Skip to content

Planning law update – September 2020

Welcome to Ward Hadaway's planning law update. The aim of our bite-sized bulletins is to keep you abreast of the 'hot' topics and key legal issues relevant to you.

Our planning experts are on hand to discuss in further detail what effects they could have for you and your organisation.

Does the Planning White Paper really spell the end to Section 106 Agreements?

The Government’s recently released White Paper (“Planning for the Future” ) arguably raises more questions than answers. In particular, the proposed “Infrastructure Levy” has been subject to a great deal of scrutiny. The proposed levy will consolidate the current Section 106 planning obligation and CIL regime into one tax payable on first occupation of a development. This has led to much commentary suggesting an end to Section 106 Agreements.

However, the White Paper is not so clear as to the future of such agreements. This is plainly evidenced in the proposals for affordable housing to act as an in-kind delivery of the levy. Footnote 18 envisages that a Section 106 planning obligation could still be used to secure a covenant on the land, but that the value would be captured through the levy. Presumably this would still require an agreement, as would codifying the value of the development and any amount of in-kind delivery under the proposals. It is however currently unclear the extent to which developers will be able to elect to deliver on-site affordable housing as a mechanism for offsetting their levy liability although the White Paper floats the idea of making on-site delivery mandatory should a Council require it.

It is when focusing on capturing land value that the White Paper fails to properly assess the importance of planning obligations in the current regime. Section 106 Agreements secure a wide range of planning obligations beyond those that can be captured through financial contributions, such as open space management, land restoration, employment and skills opportunities, the reservation of land for schools or community buildings.  Many examples of current planning obligations will not be deliverable as planning conditions and in its current form, the White Paper does not offer an alternative means of securing these on site benefits.

Unlike the current system, under the proposals in the White Paper, Councils will have flexibility in how they spend the levy once they have met their infrastructure need, including using the levy to reduce Council Tax. However, it is not clear how the correct balance is to be achieved and it is proposed that a certain amount of the levy be ring-fenced for affordable housing to keep delivery at current levels.

The proposal in the White Paper for a new levy raises many questions as did the proposals for the Community Infrastructure Levy and the half-baked reform to introduce a Planning Gain Supplement before it, and many planning professionals have highlighted the gaps in the details and the potential issues that will arise. One thing that is for certain is that despite some of the publicity, it is extremely unlikely in its present form that the proposals present a wholesale alternative to the proliferation and use of planning obligations as part of the development management process in England and Wales.  A more comprehensive and robust root and branch reform of the Community Infrastructure Levy, Section 106 and the drafting and use of planning conditions will be required before a tenable alternative to the use of section 106 agreements will present itself. The deadline for consultation responses is 29 October 2020.

Changes to the Use Class System

The new Use Classes Order came into force on 1 September 2020 as part of the wider plans to “radically reform the planning system” which last month saw the coming into force of the amendments to Permitted Development Rights (PDR), including the new demolition rights for changes of use from business to residential (Class ZA).

The Regulations introduce a new Class E and Class F. Class E amalgamates various previous classes including shops, professional services and restaurants (formerly in Class A), offices and industrial processes (formerly in Class B), clinics, health centres, day nurseries and day centres (formerly in Class D1), and gyms, indoor sport, recreation or fitness not involving motorised vehicles or firearms principally to visiting members of the public (formerly in D2).

Non-residential institutions, for example, schools and museums, will be contained in the new Class F.1 as learning and non-residential use. Class F.2 is classified as local community and includes halls and recreation grounds, but also small retail shops selling essential goods (formerly in Class A).

While these changes have come into force, there is a transitional period until 31 July 2021 during which time it is anticipated that the Permitted Development Order will be amended to reflect the new classes.

The new system is designed to provide greater flexibility as to how buildings can be used and to encourage growth accordingly. A change to use within a use class is not development, and therefore the new system will mean that planning permission will not necessarily be required for any changes of use within that use class. However planning permission may still be necessary for the operational works resulting from any change in use and other restrictions may exist preventing the change in use, for example existing Article 4 (1) Directions, any lease or other legal agreements identifying the use of the land, or planning conditions.

Some caution is however required as the new measures are subject to judicial review following a claim by the environmental group Rights: Community: Action. A rolled up hearing is due to be heard in early October where the  claimant is seeking to quash the statutory instruments. If successful, any changes of use that have been made reliant on the new Use Classes Order will potentially be unlawful.

Section 73 Applications will not be bound by Section 106 Agreements unless expressly drafted

Norfolk Homes Ltd v North Norfolk DC [2020] EWHC 2265 (QB)

A recent court judgement has confirmed the position that a s106 agreement will only bind development undertaken pursuant to a s73 permission if the original s106 agreement expressly includes drafting to state that a s73 permission will also be bound by its terms. In the instant case there was no such provision and the Council tried to rely on an implied term. The Court rejected this approach concluding that the impact of such an implication would be extensive, capturing any variation to the development, requiring parties to expressly exclude Section 73 to avoid such an implication. The case provides a helpful confirmation of the position and serves as a reminder to Councils that development undertaken pursuant to a s73 permission needs to be explicitly bound either by the original s106 agreement or by a new s106 agreement.

New appeal guidance on extensions to construction hours

New guidance has now been issued in respect of how to appeal a refusal by the Council to extend permitted construction hours on site following the introduction of the fast track application process earlier this summer.

Appellants can use the Section 78 appeal form on the Planning Inspectorate online service quoting that it is an appeal under Section 74B and must provide supporting information, which can include photographs, and a supporting statement limited to 1,000 words. Appeals should be validated in 7 days and a minimum of 7 weeks is prescribed for comments and statements from interested parties. An Inspector will be appointed as soon as possible and no site visits are expected. If the appeal is allowed, the conditions will be temporarily amended.

Please click here for further information.

If you have any questions on the issues covered in this update and how they will affect you, please do not hesitate get in touch.

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.

This page may contain links that direct you to third party websites. We have no control over and are not responsible for the content, use by you or availability of those third party websites, for any products or services you buy through those sites or for the treatment of any personal information you provide to the third party.

Follow us on LinkedIn

Keep up to date with all the latest updates and insights from our expert team

Take me there

What we're thinking