The government published its controversial White Paper “Planning for the Future” on 6th August 2020.
The White Paper proposes a massive overhaul of the existing planning system; the statutory framework for which has been in place (with some modifications) in England and Wales for the last 50 years.
Whilst it remains to be seen whether or not the proposals will be implemented (especially in light of the large amount of criticism it has attracted), there is certainly much to be encouraged by from the point of view of developers and landowners.
The current planning system is discretionary and planning decisions are made on a case by case basis. Sometimes it is possible to obtain a good indication that an application will be approved (for example, if it follows the relevant local plan or similar development has been permitted in the area) but all too often decisions are not consistent. Refusals or failure to take decisions often need to be appealed and the process can be drawn out for a significant period of time. This of course hinders development timescales and increases costs. The White Paper proposals as put forward seek to change this,
The White Paper proposes that land would be split into 3 categories:
- “Growth” areas - to identify areas for substantial development for which automatic outline approval would be granted.
- “Renewal” areas - to identify areas which require some/smaller scale development. Outline permission would not be automatically granted but there would be a statutory presumption in favour of approval.
- “Protected areas” - for which more stringent development controls would be in place to ensure sustainability.
Categories 1 and 2 could well be a massive step forward for landowners and developers. They would know ahead of applying for it whether planning permission should be granted and could, instead, spend time and resources on finer details, like high quality design and sustainable features; ensuring appraisals are accurate and the correct professional team is on board early. The white paper suggests that local plans would set out design parameters too, which will help with certainty for developers.
Many “lost projects” could be revisited and potentially revived under the proposals which were abandoned due to rejections under the old planning system, or where a previous permission included conditions that made a scheme unviable. In addition, developers could review areas for growth identified on each local plan and carefully select development projects to suit their strengths.
That is not all and there are further advantages proposed for developers. The government proposes a quicker, digital decision process which would include hard deadlines for decisions. Application fees paid would be returned if not determined within the relevant period of time. This would ensure that unnecessary time is not wasted with developers being stuck in “limbo” awaiting a decision and unable to move on with that or their next project.
An overhaul of developer contributions is also proposed. The current system secures contributions to local areas from developers in two ways: through the Community Infrastructure Levy (CIL) and section 106 agreements. Neither option is without its problems.
Section 106 contributions are negotiated between the developer and the local planning authority. This causes delays and uncertainty on both sides. These contributions also suit major developers who can afford to pay high contributions and have greater bargaining power but may inhibit smaller and potentially high quality or innovative developments. Affordable housing is also provided for through section 106 agreements at present.
CIL is a flat tariff-based charge calculated on new floor space for certain uses and net additional dwellings which does provides certainty. However, the money is usually due as soon as development commences which can create problems for cash flow when profit is yet to be realised. There is also disparity across the country as not all local authorities have adopted CIL and adopted charging schedules vary greatly from Authority to Authority.
The White Paper proposes a consolidated levy which is a flat rate applicable to all use classes and which will include provision for the delivery of affordable housing. The rate would be value-based (including minimum thresholds) and set nationally. The levy would not be due until occupation of the relevant development – by which time most developers have started to realise their profit. This should in turn have a positive effect on appraisals and assist cash flow. The consolidated levy has met with fierce criticism, however, due to its potential implications for the delivery of affordable housing and it is therefore very uncertain whether the proposals will survive in their current form.
All that said, it remains to be seen whether the proposals will be implemented and there is a long way to go before any proposals will be approved and made law. Consultation responses have included considerable resistance from local authorities and the planning industry, so it is probably safe to say the proposals will not be enacted as originally drawn up. Housing ministry chief planner Joanna Averley has said recently that it will be a “couple of years” before the system is in place even if a new planning bill is put forward before the end of 2021.
However, there is a certainly much to be praised from a development perspective. Could this be the beacon of light developers have been waiting for?
