Andrew Dismore

Overview

The Government has published its long-awaited planning white paper, which contains many proposals to radically change the planning system in England. The consultation closes on 29 October 2020.

The Government also proposed some interim changes to the current planning system, regarding assessing housing needs, building “First Homes”, lifting the threshold for small sites and extending current “Permission in Principle” to major development. The consultation closes on 1 October 2020.

What people are saying

The biggest shake-up of planning for decades has caused fury that moves to fast-track the construction of “beautiful” homes across England will “dilute” democratic oversight, choke off affordable housing and lead to the creation of “slum” dwellings.” The Guardian

“Change is a good thing for planning, there’s no doubt about that. But the most important thing about this is that people’s voices are not going to be enhanced. This is not a democratisation of planning. And that is really troubling to us.” Hugh Ellis, TCPA

“They are now proposing a top down reorganisation of the planning system which is going to actually take power away from local councils and local communities and hand them to the Secretary of State and hand them to developers.” Deputy Mayor Tom Copley
“These changes are potentially disastrous for Londoners and could reduce the amount of affordable housing built in the capital.” Cllr Darren Rodwell

Planning For The Future

The document sets out the challenges and perceived obstacles to be overcome, that a new system should reform:

• It is too complex
• Decisions are discretionary rather than rules-based (“Nearly all decisions to grant consent are undertaken on a case-by-case basis, rather than determined by clear rules for what can and cannot be done”), and 36% of major applications are determined at appeal
• Too long to adopt a local plan – on average, 7 years
• Assessments of housing need, viability and environmental impacts are too complex and opaque
• Lost public trust
• Based on outdated technology – overly reliant on documents rather than data
• Process for developer contributions for affordable housing and infrastructure are complex, protracted and unclear
• Not enough focus on or incentive for good design
• Does not lead to enough homes being built.

The proposals have five pillars.

Pillar one: “we will streamline the planning process with more democracy taking place more effectively at the plan making stage, and will replace the entire corpus of plan-making law in England to achieve this”

• Simplifying role of Local Plan to focus on identifying land under three categories:
  • Growth areas suitable for substantial development, outline approval automatically secured for forms and types specified in the Plan
  • Renewal areas for some development, like gentle densification
  • Protected areas where development is restricted – including Greenbelt, AONB, Conservative Areas
• Local Plans to set out clear rules rather than general policies. “We will set out general development management policies nationally”, local plans should just identify sites alongside locally produced design codes. Expectations that Plans will be two-thirds shorter. Neighbourhood Planning to be involved in the production of design guides and codes
• “Radically and profoundly” be more ambitious with breadth and depth of community engagement, “democratise the planning process” with new emphasis on engagement at plan-making stage, but less opportunity at planning application stage.
• Local Plans subject to a single statutory “sustainable development” test, getting rid of existing tests of soundness, assessments and requirements, Duty to Cooperate, that cause delay
• Local Plans should be visual and map-based, digital, supported by standard template
• Authorities and Planning Inspectorate to be bound to statutory timetable of no more than 30 months for key stages of process
• Decision making to be faster and more certain
• Strengthened enforcement and sanctions, so confidence that rules will be upheld
• Comprehensive resources and skills strategy for the planning sector to support implementation of these reforms.

Pillar Two: “we will take a radical, digital-first approach to modernise the planning process. This means moving from a process based on documents to a process driven by data”

• Support councils to use digital tools for civic engagement, easier for people to feed in views via social media and phones
• Insist local plans are standardised, follow digitally consumable rules and base don data, with accessible interactive maps, using software used across public sector
• Standardise and make open and accessible datasets that the planning system relies on
• Work with tech companies and local authorities to improve application and case management software. Combined with clear rules in digital format, should make automation of some parts of application possible.
• Create a PropTech Innovation Council to drive innovation for public policy objectives.

Pillar Three: “a new focus on design and sustainability”

• Ensure planning system supports efforts to combat climate change, using National Planning Policy Framework to target areas where a reformed planning system can “effectively address climate change mitigation and adaptation and facilitate environmental improvements”, and the detailed proposal says, “to mitigate and adapt to climate change and reduce pollution as well as making our towns and cities more liveable through enabling more and better green spaces and tree cover”. The Environment Bill currently before Parliament “will legislate for mandatory net gains for biodiversity as a condition of most new development. And the Local Nature Recovery Strategies which it will also introduce will identify opportunities to secure enhancements through development schemes and contributions”
• Expectation that all new streets are tree-lined
• Facilitate ambitious improvements in energy efficient standards for buildings
• “Ask for beauty”, create “net gain” rather than “no net loss”, greater focus on “placemaking” and “creation of beautiful places”
• Create a fast-track for beauty to make it easier for those who want to built beautifully
• Quicker, simpler framework for assessing environmental impacts
• Expect design guidance and codes to be prepared locally and based on genuine community involvement
• Establish new body to support delivery of design codes in every part of the country, building on Building Better, Building Beautiful
• Ensure everyone council has a chief officer for design and place-making
• Update Homes England’s strategic objective to give greater emphasis to delivering beautiful places
• Protect historic buildings and areas

Pillar Four: “we will improve infrastructure delivery in all parts of the country and ensure developers play their part, through reform of developer contributions”

Alongside this, they have published a report on planning obligations in England in 2018/19, which found that £7 billion was generated through S106, of which £4.9bn was affordable housing contributions.

• CIL and planning obligations to be reformed as a nationally set value-based flat rate charge (either single rate or area-specific rates), aimed to raise more revenue than under current system “and deliver at least as much – if not more – on-site affordable housing as at present”
• This to be charged on the final value of a development, levied at point of occupation, with a minimum threshold to allow smaller/less viable sites to still be developed – and to be the same across all use classes.
• Would allow local authorities to borrow against Infrastructure Levy revenues to “forward fund” infrastructure
• London MCIL and other combined authorities specific CILs could be retained to fund specific strategic infrastructure
• More ambitious for affordable housing secured through planning gain – single Infrastructure Fund to be used how councils decide, rather than split between S106 and CIL
• New ways for on-site delivery of affordable, “which could be made mandatory where an authority has a requirement, capability and wishes to do so. Local authorities would have a means to specify the forms and tenures of the onsite provision, working with a nominated affordable housing provider … rather than the discount being secured through Section 106 planning obligations, it would instead be considered as in-kind delivery of the Infrastructure Levy”
• Give councils greater powers to determine how developer contributions are used, flexibility to use funding for existing and new communities
• Extend scope and remove exemptions from consolidated levy, to capture PDR changes of use for example

Pillar Five: “to ensure more land is available for the homes and development people and communities need, and to support renewal of our town and city centres”

• Nationally-determined, binding housing requirement that local authorities have to deliver through their plan – focused on areas where affordability pressure is highest, factoring in land constraints like Green Belt, to deliver 300,000 homes per year
• Speed up construction where development has been permitted, making use of recommendations to speed-up build out rates
• Consult on options to improve data held about contractual agreements used to control land, to provide better information to communities and promote competition and SMEs.
• Using public land and public investment in development to support renewal and regeneration of town centres, and support SME and self-build sectors.

Next Steps

Subject to the outcome of the consultation, the Government will bring forward legislation and policy changes, primary and secondary. As the proposals allow 30 months for new Local Plans to be in place, they expect these to be in place by the end of the Parliament, which is currently scheduled for May 2024 – 30 months before that would be November 2021.

Commentary

These would be vast changes to the current planning system. Replacing the “entire corpus” of plan-making law, in 18 months, will be some task. It is also hugely centralising, which much greater powers taken by the NPPF and Whitehall.

They are potentially more nuanced than some critics have seen – they are setting out to achieve as much funding for affordable housing through this system as before. We have seen with the Mayor’s 35% threshold that setting a simple target can help you achieve more returns as it provides clarity. The mention that this would be secured on PDR conversions is good in one sense, as they will then contribute to infrastructure and affordable housing, but bad in another in that it foresees PDR continuing to exist despite these other radical reforms.

It is interesting that the document does not at all refer to a combined-authority level of planning – it is not clear where the Mayor or London Plan would fit within these proposals. (It mentions MCIL once, and mentions Metro Mayors once without specifics).

The parts on better use of tech in planning seem good – anyone who has tried to find planning documents online can attest to that, and making all planning data open, and putting it on maps would be much better for scrutiny and public understanding. (it is ironic then that the consultation document put out is a very hard to read, two-page spread pdf, will an email address to send comments to).

The statement that data and information regarding land “options” would be made public is welcome and would improve transparency and increase understanding of land “banking”. Using the NPPF, the planning system in conjunction with the Environment Bill to seek enhancements to green space and climate change mitigation would be very welcome also.

The main concern would be the removal of democratic processes and consultation at the application stage. The thrust of this is clear, that it would be placed in the site allocation and plan making stage, which could then indeed lead to more consistent applications and developments coming forward. But this document does not spell out what this would mean for local planning committees, or Mayoral call-ins, which would clearly have a much reduced role, if any.

Another concern would be the resourcing – while that is given lip-service, local planning departments have faced the biggest cuts of any local government departments since 2010. Their capacity to undergo rapid and radical change would be much limited, particularly in the wake of covid-19. If the Government is expecting all local authorities to be undertaking new local plans under this system from the end of next year, then they will not be of the high-quality, rule setting standards that proponents are suggesting; they will be weak and thin documents that don’t set out the high standards of design envisaged. That said, we know in London, much work has already been done on this front. Many boroughs have individual design guidance and characterisation studies, and the Mayor will be publishing more guidance later this year.

And lastly, an ultimate concern would be that none of this reform will actually get homes built faster or more affordably. More details of what is proposed on build-out rates would be required, because the granting of planning permissions is not necessarily what is slowing down the system: boroughs grant more planning permissions every year than get build, London has nearly 300,000 homes with planning permission that have not been started or finished.

Overall there seems to be a bit of “cakeism” – 300,000 homes a year, but all the existing protections; local plans 2/3 shorter, in 30 months, but with detailed design guides and extensive community consultation; less red tape but higher standards.

Changes to the current planning system

The Standard method for assessing housing need

This policy was first introduced in 2017, and uses a formula (based on house prices and population projections) to give a “standard” need figure for a local authority, which they must plan to meet or suffer penalties.

The Government wants to update it to use more recent demographic data, and meet their overall target of 300,000 homes nationally. They have produced a very complicated new formula, the output of which is a national housing need of 337,000.

These new targets will be phased in over 3 to 12 months after publication of new guidance following this consultation.

Delivery First Homes

The Government wants to set out policy that a minimum of 25% of all affordable housing units secured through s106 are “First Homes” – this will then become part of a reformed Infrastructure Levy too.

First homes are to be sold with a minimum discount of 30%, with local discretion to increase this to 40% or 50% with evidence.

They propose that these replace other affordable home-ownership products as a priority (e.g. so a local authority could still seek 75% social rent on the rest of the affordable part).

There would be some exemptions, such as build to rent. There would also be a “First Homes exception sites policy” for sites brought forward outside the local plan, that the affordable homes delivery should be First Homes for local first-time buyers.

This will be done through the NPPF following the consultation, so no legislation is required, although they may introduce primary legislation to strengthen it, and introduce some reforms to CIL through secondary legsislation.

Supporting SME developers

This is particularly designed to support SME developers in the wake of covid-19. The Government has already allowed local authorities to defer CIL payments to support SMEs where necessary.

These proposals seek to reduce the burden of contributions from SMEs for a longer period. Currently, affordable housing contributions should not be sought on developments of under 10 units – they are proposing that this be raised to 40 or 50, and also increase the site size threshold (currently 0.5 hectares).

If taken forward, this would be done through a Written Ministerial Statement in the Autumn.

Extension of the Permission in Principle consent regime

Permission in Principle was introduced in 2017 as a fast-track to planning permission for residential-led development, with local authorities giving PiP to suitable sites on brownfield land registers – at first, in 2018, for minor development on small sites.

The proposals now suggest this be extended to large sites – while the new planning framework is being developed and implemented – so that substantive development land allocated in local plans have be automatically be granted form of planning permission. The suggested aim is for sites of 10 to 150 homes, or under 5 hectares, which would not have required Environmental Impact or habitats assessments. There would be reforms to the fee structures, publicity required and brownfield registers.

This would be done through amended regulations to come into force at the end of the year.

Comment

The First Homes scheme has been subject to a lot of criticism, as discounted market sale homes are not generally what is most required. These details do allay some worries, and will allow for up to 75% of affordable homes secured through S106 to be for low-cost rent. It will then effectively replace shared ownership in a lot of schemes, while being actually less affordable than shared ownership. In London, the type of households who can buy a market home with a 30% discount are not median earners, and are not the same as those who are buying shared ownership. The Mayor’s Intermediate Housing Consultation will have to respond to these changes.

The SME developers changes may well be necessary given the economic climate, and one of the damaging impacts of the last recession was that so many small builders went to the wall, reducing competitiveness and diversity in the sector. The length of time for this proposal will be key, as exempting sites up to 50 units from any form of affordable contribution will have a significant impact on the delivery of affordable homes.

Absent from either the shorter- or longer-term reforms is a discussion of grant funding, without which it is hard to know the impact. Concerns about delivery of affordable housing through private development would be allayed if the Government matched the Mayor’s affordable housing funding asks. But if the funding levels remain as previously suggested, then it seems inevitable that we will see lower levels of affordable housing delivery for the foreseeable future.