In July, Labour introduced the Planning and Local Representation Bill – referred to as the “Use it or lose it bill” – which proposes to reduce the time period to implement full planning permissions for major developments to two years. This has reopened the conversation around slow build-out in light of the number of planning permissions granted annually.
The clock starts ticking on the life of a planning permission from the day it is first granted. Unless otherwise stated in the conditions appended to a permission, currently a full planning permission will expire if it isn’t implemented within three years from the date of grant, or in respect of an outline permission two years from the date of the grant of the last reserved matters approval.
The premise behind the bill is that forcing developers to implement a development sooner will speed up housing delivery. But will it?
Lawful implementation – the basics
The starting point for what constitutes lawful implementation is section 56 of the Town and Country Planning Act 1990, which says that a development is taken to be begun on the earliest date on which a “material operation” begins to be carried out. A material operation can be a work of construction, demolition, digging of a trench to contain the foundations, laying of an underground main, operations in the course of laying out a road or a change in use which constitutes material development.
Case law has said that such material operations can be as simple as pegging out a line of a road. While in theory it sounds relatively simple to implement a development by carrying out a material operation, there are other complicating factors that can make implementing a planning permission more difficult.
Pre-commencement conditions
In addition to carrying out a material operation, in order to lawfully implement a development all pre-commencement conditions appended to a planning permission must be discharged – of which there can be many on a major development. These conditions can be a major hurdle for developers when a permission is nearing expiry. Using an alternative trigger that must be discharged early in the life of the development – for example, during the construction phase – can ensure that critical matters are signed off by the local planning authority before the development is built out, but won’t interfere with implementation of the planning permission.
For this reason it is beneficial at the application stage to discuss the trigger for conditions with the local planning authority to ensure that only conditions which are absolutely necessary to submit prior to commencement have that trigger. In fact, since 2018, local authorities have been required to obtain the consent of applicants prior to imposing pre-commencement conditions on full planning permissions. The reality is, however, that the fear of a refusal for failing to consent means that this requirement has not lead to a marked change in the reduction of pre-commencement conditions.
If a permission has already been granted and there is a risk of expiry before ll the pre-commencement conditions have been satisfied, it isn’t possible to extend the life of the permission. However, if there are very few pre-commencement conditions outstanding (and enough time to submit an application), a section 73 or section 96A application can always be made to vary the triggers of the outstanding conditions, pushing them back so that implementation can occur faster.
Section 106 and CIL
Section 106 agreements are an entirely different matter. Typically, although a number of obligations can be due prior to commencement of development, the agreement will carefully define the term “commencement” to carve out much of what is defined as a material operation in section 56 of the Town and Country Planning Act 1990. This means that even though the permission has been implemented, section 106 obligations are not necessarily triggered until work on the development commences beyond demolition, hoarding, excavation and general site preparatory works.
But it is worth noting that while it is possible to negotiate later trigger dates for planning obligations under a section 106 agreement, CIL liability still arises on implementation of planning permission.
Will “use it or lose it” rules speed up housing delivery?
Developers routinely need to jump through a series of hoops to implement a permission, largely in the form of satisfying pre-commencement conditions. Added to that, site assembly may also take time, particularly if compulsory acquisition is necessary. It is doubtful whether condensing the amount of time for a developer to undertake this work will actually speed up build-out. The Letwin Review – Independent Review of Build Out (2018) – concluded that land banking wasn’t the issue slowing build-out, but rather a lack of variety in the types of products being brought to market. Additionally, even if developers do manage to implement within the reduced deadline, once implemented, planning permissions do not have to be built out in full.
If the “Use it or lose it bill” moves forward, there is a risk that it could have the opposite effect of what is intended – it could make implementation of planning permissions more challenging. Careful consideration of the triggers for conditions and planning obligations will be more important than ever to minimise the barriers to implementation.
Christina Achkarian is an associate in the planning and environment team at Ashurst LLP
