England planning news, November 2021

The first report from the Building Back Britain Commission was published this month.

‘Levelling up and the housing challenge’, which was authored by former Treasury economist Chris Walker, calls for a rebalancing of new housing development, arguing ‘hundreds of thousands’ of new homes will be needed across the North and the Midlands to reflect the aspirations of the Government’s levelling-up agenda. Its central thesis is that more housing than is currently planned for will be needed to sustain the new employment opportunities in levelled up areas.

The Commission is chaired by Terrie Alafat (former Chief Executive of the Chartered Institute of Housing) alongside five other commissioners who are industry leaders representing the housing and construction sectors; the commission also has an advisory group.

Arguing that employment growth is a key driver of housing demand, current assessments for housing need fail to account for the increased employment opportunities associated with future economic growth and in levelled up areas, the report says:

To address this, the Commission has called for a review of the Government’s standard method for assessing housing need. This it argues should shift away from focusing on the historical growth, focusing instead on a ‘levelling up’ model of future need which would account for future demand for housing in these areas. Additionally, it argues the Government’s housing strategy should place less focus on building new homes in some of the more overheated parts of the South East of England.

A new method for assessing housing need is put forward within the Commission’s report. This uses a ratio of 0.75 homes for each additional job created. It assumes that to be ‘levelled up’, each local authority would require jobs growth that brings unemployment figures up to the national average, summing to 1.8million jobs.

Writing on politics.co.uk, Terrie Alafat said:

In addition to this, the report also calls for greater investment in the refurbishment of existing homes, alongside the replacement of those no longer deemed suitable. This, it argues, should consider the embodied as well as operational carbons, covering the CO2 generated during the construction phase of a development.

Lichfields analysis of the first round of levelling up funding suggests that so far, Levelling Up Fund investment appears to be weighted towards northern parts of the country and the Midlands, but with some notable exceptions in the form of the North East (which has been awarded a much smaller share than its neighbouring regions) and the South East (which secured almost as many successful first round projects as the North West).  This is explained further in Levelling Up Fund first round: reaching left behind places? by Lucie Bailey and Selina Pazos.

Evidence given by the Secretary of State for the Department for Levelling Up, Housing and Communities (DLUHC), Michael Gove, his apparent support for the findings of the Building Back Commission’s first paper “Levelling up and the housing challenge”, and other announcements indicate that the Secretary of State continues to diverge from his predecessor’s vision for planning reform.

Three days after the publication of ‘Levelling up and the housing challenge’, Michael Gove appeared in front of the soon-to-be-renamed House of Commons Housing, Communities and Local Government Select Committee (HCLG Select Committee), to give evidence on the work of the Department for Levelling Up, Housing and Communities (DLUHC).

Mr Gove answered wide-ranging questions including those on local plan-making and associated matters, decision making, permitted development, affordable housing, the direction of planning reform generally and, of course, levelling up. 

Mr Gove said of his “immediate and pressing” departmental priorities, that the first is giving coherence to the operation of a set of levelling-up missions across Government and the second is improving housing supply and quality and addressing the barriers to buying a home. He said that the third priority is related: making sure local government is seen to effect a beneficial, transformation in people’s lives, economically and in the quality of where they live.

Having defined levelling up, he said he understood past criticism of a lack of clarity about what it is, but that a pre-Christmas White Paper would include clear metrics by which the success of levelling up can be measured.

No reference was made to the “Levelling up and the housing challenge” report, but how to determine the most appropriate locations to build homes was discussed, in the context of the target of 300,000 homes per year by the mid 2020s.

The Secretary of State said that he was not retreating from the “challenging” 300,000 per annum target; he considers the key issue to be where and of what tenure new homes would be.

When questioned about affordability and supply keeping pace with demand, Mr Gove said that key is having more homes overall, albeit he said later:

Ben Everitt MP observed “The problem here is that housing is the biggest, the most expensive and the longest part of the levelling-up puzzle, but it has to be central to the whole thing”. Mr Gove replied “Yes, that is absolutely spot on”.

He said that he would be working on a brownfield first policy with Homes England and local government, to unlock land and would look at mortgage finance. The continued tilt towards brownfield first and its echoes of the brownfield-first policy of the Labour Government in the late 1990s are explored in Matthew Spry’s blog A brownfield-based planning policy? The lessons of PPG3. Lichfields has also produced analysis which shows that brownfield land is an important source of much needed land for housing, but it is not enough by itself.

The Secretary of State had been discussing planning reform with stakeholders who could help to ensure that the quality and quantity of houses improves and identified aesthetics, perceived impact on infrastructure and the environment and a top down approach as the background to resistance to development. The top down approach included decisions by the Planning Inspectorate combined with “a certain degree of “Computer says no” operation from the Department. But planning reform, in whatever form it emerges, is acknowledged as only one element of providing more people with “decent homes, in the areas that they want to live in, with communities welcoming regeneration”.

The 2023 deadline for having a plan in place was confirmed, as it had been by the Housing Minister and was later confirm by the Chief Planner in her Planning Update Newsletter.

Mr Gove reiterated that housing need calculations are a first step in plan-making before constraints into account, but added that he wanted to review how housing need is calculated. This is because he considered that the assumptions may be out of date and that local plan inspectors could “deploy” need in a more sophisticated way, notwithstanding that housing need and policy constraints have a complex inter-relationship. It this context he agreed to assess the impact of the uplift to the standard methodology for calculating the housing need for cities, which was introduced at the end of 2020 in response to the backlash to the revisions to the standard methodology published for consultation in summer 2020.

Mr Gove agreed to look at planning contributions made by permitted development schemes, and the impact of Class E, which he said he was not aware of.

Mr Gove also said he “loved” street votes. Related to this, as reported last month, at that time there were four private members bills sponsored by Conservative MPs and related to planning, due reach second reading stage in the next three months. In addition, there is a Planning (Street Plans) Bill “to make provision about the creation and operation of street-level plans for local development; and for connected purposes”, which is linked to the February 2021 Policy Exchange report Strong Suburbs. It is this policy paper that proposes ‘street votes’, a street level equivalent of a neighbourhood development order, with a view to the collaborative, beautiful, gentle densification of the suburbs proposed by the Building Better, Building Beautiful Commission.

The Planning (Enforcement) Bill was withdrawn at its Second Reading, with a view to its measures being included in a forthcoming Planning Bill, having drawn support on both sides of the House of Commons.

And with regard to arguably the most popular area of planning reform, digital transformation, over £1 million has been allocated to 13 planning authorities to test new digital initiatives to make the planning process more open and accessible and boost public engagement. MPs continue to lobby for legislation that will permit remote committee meetings, as evidenced by written questions to DLUHC.

The Environment Act 2021 was granted Royal Assent on 9 November 2021 and some of its provisions are now in force. These do not include the provisions relating to biodiversity net gain.

The in-force provisions relate to the establishment of an Office for Environmental Protection. The Act stipulates:

“The principal objective of the OEP in exercising its functions is to contribute to—

(a) environmental protection, and

(b) the improvement of the natural environment”.

Related this, the sections that define natural environment, environmental protection and environmental law and other Part 1 definitions in section 47 have also been brought into force. Albeit provisions that require the OEP to monitor the implementation of environmental law and respond to requests to advice from ministers on this, are not yet in force. And furthermore, in terms of the remit of the OEP and planning, Lord Goldsmith explained to the Lords during the Lords consideration of Commons amendments to the then Bill:

“[…] the majority of individual planning and environmental permitting decisions—are unlikely to have sufficiently broad or widespread impact to be prioritised. The OEP could pursue such cases if it considers them indicative of a broader or more systemic issue or failure, or if especially serious harm has resulted, or may result, from the potential failure”.

This Lichfields Planning Matters blog by Jennie Baker provides an overview of the planning related requirements and notes some of these, such as biodiversity net gain, will continue to emerge in policy before there is a statutory requirement for them, where there is local political will that this is the case.

Environment Act 2021The Environment Act 2021 (Commencement No. 1) Regulations 2021

The High Court has held that where a s106 agreement may be interpreted as limiting the number of affordable dwellings within a scheme to the precise number referred to in the s106 agreement, then social housing relief may be refused on the affordable housing that is over and above the s106 commitment.

Stonewater, a registered provider that has partnered with Wealden Council since 2001, acquired a site with outline planning permission and reserved matters approval for 169 homes, of which 35 per cent were to be affordable. Stonewater submitted a Community Infrastructure Levy (CIL) social housing relief claim for all the permitted housing, because it intended to deliver a scheme where all dwellings would be affordable.

The first claim was refused, as was a second claim.

There was a political will for the scheme to include not more than 35% affordable housing. The Sussex Express reported on the July 2019 Committee meeting where an amendment to the scheme was considered, quoting a Councillor and outlining an officer’s response:

 “What I am really concerned about is that the CIL (Community Infrastructure Levy) money will come in too late to pay for the roundabout [at Ersham Road]. “How are we going to make sure that roundabout gets built before traffic starts pouring up Ersham Road and tries to get out under the already crowded South Road and Diplocks?

“In response, planning officers said the money for the work is to be delivered as work begins, but warned that there may be a ‘time lag’ between the first homes being occupied and the road works beginning”.

The judgement includes an excerpt from an email from the Chief Executive of Wealden Council which says, “You appreciate that 100% CIL relief at this scale will have a major impact on our evolving infrastructure pot”.

However, this political backstory and the Council’s request that a s106 agreement be entered into for all housing was not the basis for the judicial review claim failing, rather it relates to the evidence required to be submitted with a claim for social housing relief and the Council’s assessment of that evidence.

The judgement includes the reasons that Wealden gave for refusing the second application for relief, which the judgment says are the same as for the first:

"[…]  The Permission and S106 provides for the provision of affordable housing at a level of 35%. In determining any submissions pursuant to the S106 in relation to the provision of affordable housing which exceeds the proportion considered at the time of the grant of the Permission (being 35%), the Council can properly have regard to the extent to which the submitted level of "qualifying dwellings" would affect the provision of infrastructure. In view of the above, the Council hereby refuse the claim for relief as it has not been established that any dwellings coming forward would be "qualifying dwellings" for the purposes of the CIL Regulations."

Stonewater judicially reviewed this decision (there is no appeal process for social housing relief claims), arguing (among other things) that all the housing to be built will meet at least one of the conditions for granting mandatory CIL relief as set out in the CIL Regulations, therefore the Council should have granted it.

The Hon Mrs Justice Thornton rejected the claim for judicial review.

The judge agreed with Wealden’s decision that the s106 agreement required precisely 35% of homes to be affordable, not at least 35%.

Notwithstanding the political background, Wealden had offered to consider a request for the s106 to be amended to include 100% affordable housing, but the developer rejected this suggestion.

The judge noted “The Claimant did not take up the Council's offer. It simply repeated its position that a section 106 agreement is not a legal pre-requisite for dwellings to qualify under condition 2 or 3. This is correct. However, the evidential value of any section 106 agreement is a different and relevant consideration”.

The evidential value of the s106 relates to Regulation 51 Social housing relief: procedure and specifically Regulation 51 (3)(d)(ii). As the judgement outlines:

“Pursuant to Regulation 51(3)(d)(ii), an applicant for social housing relief must submit evidence that the development qualifies for social housing relief. In the case of dwellings which have yet to be constructed this will amount to evidence to demonstrate that the applicant will in fact bring forward a development which will qualify for the relief sought. The logical corollary of the requirement for an applicant to submit evidence is that the relevant decision-making authority must consider the adequacy of that evidence and may reject the application if not satisfied by it. […] 

The judge acknowledged that there is no requirement for affordable housing to be secured by a s106 agreement in order to demonstrate that it meets one or more conditions of relief. But Mrs Justice Thornton also found that a s106 agreement may be a material factor in determining a relief claim and whether the presence of a section 106 agreement, or its absence, justifies the grant or refusal of a claim for relief will depend on the facts and circumstances of a particular case.

It was also acknowledged that social housing relief is mandatory if the conditions in Regulation 49 are met (these conditions describe different types of affordable housing) and if the requirements of Regulation 51 are met. The reduction in CIL receipts that would arise if the claim is granted are not relevant to the decision.

 “[Stonewater’s] evidence that the dwellings qualified for relief consisted, in effect, of an assertion that 169 units of affordable housing would be provided, in apparent non-compliance with the existing section 106 agreement. […] In these circumstances, it was entirely rational and unsurprising that the Council was not satisfied that sufficient "evidence" had been provided for the purposes of Regulation 51(3)(d)(ii) CIL Regulations”.

And with regard to the political back story, the judge concluded:

“In my judgment, the email from the Head of Planning […] makes clear that the Council's decision was focused on the evidential implications of its (correct) understanding that the section 106 agreement in existence imposed a specific affordable housing requirement of 59 units or 35%”.

Stonewater (2) Ltd v Wealden District Council (2021)

 

Tewkesbury Borough Council has been unsuccessful in its challenge to an Inspector’s decision not to take in account “oversupply” of housing during earlier years in the plan period, when considering five year housing supply.

The Honourable Mr Justice Dove found:

“The question of whether or not to take into account past oversupply in the circumstances of the present case is, like the question of how it is to be taken into account, a question of planning judgment which is not addressed by the Framework or the PPG and for which therefore there is no policy. No doubt in at least most cases the question of oversupply will need to be considered in assessing housing needs and requirements”.

This Lichfields Planning Matters blog by Harry Bennett ’Oversupply: it’s all in the judgement', gives an overview of the judgment, explains that the outcome means this is still a grey area and consider factors might be relevant when considering whether or not to account for oversupply and the potential weight to attach to it.

Tewkesbury Borough Council v Secretary of State for Housing Communities And Local Government (2021) 

The Government published ‘Net Zero Strategy: Build Back Greener’ on 19 October 2021.

According to the Government, the Strategy, which will be submitted to the United Nations Framework Convention on Climate Change (UNFCCC) as the UK’s second Long-Term Low Greenhouse Gas Emission Development Strategy under the Paris Agreement, “builds on that approach to keep the us on track for UK carbon budgets, our 2030 Nationally Determined Contribution, and net zero by 2050”.

It was published on the same day as the Heat and Buildings Strategy, which sets out the Government’s plans for decarbonising buildings, as part of setting a path to net zero by 2050. The Government response to the Committee on Climate Change’s 2021 progress report was published on 19 October, too.

The Net Zero Strategy refers to the UK, but the national planning documents and framework referred to are English.

According to the Strategy, the Government recognises “the importance of the planning system to common challenges like combating climate change and supporting sustainable growth”.

However, there are no new announcements related to planning within the Strategy, which reflects the position on planning reform and its interface with Net Zero, as stated in evidence given by the Net Zero Minister Eddie Hughes to two different Select Committees' inquiries into Net Zero, a month ago.

The role of the planning system in delivering low carbon infrastructure was noted and energy National Policy Statements are to be updated to provide greater clarity on the need and urgency for low carbon infrastructure. The Nationally Significant Infrastructure Projects (NSIP) reform programme and strategic decision making are also considered important in supporting the capacity of the planning system.

The Strategy notes current national policy on sustainable development and reducing carbon emissions and the ‘tools and guidance’ provided by the National Model Design Code.

The Strategy also says the Government will embed transport decarbonisation principles in spatial planning and across transport policy making.  And the need to ensure that climate change and net zero policy interventions are in synergy and do not contradict each other is recognised.

Eddie Hughes had noted to the HCLG Select Committee the "state of flux" of planning reform, said the NPPF review would happen alongside a Bill, which would come after the consultation outcome.

When Mr Hughes was giving evidence to the Environmental Audit Select Committee, Helen Hayes MP noted that "What we have not heard is how the planning system as a whole will be brought up to scratch to deliver for the Government’s net zero strategy". The Net Zero Minister told the Committee that it would not be appropriate to discuss a Bill that hasn't been laid.

Helen Hayes also said that some LPAs are concerned about the risk of JR if they go beyond national policy on carbon reduction and said that clarity was required from the Government on that.

When the Environmental Audit Committee raised the need to look to more sustainable materials, the Net Zero Minister said that the public are hesitant about buying homes not made from brick and slate and need to be taken on a journey.

The following week, on 29 October, the HCLG Select Committee published “Local government and the path to net zero”.

We welcome the Government’s commitment to reviewing the National Planning Policy Framework to ensure it contributes to climate action, but the Net Zero and Heating and Buildings strategies could have said more about the ability of local authorities to use the planning system to shape their communities in ways that reduce carbon emissions.

It recommended, among other things:

In November, Lichfields published an Insight into the current position of planning policies relating to net zero and other climate change objectives, Time to panic? Planning and the climate emergency.

The research includes analysis of net zero carbon (NZC) targets by local authority. Of those authorities which have made a climate change emergency declaration, “94% have also set out an explicit target year to achieve NZC. 14 Local Authorities have not formally declared a Climate Emergency[3] but have set a NZC target of between 2030 and 2050. Of those setting a target year, 57.5% have declared an intent to target NZC by at least 2030; considerably more ambitious than the 2050 target year set by the UK Government. Six authorities (which all declared a climate emergency in the summer of 2019) have gone further with an aim to achieve NZC by 2025”.

The research goes on to explain the extent to which local authorities that have reflected these ambitions in existing or emerging local plans. This includes analysis of the types of named ‘standards’ that some draft local plans are requiring be met in order to reach Climate Change goals.

One of the Insight’s conclusions is:

The Autumn Budget took place on 27 October 2021. In his Autumn Budget and Spending Review blog, Ciaran Gunne-Jones provides an overview of the Budget and Spending Review and sets out the key announcements of relevance to planning.