Planning Law Speed Read – July 2017
31st July, 2017
Our planning experts are on hand to discuss in further detail what effects they could have for you and your organisation.
Alok Sharma – the new housing and planning minister
Following Gavin Barwell losing his Croydon Central constituency seat in June’s General Election, a new Planning Minister has been appointed. Alok Sharma, Conservative MP for Reading West, was appointed to replace Mr Barwell following a brief stint as the Parliamentary Under-Secretary of State at the Foreign and Commonwealth Office.
A charted accountant by profession who has also worked in the banking sector, Mr Sharma was elected in the 2010 election, being subsequently re-elected in 2015 and again last month. Along with his post at the FCO, Mr Sharma has sat on the Treasury Select Committee and the Science and Technology Committee as well as being Parliamentary Private Secretary at the Treasury and Infrastructure Envoy to India.
Mr Sharma has previously campaigned against “unsustainable development on green spaces” and claimed in an October 2011 debate that reducing the National Planning Policy Framework to fewer than 100 pages would lead to more sustainable development. In a January 2011 debate on the then Localism Bill, Mr Sharma welcomed a return to localism, stating that it would lead to more communication between developers, councils and local residents, leading to more homes being built on appropriate sites.
Mr Sharma has had no previous experience in this sector and is a relatively unknown commodity in Government. This could prove an issue in a department that is notorious for ministerial changes, with six ministers holding the position in the last 10 years. This, coupled with the Conservative pledge to build 1 million homes by 2020 could suggest Mr Sharma will have an uphill struggle as he settles in to his new post.
Court of Appeal state that the presumption in favour of sustainable development should be applied narrowly
Paragraph 14 of the National Planning Policy Framework (NPPF) states that “at the heart of the National Planning Policy Framework is a presumption in favour of sustainable development, which should be seen as a golden thread running through both plan-making and decision-taking.”
There has however been much argument and confusion in relation to the scope of the presumption and whether this is confined solely to paragraph 14 or if it is of general application throughout the NPPF.
This was the talking point in Barwood Strategic Land II LLP v East Staffordshire Borough Council and SSCLG  EWCA Civ 893, a decision which sought to clarify the position following recent conflicting decisions. On 16 March 2016, two judgments in the Planning Court focused on paragraph 14, both interpreting the presumption differently. These cases were Wychavon District Council v SSCLG  EWHC 592 (Admin) and Cheshire East Borough Council v SSCLG  EWHC 571 (Admin).
In Wychavon a broad application was favoured and Mr Justice Coulson considered that it was wrong to argue that the presumption is confined to paragraph 14.
In Cheshire East, Mr Justice Jay favoured a much narrower application of the presumption, stating that “paragraph 14 teaches decision makers how to decide whether the proposal, if approved, would constitute sustainable development”. The sustainability of a development could not, according to Mr Justice Jay, be decided prior to the application of paragraph 14, suggesting that the presumption stands alone and does not run throughout the framework.
The Court of Appeal in Barwood was invited to conclude that paragraph 14 is a standalone provision (as determined by Mr Justice Jay and followed in the case of Barker Mill Estates v Test Valley Borough Council and SSCLG  EWHC 3028 (Admin)). The Court of Appeal decided that paragraph 14 is, in fact, a stand alone presumption and does not operate outside the circumstances set out in paragraph 14. The Court of Appeal cautioned against attempts to over-complicate planning matters and concepts that are designed to be simple. Decision making, according to Lord Justice Lindblom (giving the lead judgment in the Court of Appeal), is essentially a flexible process, involving an exercise of planning judgment. The decision maker is therefore left with a wide discretion, making a planning decision quite different from the adjudication by a court on an issue of law.
This decision therefore appears to end the dispute surrounding the scope of paragraph 14, leading to more clarity in this area.
Uncertainty over the future of high-rise buildings
In April this year Newcastle City Council released a consultation paper (“Tall Buildings Scoping Report”) on the introduction of a new high-rise buildings supplementary planning document (SPD) that was intended to be implemented by the end of this year. The consultation advanced the view that tall buildings are changing the skylines of cities, maximising the use and value of a site and acting as signposts of regeneration. The Council acknowledged however that a clear policy was needed to determine when tall buildings may be appropriate. The consultation sought views to build on the Tall Building Guidance SPD adopted by the Council in 2006. However, given the recent tragedy of Grenfell Tower, it is likely that the Council will carefully consider any new proposals.
In a report from June 2017, the Housing Finance Institute introduced a number of recommendations including an immediate moratorium on any new high-rise blocks, a review into the safety of existing high-rise blocks and an accelerated house building programme throughout the country to re-house those in unsafe high-rise accommodation.
The idea of moving away from building high rise blocks is not a new one. In the Conservative’s election manifesto from last month, there were several references to so-called “mid-rise” housing such as mansion blocks, mews houses and terraced streets. There has also been a steady reduction in the levels of investment in high-rise developments, suggesting that the risks of high-rise development are starting to outweigh the potential benefits.
The reduction in the construction of high-rise blocks will lead to difficulties for some authorities. It is likely that any Councils that prepare policies limiting high-rise development purely based on the effects of the Grenfell disaster, or any decision of a planning committee to refuse high-rise development based solely on Grenfell, may be overturned or reviewed if they do not cite planning considerations such as character or conservation. Therefore any decision of a Council to restrict high-rise development will need to be supported by a valid planning reason or it will be open to judicial challenge. There are also issues surrounding the need for development and the limited land available (particularly in the city centres) and therefore to refuse permission for high-rise developments may put pressure on other areas such as the Green Belt.
The future of high-rise development is therefore uncertain and there have been too few decisions at appeal or at committee which would suggest whether since the Grenfell Tower disaster a particular pattern is emerging. It is therefore likely that many Council’s may find themselves, for the time being, between a rock and a hard place as they attempt to ensure development continues in order that they build much needed housing whilst placating residents and committee members, who are worried and perhaps angry in the wake of the Grenfell disaster, about the safety of high-rise developments.
Viability assessments – paying too much for a site can no longer be subsidised by a reduction of affordable housing
Last month, Islington Council’s decision to refuse permission for 96 homes at a disused Territorial Army Centre was the subject of an appeal inquiry. The Council refused planning permission due to the scheme not providing the “maximum reasonable level” of affordable housing, as specified in the Council’s Core Strategy. The Core Strategy requires 50% of homes on a development to be affordable and states that developers should not use excessive site values to justify providing fewer affordable homes.
The appeal centred on the developer’s viability assessment. The developer argued that to offer more than 10% affordable housing on site would make the scheme unviable due to the £13.25m purchase price and associated build costs. The Council argued that, using the site’s established use value (EUV) plus a profit percentage, the land value was £6.75m, allowing for 34% affordable housing.
The inspector was keen to stress the importance of balancing the need for development with the adequate provision of affordable housing. He stated that an “inflated land value should not be subsidised by a reduction in affordable housing”. This led the Inspector to find that the Council’s valuation of the land was reasonable and that the developer had failed to demonstrate that the affordable housing requirements contained in the Core Strategy had been taken into account when purchasing the site. This suggests that developers must have affordable housing and viability in mind from day one rather than seeing it as an ancillary point to be assessed at a later date.
This decision contradicts the approach contained in the RICS guidance from 2012 which set land value as the correct benchmark for viability assessments to be made against, and, in turn, affordable housing contributions to be determined. The decision to allow this method of calculation has been criticised as leading to confusion. It is claimed that, as there is no guidance around the level of the profit percentage premium to be used in the viability calculations, it is difficult for developers to know what level they should include in their viability assessments.
This appeal decision could therefore mean that developers are more likely to face scrutiny from local authorities and inspectors in the future regarding potentially insufficient affordable housing provisions in developments. They may require more robust evidence in developer’s viability assessments which specifically demonstrate why a site cannot deliver a policy compliant provision of affordable housing.
White Paper – Supporting developers to build out quicker
Continuing our focus on different aspects of the White Paper, this month we examine what the suggested reform has to say about the speed of development in this country. As of July 2016 there were 684,000 homes in England with full planning permission granted that were not completed. Of these, only 349,000 were actually being built, whilst the remaining 335,000 were in the pre-commencement stage. There are a range of reasons set out in the White Paper as to why there are such major delays such as a lack of innovation and a skills shortage.
The Government set out a number of proposals aimed at increasing the speed at which developers can build out developments. The main proposals include:
- The restriction of pre-commencement conditions. The Neighbourhood Planning Act 2017 saw this proposal passed into law and it will come fully into force when the Secretary of State publishes new regulations. These will set out what pre-commencement conditions a local planning authority can impose unilaterally and which conditions can only be introduced with the agreement of the Applicant. This will help to reduce the delays currently faced by developers by ensuring that there are fewer obstacles to the commencement of development.
- The simplification of developer contributions. This includes examining options for reform that stem from the independent review into the Community Infrastructure Levy (CIL) that was commissioned by the Government in November 2015 (with the consultation period ending in October 2016). The Government pledge in the White Paper to examine the options for reform stemming from the consultation with a view to setting these out in the 2017 Autumn Budget. However, it is unknown what effect the General Election may have on this timescale.
- Reducing the skills shortage. The White Paper states that the low level of investment in skills and technology has caused a skills shortage in the housebuilding industry which is only due to get worse. In order to do this the Government have committed to:
- alter its support for training in the construction industry by conducting a review into the purpose and function of the Construction Industry Training Board which will publish its report in Spring 2018.
- introduce a new route into the industry by streamlining the number of courses and improve the quality of the remainder. They intend to have this available by September 2019.
- ensure that pressure is maintained on developers and construction companies to keep to their part of the bargain with regards to training.
These proposals present an ambitious leap by the Government to modernise and streamline the housebuilding sector and ensure that there are sufficient skills, infrastructure and innovation to allow developers to build out developments quickly and efficiently.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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