHCLG Oral questionsUK Parliament, Written Answers, Standard method of establishing housing requirement, Bob Seely MPMHCLG in the Media blog, Local Housing NeedHousing, Communities and Local Government Select Committee, Inquiry into the Future of the Planning System
The Devolution White Paper, which last month was still anticipated “in the Autumn” is now simply coming “in due course”. This could have an impact on proposals for planning reform, which were published prior to this delay and when local government reorganisation was expected to form part of that White Paper. On 6 October, Lord Greenhalgh said:
“The Government wants to decentralise giving more power to local communities, providing opportunities for them to enjoy devolution. The Devolution and Local Recovery White Paper, which will be published in due course, will set out our detailed plans and we continue to work closely with local areas to establish solutions to local government reform. There will be no blanket abolition of district councils or cancellation of the [May 2021] county council elections, and no top-down restructuring of local government”.
He had previously said “we will not see the wholesale abolition of districts”.
On 9 October, the Communities Secretary wrote to principal councils in the counties of North Yorkshire, Cumbria and Somerset and in the areas of Bath and North East Somerset and of North Somerset, inviting them to develop and submit proposals establish unitary local government in their areas.
An MHCLG press release says that these areas are “advanced in their discussions about local government restructuring and councils in these areas have asked for an invitation to be issued”.
UK Parliament, Written Answer by Lord Greenhalgh, 6 October 2020MHCLG, Invitations to submit proposals for unitary local government in Cumbria, North Yorkshire and SomersetUK Parliament, Devolution in England
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The Lichfields perspective |
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The summer of planning-related announcements was a mixture of immediate and far reaching changes, such as the new Class E, and changes that are to be expected in the medium to long term. While much of the focus has been on ‘planning reform’ and the need to understand and submit representations on these proposals, the impact of changes to the Use Classes Order and new permitted development rights have been felt immediately. The impact of First Homes, the standard method and the raising of the affordable housing threshold will probably start to be felt by the end of 2020. |
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Disclaimer: This publication has been written in general terms and cannot be relied on to cover specific situations. We recommend that you obtain professional advice before acting or refraining from acting on any of the contents of this publication. Lichfields accepts no duty of care or liability for any loss occasioned to any person acting or refraining from acting as a result of any material in this publication. Lichfields is the trading name of Nathaniel Lichfield & Partners Limited. Registered in England, no.2778116