As the government accelerates planning reforms, solicitors are tailoring their services to accommodate what are often contentious changes. Katharine Freeland reports.
As a country with a growing population and acute housing and infrastructure crises, planning and environmental issues are high on the UK’s political agenda. Legislation has flowed from the coalition and Conservative governments, aiming to reduce the length and complexity of the planning process, kickstart construction projects and promote local community involvement.
The Localism Act 2011 was created to bring about what the Conservatives called ‘an invitation to join the government of Great Britain’. One of the most significant features of the act was the creation of neighbourhood plans: devolving decision-making powers to communities to shape their local planning agendas. ‘Neighbourhood plans are very significant in terms of housing development in local neighbourhood planning,’ says Richard Wald, a barrister at 39 Essex Chambers, London.
They have proved popular with communities, with over 200 having passed referendums, and more in various stages of development.
A much-publicised case of a community using its neighbourhood plan to shape development is St Ives, Cornwall, which in May 2016 voted for a plan that included a clause restricting new housing to full-time residents. The decision was subject to a judicial review, dismissed in November 2016. The result will have ramifications nationwide: ‘This is a hugely important judgment for Cornwall, St Ives Town Council and for the residents of St Ives, who wanted to ensure that any new homes in the town would be the resident’s sole or main residence,’ Edwina Hannaford, Cornwall Council’s cabinet member for planning, says.
‘We know that a number of other local communities, both in Cornwall and across the country, are interested in including similar policies in their own neighbourhood plans and have been watching this case with interest.’
Tension between the national target to build more housing, and pressure by communities to curtail this ambition, is clear. This flashpoint brings into focus the complex political and social dilemmas that dog the planning process. Jason Towell, head of development at regional firm Cripps, sees these tensions first-hand: ‘Neighbourhood plans have given a greater voice for communities to influence development in their areas. While this is seen by many as a good thing, in some parts of the country it is being used as a tool to restrict and limit development.’ Towell points out that neighbourhood plans are not seen as successful by those eager to see a step change in housing development.
Of the many measures introduced by the Localism Act 2011, neighbourhood plans have sparked the most interest among the public. Other measures in the act, such as the community right to bid, community right to challenge and the creation of assets of community value, have had limited appeal.
The knock-on effect for planning practitioners is that advice is now more often provided at the initial stages of a development project. ‘Strategic advice is required to consider emerging development plans, such as neighbourhood plans, with a greater focus on housing land supply and need issues,’ Towell says. Whether neighbourhood plans will continue to be popular in the post-Cameron era remains to be seen: ‘Neighbourhood plans have been effective, but will not be so much in the future. There will be a rowing back if areas are short on their five-year housing plans’, Wald predicts.
The National Planning Policy Framework (NPPF) requires local planning authorities to identify and keep up-to-date a deliverable five-year housing supply. This is key, as under the policy planning permission should be granted unless any adverse impacts outweigh the benefits. ‘Many local authorities have lost on appeal against refusals to grant permission because developers have been able to show that, contrary to the local authority’s figures, they do not in fact have a five-year housing supply of land,’ says Nicholas Horton, head of dispute resolution at Kent firm Thomson Snell & Passmore. ‘But if a local authority is too eager to grant permission, its untested five-year housing land supply figures – if based on externally commissioned research – cannot be scrutinised in the context of a judicial review of the legality of the planning permission.’
The interaction between neighbourhood plans and local plans is a matter of contention. Whether a neighbourhood plan can be made in advance of an up-to-date local plan is the point in dispute in R (DLA Delivery Ltd) v Lewes District Council , imminent in the Court of Appeal. This matters because, if so, neighbourhood plans have the power to set the agenda on housing, which should be governed by the local plan under the NPPF. This may just be the beginning, according to Wald: ‘As far as the interaction with strategic local plans is concerned, we have certainly not seen the high watermark of conflict yet.’
The NPPF and accompanying planning practice guidance, implemented in 2012, reduced existing guidance from a thousand pages to 65. It turned the planning system on its head by introducing a presumption in favour of sustainable development, which ‘should be seen as the golden thread running through both plan-making and decision-taking’. The measures met with dismay from bodies such as the Campaign to Protect Rural England, the National Trust and the RSPB, but found support elsewhere: ‘The presumption in favour of sustainable development has resulted in a greater number of planning permissions for residential development,’ Towell says. ‘It has been most successful.’
Others feel that the NPPF has not succeeded in its aim of cutting ‘red tape’ and simplifying the planning system: ‘The intention was to reduce the amount of planning policy by relying on the presumption in favour of sustainable development, but this has not proved to be the case,’ says Sarah Easton, a property partner at Thomson Snell & Passmore. ‘Perhaps this is due to the lack of consistency in the application of planning policy by different local planning authorities.’
Planning Act 2008
After eight years, the Planning Act 2008 has also had a chance to show its mettle. Introduced by the Brown administration in the wake of the lengthy and expensive planning inquiry into Heathrow Terminal 5, which took eight years and cost £80m, the act was intended to streamline the decision-making process for major infrastructure projects. It also proposed the Community Infrastructure Levy. Both measures have had a major impact on the planning system.
‘The Planning Act has changed the service we deliver to clients out of all recognition,’ says Angus Walker, head of government at Bircham Dyson Bell. ‘For clients, it does mean that more work has to be done at the start of a project than before, which can be a deterrent. But the added certainty of the timing of the decisions and the availability of compulsory acquisition powers are a considerable advantage.’
Brexit, costs protections and environmental justice
In the courts, costs protection under the Aarhus Convention 1998 (covering public access to justice on environmental matters) came to the fore following the case of Venn v SSCLG . The claimant challenged the planning inspector’s grant of permission for the construction of a new house next door. ‘The case has proved to be significant in terms of the workings of the environmental costs regime in the UK.
First, because of the court’s broad interpretation of the term “environmental judicial review”, which has made Aarhus costs protection conferred by CPR 45.43 available to an unexpectedly wide range of environmental and planning cases,’ explains Richard Wald, a barrister at 39 Essex Chambers, London. ‘And second, because of an apparent glitch in the transposition of the Aarhus Convention into domestic law identified by the Court of Appeal, namely that such costs protection is currently unavailable to challenges brought other than by judicial review.’ This oddity is the subject of an ongoing consultation on changes to the environmental costs regime and is likely to form the subject of imminent change to the CPR.
Another area of potential change relates to the availability of Aarhus costs protection in cases which are pursued beyond the High Court, in respect of which CPR 45.43 is silent and parties can no longer assume that such protection will continue to be available. A third area relates to the potential availability of Aarhus costs protection in private nuisance claims, a matter considered in Austin v Miller Argent , and in respect of which the UK was recently found to be in breach of its Aarhus obligations (see Communication to the Aarhus Compliance Committee ACCC/C/2013/85 & ACCC/C/2013/86 published 1.12.16). ‘There are a number of unanswered questions in this area,’ Wald says. ‘We can expect to see changes to the environmental costs regime and a further increase in the environmental and planning cases which qualify for Aarhus costs protection. I expect to see the level of challenges increase.’
Another key change for environmental law practitioners is the introduction of new sentencing guidelines for environmental offences, which came into effect in July 2014. ‘This new guideline has introduced a welcome clarity for judges when imposing sentences for environmental offences,’ says Sam Boileau, environmental and safety law partner at Dentons. ‘Before they came into effect, it was very hard for judges to know where to start when imposing an environmental sentence.’ The effect is also likely to be an increase in the fines that companies can face. ‘When combined with recent judicial decisions in the field, this represents a sea change in the level of risk faced, especially for very large companies,’ Boileau says.
Cases brought under the Aarhus Convention will be untouched by Brexit, as Aarhus is an international treaty unaffected by withdrawal from the EU. However, EU environmental law is the cornerstone of most UK environmental legislation, including matters of environmental assessment, pollution control, chemicals regulation, air and water quality standards, waste management, nature conservation and environmental liability. These are also integral to UK planning legislation and policy. Although a very significant rewrite of environmental law is possible, it is not likely. ‘In view of the sheer range and importance of the laws involved, no sensible government has any choice in the short term but to preserve EU environmental laws, pending a long-term review,’ Boileau says.
Flagship schemes have progressed more swiftly since the act, but according to Wald this has come at some cost to third-party involvement. ‘There is less emphasis on the hearing phase in the process, with a front-loading on the preliminary stages,’ he says. ‘The 2008 act is coming up for a decade old, but is still finding its feet on some issues, such as energy.’
It is foreseeable that other types of development might be brought under the umbrella of the act: ‘Housebuilders wish that the streamlining of much of the consent process could be extended to new housebuilding,’ Wald says. But will they be successful? ‘Maybe, over a certain threshold, depending on the government’s willingness to amend existing legislation. It all rests on the state of the housing crisis. There will be change, given sufficient impetus.’
The Planning Act 2008 has paved the way for 60 large infrastructure projects to be given consent so far. It is not the only way a major infrastructure project can be advanced; HS2 is following the path of Crossrail in progressing through parliament by way of a hybrid bill.
Community Infrastructure Levy
The Community Infrastructure Levy (CIL) has not been so well-received. The planning charge was supposed to ensure that development contributes to the cost of the infrastructure that it will eventually rely upon. Under the CIL, new development that creates a net additional floor space of above 100 sq m, or creates a new dwelling, is potentially liable for the levy.
Since it appeared in 2010, CIL has been repeatedly amended, ostensibly to address perceived inequalities in calculating, collecting and spending the levy. The result is considered far from the straightforward alternative to negotiated planning obligations that was intended at the outset. ‘It was hoped that by having levy rates set in advance, in consultation with local communities and developers, there would be increased certainty for developers at the outset – in contrast to the previous system whereby obligations for payments towards infrastructure were negotiated on a case-by-case basis,’ Easton says.
Horton adds: ‘There have, however, been amendments to the CIL regulations introduced every year but one since they came into force. The system has been criticised for a lack of flexibility to take into account the specific requirements of individual sites, for an overall lower uptake by local authorities and therefore less infrastructure funding raised.’
The charge has also had resource implications for LPAs. ‘Introducing a CIL charge has created a stampede of applications at each local planning authority,’ says Oliver Wright, head of the planning team at Mayfair, London firm Forsters, ‘with developers seeking to get their permission before they receive a non-negotiable bill for CIL.’
One of the biggest claims about CIL was that it would largely eliminate the need for section 106 agreements, often referred to as ‘developer contributions’, which helped to mitigate the impact of the development. In practice they are still used, particularly to deliver affordable housing.
‘It was recognised fairly early on that affordable housing would not fall within the CIL regime, despite it being initially included in the definition of “infrastructure” in section 216 of the Planning Act 2008,’ Wright explains. ‘The result is that it is left to the section 106 agreement to deliver arguably the most high-profile and nationally important piece of “infrastructure”.’
Although the CIL model allows a straightforward, definitive cost to be identified and paid at the outset, clients do not appreciate the lack of clarity and front-loading of costs. ‘With section 106 contributions developers could see a direct link between what they were paying and the development, which is not the case with CIL contributions,’ Horton says. ‘There is also scope for confusion by the local communities, and even at planning committee level as regards the interaction between CIL, planning conditions and section 106 agreements.’
Wright argues that the aim should be to revert to a basic premise of CIL: a transparent process that means all types of development provide their fair share of funding for key pieces of infrastructure, which are then delivered on time. In 2015 the Department for Communities and Local Government launched an independent review of CIL, so simplification may be in the offing.
The Conservative government has continued to push its programme of planning reform. The Housing and Planning Act 2016, which received royal assent last May, contains a series of measures to promote home ownership and boost housebuilding, such as legislation to allow the sale of higher-value local authority homes, the introduction of starter homes and ‘Pay to Stay’, as well as reform of the compulsory purchase regime. The Neighbourhood Planning Bill, introduced into parliament in September 2016, proposes further amendments to the compulsory purchase regime.
The Housing and Planning Act 2016 also contains the notion of ‘permission in principle’, billed by the government as a new, faster and more effective route to obtaining planning permission for housing-led development, by establishing the principle of development once and for all in relation to a particular site. ‘Of all the measures brought forward in what is now the Housing and Planning Act 2016, the system of “permission in principle” seems to have received the most uncertain of welcomes,’ Wright says.
While the government believes that the ‘permission in principle’ route will speed up the delivery of housing and reduce the burden on developers – who often invest heavily in planning applications without knowing whether they will ultimately be granted permission – many practitioners are less convinced.
Wright cites the number of stages which need to be completed before ‘permission in principle’ is obtained, and the uncertainty over important questions, such as how the system will interact with existing requirements for environmental impact or habitats assessment. There is also a question over whether financial institutions will provide funding on the basis of a ‘permission in principle’. The move could add a new layer of complexity to an already overburdened system.
‘It is almost inevitable that “permission in principle” will divert resources away from the business of dealing with the range of existing applications,’ says Wright. ‘The feeling in many quarters is that the government would do well to focus its efforts on improving the delivery of housing through the existing system, rather than creating a new and uncertain parallel [regime].’
Others welcome the change, but question the government’s approach.
‘The Housing and Planning Act 2016 – together with the Neighbourhood Planning Bill’s changes – will improve matters, but in a sense are tinkering around the edges of creating a step-change in housebuilding,’ says Towell. The Law Commission is just one of the bodies advocating more dramatic legislative consolidation.
‘The government is continuing to make legal changes to allow more housing and it is unlikely to stop doing so,’ Walker says. ‘It seems to introduce new ones before knowing whether the previous ones have worked or not. It may discover that planning is not the main brake on housing delivery.’
More radical change is expected in the forthcoming housing white paper, which should give full detail of the new government’s plans for tackling the housing crisis, preceded by housing minister Gavin Barwell’s 3 January launch of the government’s ‘starter home’ package. The strategy had a lukewarm reception, and the white paper will need to go much further to meet expectations raised by Sajid Javid, secretary of state for communities and local government, who said it would take ‘unprecedented steps to open up the market’.
Katharine Freeland is a freelance journalist