by Martin Edwards and John Martin
This year marks the watershed of the planning system. The Planning and Compensation Act 1991 (“the new Act”) is now upon us, having received the Royal Assent on July 25. Earlier this year we examined the more important changes to the planning system which were heralded by the Planning and Compensation Bill (see Estates Gazette, April 6 1991, p 84). In our article we made a number of predictions; it did not require great powers of clairvoyance to foresee that most would come to pass. However, there are some changes made to the Bill in the House of Commons which even its opponents could not have anticipated, let alone hoped for.
In short, the new Act represents the most significant reform of the present planning system since its inception in 1948. It introduces a number of radical changes and, in many instances, effectively reverses the presumption in favour of development which has long underpinned the system. Along with greatly increased powers given to local planning authorities to enforce against breaches of planning control are harsher penalties that miscreants will no longer be able to ignore.
The purpose of this article is to examine the changes brought about by the new Act in so far as they relate to England and Wales and to consider the likely effects upon owners and occupiers of land and, in particular, the hard-hit development industry. Emphasis has been placed on the more important changes and, where necessary, reference has been made to background information and parliamentary debate to illustrate the degree and significance of the changes involved. (This is particularly so in the case of those relating to development plans.) We make no apologies for the alarmist tone of this article, for the new Act will make life more uncomfortable for many and unbearable for some.
Development plans
Status
Size, it is said, is not everything. This certainly is true with the new Act, as one of the smaller sections introduces probably the biggest change to the planning system since the Town and Country Planning Act 1947. Section 26 of the new Act brings section 54A into the Town and Country Planning Act 1990 (“the principal Act”), dealing with the status of the development plan:
54A.–Where, in making any determination under the Planning Acts, regard is to be had to the development plan, the determination shall be made in accordance with the plan unless material considerations indicate otherwise.
In an earlier article examining the shift in emphasis foreshadowed in PPG15 issued last year (see Estates Gazette, February 2 1991, p 98) it was suggested that there was an indication that government policy was changing so that up-to-date local plan policies would take precedence over all other material considerations. This is now undoubtedly the case, as this policy shift has been endorsed by legislation. To appreciate the consequences of this particular change it is useful to look at some of the comments made in the House of Commons debate when the Government conceded the principle of enhancing the status of the development plan.
When this amendment was first introduced in the debate on the report stage of the Bill on May 16 it took the following form:
For section 70(2) of the principal Act there is substituted–
(1) In dealing with such an application the authority shall first consider the provisions of the development plan, so far as material to the application, and shall then have regard to any other material considerations.
This amendment was introduced by the Opposition, but it became clear during the debate that the Government was content to adopt the principle, as the comments of the minister, Sir George Young, made only too clear:
On Second Reading, I said that we wanted the development system to be plan-led and that the market should respond to the signals given in the development plan. That has always been the fundamental principle underpinning the planning system. (Hansard, col 500, May 16 1991.)
It may not be enough for us to use non-statutory planning guidance to emphasise that we are operating a plan-led system. Given the procedures that have to be gone through to prepare, to consult and to secure agreement for a district plan, I understand the force of the argument that we have heard this evening that the plan should be the starting point or the first consideration when one looks at the planning application …. The Government want the weight given to the development plan increased. The Bill will do that by ensuring that we have all the mechanisms in place to provide a comprehensive, relevant and up-to-date development plan system. (Hansard, cols 501 and 502, May 16 1991.)
We have always regarded the development plan as important, but Circular 14/85 appeared to downgrade it by referring to it as only one of the material considerations. Those days are well behind us. Today’s debate should leave no doubt about the importance of a plan-led approach. (Hansard col 503, May 16 1991)
However, the minister made it clear that while the Government was prepared to adopt the principle of the amendment it could not follow the wording proposed by the Opposition and that some drafting changes would be required. When the eventual clause appeared it went further than the Opposition had expected. So much so that its prime mover, Clive Soley MP, in the debate in the House of Commons on June 19 said:
I am delighted to welcome [the] new clause …. It has been described as by far the most significant concession that the Government have made on the Bill in either of the Houses of Parliament. It gives force to the Minister’s statement on Second Reading that he wanted development to be plan-led rather than market-led. I have taunted him about that, but I must withdraw my taunt now, because this concession shows that the plan now has an important status in determining development outcomes …. The Minister has gone further than we expected, and it would be churlish of me not to put on record our gratitude for the Government’s move. It will be welcomed not only by the Labour Party but by many Conservative members and many outside organisations. (Hansard, col 132, June 19 1991.)
The most significant difference between the clause proposed by the Opposition and the section in the Act is that the latter goes much further, effectively ensuring that the enhanced status of the development plan applies to all planning decisions rather than just those relating to planning applications, which was what the Opposition had proposed.
It is difficult, if not impossible, to over-exaggerate the effect of section 54A. Despite the intimation of a major policy change in favour of a development-plan-led system contained in PPG 15, there appears to be little evidence that landowners (used in the widest sense to include farmers, institutional investors and companies with redundant land) or developers have recognised or responded to the challenges thrown up by this change in emphasis.
Some local planning authorities, no doubt encouraged by the tone and content of PPG 15, set about preparing local plans with new vigour. Consequently, those plans which have passed the public consultation stage effectively represent lost opportunities for those who, within the next 10 years or so, may have wanted to promote development which is not on all fours with the policies in those plans. No doubt some will choose to challenge refusals of planning permission at appeal and argue either that they were aware of the emerging policies but had no resources to challenge them at the local plan inquiry or that their development proposals had not come into being at that time. Either way, little sympathy can be expected from the Department of the Environment. Indeed, in the latter case, it could be argued that the rationale behind a development-plan-led system is to prevent such “non-conforming” proposals coming forward in all but the most exceptional circumstances.
On the other hand, section 54A effectively raises the status of up-to-date plans to that bordering on the quasi-statutory. That being the case, it could be said that the ground rules have altered to such an extent that fairness dictates that all existing local plans (including those which have recently passed through the local plan inquiry stage) ought to be set aside and be submitted once more to public consultation, with objectors being afforded another opportunity to make representations to local plan inquiries. No doubt some will have chosen not to object to recently emerging local plan policies because it was then believed that the policies could be challenged on appeal. Denying them the opportunity to challenge policies at appeal because of the change in the law may lead to serious prejudice. Clearly, inspectors will have to tread a fine line in deciding when to allow policies to be challenged and to what extent.
One of the first casualties of this change will be existing policy guidance. The advice in PPG1, particularly that found in paras 12 to 15 inclusive, is now at variance with section 54A, for far greater importance must now be attached to the provisions of the development plan than is suggested in that guidance note. Other policy guidance which refers to the development plan as being only one of the material considerations to be taken into account will have to be similarly revised or replaced.
It is interesting to speculate what the reasoning was behind the Government’s remarkable willingness to concede the principle of an enhanced status for development plans. Is it an example of continental drift whereby the United Kingdom planning system begins to resemble some of the more rigid zoning systems found on the continent? Whatever the reason, some of the consequences are already apparent.
(a) Developers and landowners must now monitor the progress of all emerging local plans which may affect any proposals that they may wish to put forward in the next 10 years or so. Missing deadlines may prove to be an extremely costly error. Those who fail to recognise this imperative need to take action immediately may well find that the amount of land available to them for development becomes rapidly exhausted, thus undermining the ability of some to survive into the medium or long term without an adequate land bank. Many professional advisers have commented on this but few clients appear willing to listen. Those who turn a deaf ear may live to regret it. Investors in companies which appear to be ignoring the need to take action now ought to be concerned for the longer-term prospects of the company and the effect upon the value of their investment.
(b) Doubts have been expressed about the ability of the local plan system to cope with the massively increased workload which is expected of it. It must not be forgotten that Schedule 4 to the new Act imposes a duty on local authorities to prepare district-wide local plans. Already local plan inquiries running into many months are becoming the norm as objectors feel compelled to present their cases in detail reminiscent of planning appeals. In time local plan inquiries may come to resemble circuses where teams of developers, consultants and lawyers trail around from authority to authority presenting cases in order to protect their medium-and long-term development proposals.
(c) An unwelcome increase in judicial review of planning decisions may follow if some objectors feel that their representations to local plan inquiries are not handled correctly either by the inspector or by the local planning authority. The wording of section 54A itself has the potential to cause conflict. How is it to be determined when “material considerations indicate otherwise”? Inspectors determining planning appeals can expect to face a difficult task in assessing when to accord weight to other material considerations and to what extent. Clear policy guidance from the centre will be required.
The overall effect of a move towards a development-plan-led system is more difficult to predict. Given that local plans cover 10-year periods, landowners and developers will have to adopt a more long-term strategic view of development. Those chief villians of short-termism, the lending institutions (or at least some of them), may have to revise their approach to funding development projects to reflect the far longer lead times which will be required. If the system is to work effectively, local planning authorities will have to establish mechanisms to monitor continually and revise local plans in order to ensure that they remain up to date; otherwise the system may break down.
Preparation
The radical proposals outlined by the Government in its White Paper The Future of Development Plans have, by and large, not made their way into the Act. The changes to development plan preparation are now found in the provisions of Schedule 4, to which effect is given by section 27.
Section 31 of the principal Act is amended. County councils are required to prepare single structure plans for the whole of their area which will set out the general policies in respect of the development and use of land in their area; in particular they must include policies for the conservation of the natural beauty and amenity of the land. Powers are now given to county councils to adopt plans rather than submit them to the Secretary of State for approval. Copies of the proposals have to be sent to the Secretary of State, who has powers of objection, direction and call-in. There has been some concern raised by this change, which means that county councils will be in the position of judge and jury in their own cause, although this is no different to the situation which currently exists regarding the preparation of local plans.
The preparation of local plans is now to be mandatory (but only within such period, if any, as the Secretary of State may direct). They are to be district-wide and comprehensive and also in general conformity with the structure plan. There are separate provisions regarding the preparation of local minerals plans. Schedule 4 also contains some complicated transitional provisions regarding the preparation of unitary development plans, structure plans, local plans and minerals and waste plans.
Controls over development
The Government chose not to tackle the substantive issue of planning gain (which is the subject of a research project that is expected to be reported early next year) in the new Act, but merely to enact changes to section 106 of the principal Act dealing with the mechanics of planning agreements. The background to these changes, and in particular the consultation paper entitled Planning Agreements, was dealt with in an earlier article this year (see Estates Gazette, February 9, p 92). Section 12 of the new Act substitutes for section 106 of the principal Act three new sections, namely sections 106, 106A and 106B. The first of the substituted sections deals specifically with planning obligations (see below), the second with their modification and discharge and the third with appeals.
The new section 106 introduces the concept of a unilateral undertaking as an alternative to a planning agreement and it encompasses both within the expression “planning obligation”. Both are enforceable against the landowner and his successors in title if entered into in accordance with the statutory requirements, although it is provided that the liability of a landowner may be expressed to determine after he has parted with his interest in the land. The permissible content of planning obligations is now much more widely defined and extends to the carrying out of specified operations or activities and implementing specific uses. In addition, the landowner may be required to pay to the local planning authority a sum or sums of money on a specified date or dates or periodically. The restrictions and obligations may be imposed either permanently or for a specified period.
Planning obligations may be unconditional or entered into subject to conditions. It seems unlikely that any prudent landowner or developer would enter into a unilateral undertaking which was not expressed to be conditional upon the grant of planning permission. Such an undertaking would, however, presumably remain enforceable by the local planning authority even if planning permission were not granted.
The statutory formalities require that a planning obligation is entered into by means of an instrument executed as a deed which states that the obligation is a planning obligation for the purposes of the section. The instrument must identify the land, the person entering into the obligation, the nature of his interest in the land and the local planning authority by whom the obligation is to be enforceable, as now there is a requirement for registration of the planning obligation as a local land charge under the provisions of the Local Land Charges Act 1975. Attempts to persuade the Government to provide for wider publicity were unsuccessful.
The new section goes on to spell out the local planning authority’s powers of enforcement. Any restriction or requirement imposed under a planning obligation is to be enforceable by injunction. Where there is a breach of any requirement in a planning obligation to carry out specific operations on the land, the local planning authority will enjoy a right of entry for the purpose of carrying out those operations coupled with a right of recovery of any expenses reasonably incurred in so doing. Obstruction is made an offence. Regulations may provide for such expenses (and any sum required to be paid under a planning obligation) to be charged on the land.
Policy guidance is to be issued. The Government has stated that it expects that recourse to unilateral undertakings will be relatively infrequent and that obligations will generally be entered into by mutual agreement. No doubt the Government envisages their use where an impasse has arisen between a developer and the local planning authority.
The provisions of section 106A, which are entirely new, deal with the modification and discharge of planning obligations. A person against whom a planning obligation is enforceable may apply to the local planning authority either for the planning obligation to be modified, as specified in the application, or for it to be discharged altogether. Regulations will be made which will govern such applications and may prescribe a period during which such applications may not be made. The section itself provides that if no such period is prescribed then the period is one of five years beginning with the date on which the planning obligation is entered into.
A local planning authority, on receipt of such an application, may take one of three courses. First, it may decide that the planning obligation shall continue to have effect without modification. Second, it may determine that the obligation no longer serves a useful purpose and then discharge it. Third, it may take the view that the obligation continues to serve a useful purpose but would serve that purpose equally well if it had effect subject to the modifications specified, and that, accordingly, it should have effect subject to those modifications.
It will not be possible to make an application to the Lands Tribunal under section 84 of the Law of Property Act 1925 in respect of a planning obligation, but the ability to discharge one by agreement between the local planning authority and the person against whom it is enforceable is preserved subject to such agreement being entered into by an instrument executed as a deed.
There is provision in section 106B for an appeal to the Secretary of State where the local planning authority either has failed to give notice of its determination within the prescribed period or has determined that the planning obligation shall continue to have effect without modification. The Secretary of State will have open to him the three courses of action described above. He is, however, bound to give the applicant and the local planning authority, on request, an opportunity of appearing before and being heard by an inspector appointed by him for that purpose. The Secretary of State’s decision is not subject to any statutory review procedure, but judicial review would be available.
These provisions will apply only to arrangements which constitute “planning obligations” for the purposes of the new section 106. Existing planning agreements will presumably be governed by the law under which they were entered into unless they are dealt with in any transitional provisions contained in a commencement order.
Section 12 of the new Act also deals with Crown land in this context and amends sections 296 and 299 of the principal Act. It provides that the appropriate authority in relation to any parcel of Crown land may enter into a planning obligation with the local planning authority, by means of an instrument executed as a deed, although such planning obligation will be enforceable only by that local planning authority against successors in title with a private interest in the land. Without the consent of the appropriate authority the remedy of injunction will not be available, neither will it be possible for the local planning authority to exercise any right of entry. Subject to that, a planning obligation entered into in respect of Crown land is governed by the same provisions as any other planning obligation.
The demolition of buildings is brought within the definition of “development” contained in section 55(1) of the principal Act by means of section 13 of the new Act which defines it expressly as a building operation. The Secretary of State is, however, given a power to direct that the demolition of any particular description of building shall not amount to development. The direction may be given to local planning authorities generally or to a particular local planning authority. (The Government’s stated intention is to use this power to exclude from planning control all demolitions except those of dwelling-houses.)
Under section 14 of the new Act, the placing or assembly of a fish-farming tank or cage in inland waters is also brought within the definition of “development” (to the extent that the works in question do not already constitute development) by deeming this to be an engineering operation in respect of the land below. Structures in place before the provisions come into force are not affected.
The Secretary of State is granted the power by section 15 of the new Act to specify classes of development in respect of which consideration must be given to the likely environmental effects before planning permission is granted. This introduces the possibility of a secondary level of mandatory environmental assessment outside the scope of the provisions of the Town and Country Planning (Assessment of Environmental Effects) Regulations 1988 (SI 1988 no 1199).
Section 16 of the new Act seeks to rationalise the requirements for the advertising of applications for planning permission for particular classes of development and for the notification of owners and other interests generally. These matters will now largely be dealt with by means of a development order rather than partly by such means and partly by the principal Act. The obligation to notify owners and agricultural tenants of land in respect of which a planning application is made is, however, retained within primary legislation. The section also removes the present six month time-limit on prosecutions for the offence of issuing a false or misleading certificate in this connection.
The DOE has announced the publication of a consultation paper which will propose that all planning applications should be the subject of additional publicity and, in particular, that neighbours should be notified. Again, any changes will be dealt with by means of a development order.
Local planning authorities will enjoy, under section 17, a statutory power to reject repetitive planning applications in circumstances where the later planning application is in substantially similar form to one which has been turned down by the Secretary of State, provided there has been no significant change in the development plan, so far as material to the application, or in any other material considerations. The power will be exercisable if the Secretary of State has, within the preceding two years, refused (whether on the exercise of his call-in powers or on appeal) to grant planning permission in response to a similar application. For this purpose an application is a “similar application” if, in the opinion of the local planning authority, the development and the land to which the applications relate are the same or substantially the same.
There is no statutory challenge to the exercise of this power by a local planning authority, though a challenge in law would be available in the usual way by application for judicial review. If, however, a local planning authority fails to notify the applicant of their decision to exercise the power within the prescribed or agreed period then the usual right of appeal to the Secretary of State for non-determination remains available.
The Secretary of State is also given a power by section 18 of the new Act, when it appears that an appellant is responsible for undue delay in an appeal, to give the appellant notice that the appeal will be dismissed unless the appellant takes within a stated period the steps specified in the notice. Failure on the part of the appellant to take those steps within such a period entitles the Secretary of State to dismiss the appeal summarily. This will pose a threat to appellants who have appealed for purely tactical reasons.
Amendments to section 74 of and Schedule 1 to the principal Act are made by section 19 of the new Act enabling planning applications which relate to county matters (as defined in Schedule 1) to be submitted direct to county councils rather than through district councils as at present.
