In the first of a special two-part series on the 10 current planning law issues every practitioner should know, Carl Dyer runs through numbers one to five
1. Change is constant
The old saying “the times they are a-changin” was never more true than it is of planning. The law is changing all the time.
There has been a growing realisation for some years that our planning system has not been delivering the level of development at a pace that the country’s economy requires if it is to compete internationally. The need to “do something” has to be reconciled with an understandable political desire not to upset too many people at once. The result has been a slow drip-feed of legislative amendments to the Town and Country Planning Act 1990, to the point where Sweet & Maxwell’s Encyclopaedia of Planning Law and Practice now runs to nine volumes plus a separate index.
Most recently, less than a week after the Housing & Planning Act 2016 (“the 2016 Act”) finally received royal assent (and before the civil servants of the Department of Communities and Local Government even had a composite copy of the new legislation) the Queen’s Speech opening the 2016/2017 session of parliament was already promising further reforms in the coming legislative session.
It is doubtful there is a practitioner alive who could claim with a straight face to know all aspects of planning law. All mere mortals can do is strive to keep up, and try to anticipate the next developments.
As one example, the planning regime is in the middle of a battle between two schools of thought: those who wish to address an immediate problem by seeking to impose affordable housing requirements; and those who wish to address the long-term shortage of housing by encouraging more house building, and providing exceptions to those policies.
There have been three separate changes in quick succession. They are unlikely to be the last.
2. Affordable housing: small sites
The first of these changes took the form of a written ministerial statement (“WMS”) made by the secretary of state for communities and local government in parliament on 28 November 2014.
This statement imposed a threshold below which local planning authorities could not require affordable housing to be imposed or tariff contributions to be levied. The threshold was a scheme of 10 dwellings or 1,000 sq m (10,800 sq ft). (There was a lower five-dwelling threshold for rural sites.) The government’s intention was to encourage small-scale developers to build more small sites to contribute to housing supply, unburdened by the need to pay tariff-style contributions to the local planning authority, or to provide affordable housing units that might make schemes unviable.
The guidance took effect and became a material consideration under the National Planning Policy Framework, to which local planning authorities were required to have regard when making a determination of a planning application under the 1990 Act.
Two local planning authorities – West Berkshire District Council and Reading Borough Council – challenged that policy on a variety of grounds: that it was inconsistent with the statutory planning regime; that the secretary of state had failed to take into account necessary material considerations; that the consultation on the proposals was legally inadequate; that the secretary of state failed properly to assess the impact of the proposal on persons with protected characteristics, contrary to section 149 of the Equality Act 2010; and that the policy was irrational.
At the High Court, Holgate J found against the secretary of state on the first four grounds (as a consequence of which, he made no determination on the irrationality ground) and quashed the WMS (West Berkshire District Council and another v Secretary of State for Communities and Local Government [2015] EWHC 2222 (Admin); [2015] PLSCS 242).
The government promptly withdrew the planning guidance issued reflecting the WMS, but appealed. The Court of Appeal unanimously overturned the decision ([2016] EWCA Civ 441; [2016] PLSCS 137). The WMS has since been reinstated and the small sites exception applies once more: developers promoting sites with fewer than 10 units, or of less than 1,000 sq m, can now cite central government policy as a reason why they should not have to provide affordable housing or pay tariff-based section 106 contributions.
That is not quite the end of the matter. While local planning authorities are required to have regard to government policy, it is not formally binding on them if they have good reasons to depart from it. It will be interesting to see whether any local planning authorities seek to continue to apply their tariff-based contributions, or seek affordable housing on sites below the threshold. To do this will need very careful guidance to be given to the elected members in the officers’ report and at committee. They will need to show that they have had regard to the government’s policy, and also demonstrate that there were compelling reasons to depart from it. Unless the reasons are truly compelling, it would probably be a very brave planning officer (or politically motivated members) who would run such an argument in the face of up-to-date national policy, since the developer will of course have a right of appeal to the planning inspectorate.
3. Affordable housing: vacant buildings
At the same time as reintroducing the small sites exemption into the planning practice guidance concerning planning obligations, the government also reinstated the vacant building credit (“VBC”). The purpose of the VBC is to encourage the regeneration of brownfield sites, including in particular those with existing buildings on them. It amounts to a policy recognition of the increased costs involved in redeveloping an existing site – whether those costs are because of demolition and site clearance, or the costs of refurbishment and alteration in adapting an existing building from one use to another.
The VBC works by allowing the developer to offset the existing floorspace on the site against the new floorspace created in the development. Affordable housing contributions are then to be assessed only against the net floorspace created. So if a developer demolishes 8,000 sq m of commercial or other floorspace, and replaces it with 10,000 sq m of housing, the local planning authority will be able to require affordable housing only in respect of the net increase of 2,000 sq m of floorspace. At a 50% tariff, that might amount to only 1,000 sq m of affordable housing, which is a substantial reduction from the 5,000 sq m of affordable housing that might otherwise have been required without the VBC.
Where a building is simply converted from another use to housing, without any increase in floorspace, the application of a VBC would mean that no affordable housing was required at all. The government clearly hopes that this measure will encourage the provision of a significant new supply of housing within existing urban areas. Some local planning authorities are somewhat less keen on it.
4. Affordable housing: starter homes
The latest skirmish in the affordable housing campaign appears in the opening sections of the 2016 Act. The government’s intention here is to help people onto the property ladder by creating affordable “starter homes” which can be purchased by first-time buyers. This echoes the efforts of the 1979 Conservative administration to create a “property-owning democracy”, seeing property ownership as being more liberating than potentially a lifetime of tenancy arrangements. At the time of writing, regulations are awaited that will put the flesh onto the statutory bones, but the outline of the scheme is as follows: the Act defines a starter home as either a newly built or newly converted property, which has not yet been occupied by anyone else post-construction or conversion, and which is made available to qualifying buyers between the ages of 23 and 40 at a price which is 20% below the open-market price of comparable units in the development.
There is provision in the 2016 Act for the minister to make regulations which may alter who constitutes a qualifying buyer, and for how long they are able to hold a property before they are able to sell it at a market price.
There is also provision for starter homes to be counted as part of the affordable housing contribution of a given development. This will enable developers to offer starter homes which they can sell themselves at a marginal discount on market price, as opposed to affordable housing which they can only dispose of either to an in-house registered housing provider or to an external registered housing provider – in either event, usually at substantially less than might otherwise have been achieved.
The measures were fiercely contested in the House of Lords as the bill went through parliament, being returned to the Commons more than once. The battle lines in both chambers very much reflected those rehearsed above: the traditionalists fighting a rearguard action on behalf of affordable housing, and the government seeking to introduce an alternative to it, which might encourage more house building and more home ownership.
All parties will be monitoring with interest the amount of starter homes provided, and the contribution this regime makes to providing more housing.
5. Judicial review delay
The Planning Court is working well. Its introduction as a separate division of the High Court was generally welcomed, and the timeframe for determining whether to grant or refuse permission in judicial review cases has come down. Hearings are arranged more quickly, sometimes as “rolled up” hearings where the issue of permission and the substantive merits of the case are heard together.
Judges considering applications for permission to take judicial review proceedings have been given the power to rule that they are “totally without merit” and so preclude an appeal from their decision. However, while this reform was welcomed, it appears to be sparingly used.
As a result, it is still too easy for spurious objections lodged with the Planning Court to delay desirable schemes.
One recent example involved a three-part scheme comprising a new college development, the reuse of the existing college buildings and an enabling housing development to fund the construction. Planning permission was granted in June 2013. A judicial review was filed by residents objecting to the housing aspect of the scheme. Permission was refused on the papers in March 2014. It was refused again on an appeal to a single judge sitting at an oral hearing. The applicants submitted a paper appeal application to the Court of Appeal. This was dismissed in July 2014. An application for an oral hearing before the Court of Appeal was dismissed by a fourth different judge in November 2014.
That should have been the end of it. Instead, some eight or nine months later, an application was submitted to reopen the case citing new evidence and a substantial injustice. That application was finally dismissed in March 2016, nearly three years after the original planning permission was granted. Four different judges of the Planning Court, and the former head of the Planning Court, Lindblom LJ, now promoted to the Court of Appeal, all ruled that the applicants did not have an arguable case, and that their challenge should not proceed – yet it cast uncertainty over the development for nearly three years. This is an area crying out for further reform.
Carl Dyer is head of the UK national planning team at Irwin Mitchell
