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White paper - Planning for the future

  • Market Insight 11 August 2020 11 August 2020
  • UK & Europe

  • Infrastructure

The Government’s White Paper proposes a radical and ambitious overhaul of the English planning system, intended to streamline the planning process. It sets out key principles for a new system, which is likely to involve new primary legislation. The wide ranging reforms extend from plan making – which, in effect, introduces a zoning system under which land would be allocated for Growth, Renewal, or Protection – to the wholesale replacement of the existing system of Section 106 and CIL contributions with a one-size-fits-all consolidated ‘Infrastructure Levy’.

The proposals are undoubtedly pro-development, although primarily focused on the housing market and underpinned by a focus on 'building beautiful', which is reflected in a fast-track approach for beautiful designs.  They represent a helpful move towards simplifying local plans so they provide ‘a core set’ of rules (standards and requirements) which will apply to ‘suitable’ development uses for specific areas.  In addition, the introduction of local design guides and codes to be drawn up by local authorities and neighbourhoods (through Neighbourhood Plans) will influence the form and appearance of development in the area, to reflect ‘local character and preferences’.

Local Plans

Central to the proposed reforms is the revised role for Local Plans. They will no longer set out generic policies but, rather, they will identify three areas for development, namely:

  1. Growth areas will identify areas of land which are suitable for substantial development, setting out uses which are acceptable 'in principle' within those areas. The extent of detail to be included within these areas is yet to be determined but there is an indication that it could include set parameters (e.g. height, density, massing etc.) along with masterplans etc. Areas included within a growth area will, on adoption of the Plan, automatically be granted outline planning permission. Subsequent detail would be obtained by: (i) applying for reserved matters approval under a revised system; (ii) a Local Development Order; or (iii) in respect of exceptionally large sites such as new towns, a Development Consent Order.
     
  2. Renewal areas would benefit from a strengthened version of the presumption in favour of sustainable development. Early discussion of the White Paper indicates that these renewal areas would also identify uses which would be appropriate in order to benefit from this presumption. In essence, this would mean that local authorities would need a 'very good reason' for refusing consent if a proposal has been identified as appropriate within the relevant renewal area.  Obtaining consent within renewal areas could be undertaken by: (i) a faster planning application process requiring the submission of significantly less supporting material; (ii) a new form of permitted development ('PD') if design codes (as discussed below) and other prior approval requirements are met; or (iii) a Local or Neighbourhood Development Order.
     
  3. Protected areas would include Green Belt, AONB, conservation areas and heritage designations, local wildlife sites, areas of significant flood risk and important areas of green space. Interestingly, it would also include areas of open countryside that are not included within a growth or renewal area. Any application proposed within protected areas would come forward as now through planning applications, which would be judged against the relevant policies of a revised NPPF.

A further crucial element of Local Plans, which will dictate how growth and renewal areas are identified by local planning authorities, is the introduction of a new binding national standard methodology for calculating an authority's housing requirement. This approach would distribute the national housebuilding target (currently, 300,000 homes per annum) between local authorities, taking into account environmental constraints. Importantly, and in a significant move away from the current approach, this local housing requirement figure would be set at a national level, with neither local planning authorities nor developers able to dispute the identified figure. Early indications suggest this revised standard could result in significantly higher housing targets for many authorities, particularly London boroughs. 

It is envisaged that the revised standard housing requirement methodology would be predicated on the detail set out in the 'Changes to the current planning system' consultation paper, which was released simultaneously with the White Paper and is discussed further below.

Changes to Local Plans would require work-loads and consultation to be front loaded. Whilst a time limit of 30 months for adoption of Local Plans is included within the White Paper (with an extended transitional time limit of 42 months for authorities who have adopted plans within the last three years or where a plan is with the Secretary of State), there is concern that authorities will struggle to resource the substantial work which will be required. Indeed, at present there is no clear indication as to how compliance with these time limits would be enforced at a national level.

Generally, there is also a push to modernise the way in which Local Plans are presented and accessed by digitalising to make them 'more visual, accessible and easier to navigate'. As to the process for adoption of Local Plans, the 'soundness test' will be replaced with a sustainability test. In a welcome move, the Duty to Cooperate would be revoked. The Government also suggests the possibility of revoking the automatic 'right to be heard' and, more controversially, removing the Examination stage altogether. Following adoption, Local Plans will have to be reviewed at least every five years.  

As to the role of land owners and the public during preparation of Local Plans, the White Paper is clear that consultation and engagement with the public must be a priority to uphold the democratic process. Given the intention to 'streamline consultation at the planning application stage' and the removal of the 'right to be heard', further detail will be necessary to ensure community engagement in the process is safeguarded. For developers, active engagement in the call for sites process will be more important than ever.

'Build beautiful'

The White Paper leans heavily on the recommendations of the Building Better, Beautiful Commission report, including the 'fast-track for beauty', which would, in short, expedite attractive and popular development. We would note the following key points:

  • A National Design Guide and National Model Design Code are to be published together with a revised Manual for Streets, which together will have a direct bearing on the design of new communities. The proposals also seek to bring forward locally-produced design guides and codes to make design expectation more visual and predictable, and to reflect the character of the local area. Schemes which comply with local design guides and codes will have a far greater prospect of swift approval. For developers, this will provide some much needed clarity.
     
  • High quality development will be incentivised and accelerated through the 'fast-track for beauty', which will be achieved by: (i) updating the NPPF to make it plain that schemes which comply with local design guides and codes will be approved quickly; (ii), including a condition on the outline permission for growth areas requiring compliance with a masterplan and site-specific code; and (iii) widening the nature of PD rights to enable popular and replicable forms of development to be approved quickly.
     
  • Great emphasis is placed on delivering beautiful places. This includes a proposal that each authority should appoint a 'chief officer for design and place-making' and the suggestion of establishing a new expert body to oversee effective use of design guidance and codes. Detail will follow, but the clear focus is on the delivery of 'beautiful' places.
     
  • Helpfully, the proposals also intend to design a quicker and simpler framework for assessing the environmental impacts of development. This would replace the current frameworks of Strategic Environmental Assessment, Sustainability Appraisal and Environmental Impact Assessment which often lead to duplication of work and overly-long reports. The new system would include early consideration of environmental aspects, simpler consolidated requirements for environmental assessment and mitigation, and consideration of environmental improvements. These changes will be welcomed by developers as the current system is unwieldy and inefficient.
     
  • The Government also intends to facilitate improvements to the energy efficiency standards for buildings to help deliver the commitment to net-zero by 2050.

Infrastructure Levy

CIL and financial planning obligations under Section 106 Agreements are to be abolished and replaced by a consolidated ‘Infrastructure Levy’ which, in summary, is proposed to operate as follows:

  • The Levy is to be charged on the final value of a development (i.e. linked to the land value uplift that is realised).  The effect of linking the Levy to final development value will result in a much greater proportion of the development value being subject to the levy in areas of high value. 
     
  • The Levy will comprise a flat-rate, valued-based charge which is set nationally - at either a single rate or at area-specific rates, and will apply across all use classes.
     
  • Instead of being payable upon commencement of development, it will instead be levied on occupation, but based upon the rate that was in place at the point when planning consent was granted. 
     
  • The power to prevent occupation will be retained by local authorities as a sanction for non-payment.
     
  • Where the final value of a development cannot be ascertained, for example where homes are built for the rental market and will not be sold, the assessment of final value will instead be based upon an assessment of the sales value. 
     
  • A value-based minimum threshold will be applied, below which no Levy would be charged.
     
  • The Levy will apply to specific PD rights for changes of use, including office to residential conversions and the new demolition and rebuild PD, even where there is no additional floorspace added (an exemption for self and custom-build development will however apply). Whilst this is unsurprising, applying the Levy to some PD rights will introduce a disincentive to undertaking such development.
     
  • London Mayoral CIL and similar strategic CIL in combined authorities, may not be abolished, and could be retained as part of the Infrastructure Levy to support the funding of strategic infrastructure.
     
  • Local authorities will be allowed to borrow against future Levy revenues to forward fund infrastructure in order to incentivise the delivery of enabling infrastructure.  It will be for the local authorities to assure themselves that this volatile borrowing stream is affordable and suitable. 
     
  • Local authorities will be given much more ‘flexibility’ as to the purposes for which they allocate the revenues from the Levy. 
     
  • Local authorities would be able to use funds raised through the Infrastructure Levy to secure affordable housing.  This is to be achieved either through: (i) in-kind delivery onsite as part of the scheme; or (ii) by means of a ‘first refusal’ right, which would allow local authorities to buy up to a fixed proportion of on-site units at a discounted price, broadly equivalent to the build costs. This is a significant move away from the current system, which rigidly separated CIL and affordable housing.

'Changes to the current planning system' Consultation Paper

The Government has also launched a linked consultation paper entitled 'Changes to the current planning system' with proposed measures to improve the effectiveness of the current system. The four main proposals are:

  1. Assessing local housing need: The Government is proposing to amend the standard method of assessing local housing need to: (i) take into account the existing housing stock levels in an area; (ii) retain household projections as part of a new blended approach; (iii) modify the baseline to be whichever is higher of 0.5% of existing stock or the projected average annual household growth over a 10-year period; (iv) introduce an affordability adjustment that takes into account changes over time; and (v) importantly, removing the cap.
     
  2. First homes: First homes would be secured through developer contributions in the short term (i.e. before adoption of the reformed system), and would be sold at a discount to market value for first time buyers as well as key workers. The minimum discount for First homes would be 30% from market value, with discretion to increase this to 40% or 50%. In addition, national policy may include a minimum requirement for 25% of all affordable housing units to be First Homes. A CIL exemption for First homes would be introduced through new regulations prior to moving towards the Infrastructure Levy.
     
  3. Small sites threshold: The Government is seeking to support SME builders by temporarily lifting the small sites threshold below which developers do not need to contribute to affordable housing. Under this proposal, the small sites threshold would (in most cases) be lifted to 40 or 50 units to support SME builders recovering from the impact of Covid-19.
  4. Extending the current Permission in Principle (PiP) to major development: This proposal ties in with the White Paper proposals for land allocated in growth areas for substantial development to automatically benefit from a form of PiP. This would extend the current PiP route to major development (excluding those subject to EIA or habitats assessments).

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