Great Expectations: Pip & The Brownfield Land Registers

“We changed again, and yet again, and it was now too late and too far to go back, and I went on“. (Charles Dickens, Great Expectations)
Permissions in principle will change our planning system significantly, mark my words. In my 11.6.16 blog post  I posed a series of questions arising from the legislative skeleton that is sections 150 and 151 of the Housing and Planning Act 2016. 
Victorian part-work style, we now have had the Housing and Planning Act 2016 (Permission in Principle etc) (Miscellaneous Amendments) (England) Regulations 2017  (made 6 March 2017, in force 27 March 2017), the Town and Country Planning (Brownfield Land Register) Regulations 2017  (made 20 March 2017, in force 16 April 2017) and the Town and Country Planning (Permission in Principle) Order 2017 (made 20 March 2017, 15 April 2017). The statutory instruments don’t yet give effect to all of what sections 150 and 151 enable, but we now have some answers. 
This blog post is not a full summary of how the regime will operate. There are various good summaries but I particularly recommend the Lichfields 27 March 2017 ‘essential guide‘.
A few headlines from the new regime:
1. Local planning authorities will be under a statutory duty to publish their brownfield land registers by 31 December 2017 and then maintain them, reviewing the entries at least annually. 
2. The registers will be in two parts:
– Part 1: previously developed land with an area of at least 0.25 hectares that is suitable and available for residential development and where residential development is achievable (all defined terms)
– Part 2: land in Part 1 where the local planning authority has exercised its discretion to enter the land in Part 2 and has decided to allocate the land for residential development having followed defined publicity, notification and consultation procedures. 

3. The information that must be recorded for each entry is specified and includes

– “the minimum and maximum net number of dwellings, given as a range, which in the authority’s opinion, the land is capable of supporting”

– “where the development includes non-housing development, the scale of any such development and the use to which it is to be put“. 

4. Part 2 will not include sites where the development would require environmental impact assessment. So, if the proposed development falls within Schedule 2 column 1 of the 2011 EIA regulations (for most purposes, more than 150 dwellings or on more than 5 hectares), a negative screening opinion or direction must first be obtained (but remember, indicative screening thresholds as to when significant environmental effects are likely to arise allow for the possibility of projects much larger than 150 dwellings). 

5. There are no statutory rights of appeal if the local planning authority refuses to include land on the register (ECHR article 6 compliant?). Judicial review would, as always with any decision of a public body, be available but the decision to include land on Part 2 is at the local planning authority’s discretion so that would not be easy.  

6. Once land is on Part 2 it has automatic “permission in principle” for five years. In order to be able to carry out the development, application for technical details consent is required, particularising “all matters necessary to enable planning permission to be granted”. The statutory determination period for technical details consent is ten weeks for major development and otherwise five weeks, so deliberately shorter than the equivalent periods in relation to “traditional” non-EIA planning applications (thirteen and eight weeks respectively). A section 106 agreement may be required if the usual tests are met. 

7. There is no defined limit on the extent of non-housing development that can benefit from the procedure, alongside residential development. 

8. The procedure applies to conversion and extension of existing buildings as well as development. 

For a wider overview of where this mechanism is heading, there are also useful references in DCLG Planning Update Newsletter March 2017, from which it is clear that further regulations will follow to (1) allow applications for permission in principle to be made for minor development (ie basically less than ten homes) for sites on part 1 of a brownfield land register and to (2) allow automatic permission in principle to stem from allocation in defined categories of statutory development plans rather than just from designation on a brownfield land register. Guidance is also in the offing (dovetailed with the revised NPPF? We can but hope). 
We also await the Government’s response to its February 2016 technical consultation on implementation of planning changes  chapter 2 (permission in principle) and chapter 3 (brownfield register). It was originally promised to be published alongside the regulations. In the meantime, a number of passages in the consultation document are useful in putting flesh on the bones:

“The result of a grant of permission in principle is that the acceptability of the ‘prescribed particulars’ cannot be re-opened when an application for technical details consent is considered by the local planning authority. Local planning authorities will not have the opportunity to impose any conditions when they grant permission in principle. It will therefore be important for the development granted in principle to be described in sufficient detail, to ensure that the parameters within which subsequent application for technical details consent must come forward is absolutely clear.”

“We expect that the parameters of the technical details that need to be agreed, such as essential infrastructure provision, will have been described at the permission in principle stage and will vary from site to site”

“We are proposing that local planning authorities should use existing evidence within an up to date Strategic Housing Land Availability Assessment as the starting point for identifying suitable sites for local brownfield registers. To support this, we will encourage authorities to consider whether their Assessments are up to date and, if not, to undertake prompt reviews. 


While sites contained within the Strategic Housing Land Availability Assessment are a useful starting point, we will encourage local authorities to ensure they have considered any other relevant sources if these are not included in their Assessments. This could include sites with extant planning permission and sites known to the authority that have not previously been considered (for example public sector land). 


We will also expect authorities to use the existing call for sites process to ask members of the public and other interested parties to volunteer potentially suitable sites for inclusion in their registers. We propose that this would be a short targeted exercise aimed at as wide an audience as is practicable. That will enable windfall sites to be put forward by developers and others for consideration by the authority. 

Authorities that have recently undertaken a full Strategic Housing Land Availability Assessment may not consider this to be necessary when initially compiling a register. However, in areas without up to date evidence and for all authorities completing subsequent annual reviews of their register, the process of volunteering potentially suitable sites will play an important role in refreshing the evidence base and help ensure all suitable sites, including windfall sites, are included.”

“We intend to introduce measures that will apply where additional action is needed to ensure that sufficient progress is being made. These measures could include a policy based incentive which would mean that local planning authorities that had failed to make sufficient progress against the brownfield objective would be unable to claim the existence of an up-to-date five year housing land supply when considering applications for brownfield development, and therefore the presumption in favour of sustainable development would apply.

“We propose that the measures we adopt would take effect fully from 2020, and would apply to any local planning authority that had not met the 90% commitment by that date. However, in light of the need for local planning authorities to make continuous progress towards the 90% commitment, we are also interested in views on any intermediate objectives and actions that might apply. “

Be in no doubt, eventually we will have a mechanism that:

– imposes hard statutory deadlines on authorities to publish and regularly update their registers
– whilst light on statutory recourses for developers whose land is not included, will be focused on by Government – woe betide authorities that do not play ball

– will in many cases provide a quicker route to development than the familiar allocation, outline permission, reserved matters approach

– will be potentially relevant for establishing the development credentials of a site even if in due course a traditional planning application is intended

If you have residential development or conversion in mind, the first step is to seek to ensure that your property is on Part 1 of the first round of brownfield land registers, to be published by 31 December 2017. Within the 73 authority pilot areas  this process is well underway. Although care is needed to secure reference to an appropriate scale of development, that’s a pretty immediate way to secure acceptance that your site is suitable for residential development!

Simon Ricketts 1.4.17
Personal views, et cetera

Definitely Maybe: Defining Affordable Housing

Affordable housing is defined in the NPPF as follows:
The Government carried out a consultation  in December 2015, proposing that the definition be expanded so as to include

– low cost ownership models, which “would include products that are analogous to low cost market housing or intermediate rent, such as discount market sales or innovative rent to buy housing”
– starter homes (of which more later). 

Two further changes were proposed in the February 2017 response to consultation:  
* introduction of a household income eligibility cap of £80,000 (£90,000 for London) on starter homes. 

* introduction of affordable private rented housing

The Government is accordingly consulting until 2 May 2017 on the following replacement definition for the NPPF (long isn’t it?):


Starter homes

There were howls of anguish at the starter homes initiative as first unveiled by the Government, the key elements of which were (as set out in chapter 1 of the Housing and Planning Act 2016 and March 2016 technical consultation):
– a legal requirement that 20% of new homes in developments should be starter homes, ie
– to be sold at a discount of at least 20% to open market value to first time buyers aged under 40. 

– Price cap of £250,000 (£450,000 in London)

– The restriction should last for a defined number of years, the first suggestion being five years, replaced with the concept of a tapered restriction to potentially eight years

– Commuted sums in lieu of on site provision for specified categories of development, eg build to rent

The obvious consequence would have been a significant reduction in the potential for schemes to include a meaningful proportion of traditional forms of affordable housing. 
After all of last year’s battles over the Bill, it is now plain from the Government’s response to the technical consultation, that the starter home concept is now much watered down:
– There will be no statutory requirement on local planning authorities to secure starter homes, just a policy requirement in the NPPF, which is to be amended accordingly. 

– Rather than requiring that 20% of new homes be starter homes, the requirement will be that 10% of new homes will be “affordable housing home ownership products” so could include shared equity or indeed low cost home ownership. 

– maximum eligible household income of £80,000 a year or less (or £90,000 a year or less in Greater London 

– 15 year restriction

– No cash buyers, evidence of mortgage of at least 25% loan to value

– It will only be applicable to schemes of ten units or more (or on sites of more than 0.5h). 

There will be a transitional period of 18 months (to August 2018) rather than the initially intended 6 to 12 months. 
Whilst we now have a more workable arrangement, plainly all that Parliamentary work was a complete waste of time. There was no need for chapter 1 of the 2016 Act – the current proposals can be delivered without any need for legislation. 
We will need to see the degree to which LPAs embrace the starter homes concept in reviewing their local plans. We will also need to be wary that we may lose the only benefit of a national standardised approach, ie the hope that there might be a standard set of section 106 clauses defining the operation of the mechanism (which will not be straightforward – see my 21.6.16 blog post Valuing Starter Homes). 
Affordable Private Rent
One of the documents accompanying the Housing White Paper was a consultation paper: Planning and affordable housing for build to rent.
The term Affordable Private Rent is now used for what we have all previously been calling Discounted Market Rent. Changes to the NPPF are proposed (subject to consultation) advising LPAs to consider asking for Affordable Private Rent in place of other forms of affordable housing in Build to Rent schemes, comprising a minimum of 20% of the homes in the development, at a minimum of 20% discount to local market rent (excluding use of comparables within the scheme itself), provided in perpetuity. The Affordable Private Rent housing would be tenure blind and representative of the development in terms of numbers of bedrooms. Eligible income bands are to be negotiated between developer and LPA. Developers will be able to offer alternative approaches where appropriate (eg greater discount, fewer discounted homes – or different tenures). “Build to Rent” will be defined and it is acknowledged that developers should be able to cease to operate the property as Build To Rent subject to payment of a commuted sum reflecting the affordable housing requirement that would otherwise have been applicable. 
There is also recognition in the consultation paper that factors in London may be different, allowing for an amended response and recognition of Mayor of London’s November 2016 affordable housing and viability draft SPG.
There will be a transitional period of 6 months from the time that the NPPF changes are made. The possibility is held out of model section 106 clauses, which would help minimise unnecessary delays. 

The recognition that Build to Rent is a model that doesn’t sit well with ‘ownership’ forms of affordable housing is what that industry (largely self-defining through scale of scheme and extent of professional management) has been lobbying for. Nor is there any more any reference to off-site starter home provision.
Wider implications
The extensions to the meaning of ‘affordable housing’ are all in the direction of private sector provision. The definition is now very wide indeed. Battles lie ahead once LPAs consider the implications of the changes for their local plan affordable housing requirements against a backdrop of, for example:
– reduced levels of socially rented housing over the last six years or so following the introduction of affordable rent (minimum discount of at least 20% to market rent), vividly demonstrated in the Government’s affordable housing statistics published on 2 March 2017:

– restrictions on housing benefit, for instance ineligibility of 18-21 year olds from 1 April 2017 under the Universal Credit (Housing Costs Element for claimants aged 18 to 21) (Amendment) Regulations 2017  made on 2 March 2017. 
– the continuing, onerous, requirement on registered providers since 2015 to reduce rents by 1% a year for four years resulting in a 12% reduction in average rents by 2020-21. 
– Loss of stock via the Housing and Planning Act 2016’s voluntary right to buy scheme in relation to registered providers and the Act’s provisions requiring local authorities to sell vacant higher value housing (the Government’s most recent statistics on sales date from October 2016 but already show significant numbers). 
A debate took place in the House of Lords this week, on 2 March 2017, on the Economic Affairs Committee’s July 2016 report, Building More Homes  in the context of the Housing White Paper. Lord Young closed for the Government saying many of the right things but, after such a background of continuing changes (I believe it was Adam Challis at JLL who recently counted 180 housing initiatives since 2010), with further uncertainty for at least 18 months, surely we now just need to get on with the matter in hand – ensuring that there are enough homes to meet all social needs, whilst not killing the golden goose without which this will simply not happen under any foreseeable system, ie profitable development by the private sector.
Simon Ricketts 4.3.17
Personal views, et cetera

From The White Paper Mountain, What Do We See?

After so long we have reached the top of the mountain: the white paper and accompanying documents have all been published today, 7 February 2017. However, now we see a series of further peaks on the horizon. 
A good way into the white paper itself, Fixing Our Broken Housing Market, is to start at the back end. From page 72 you have the detailed proposals listed, including a series of proposed changes to the NPPF and other policies which are now the subject of a consultation process from today until 2 May 2017. The consultation focuses on a series of 38 questions but some of the questions are potentially very wide-ranging. Further consultation is proposed on various matters, including 
– housing requirements of older people and the disabled

– Increasing local authorities’ flexibility to dispose of land at less than best consideration and related powers

– Potentially increasing fees for planning appeals (up to a maximum of £2,000 for the largest schemes, recoverable if the appeal is allowed)

– Changes to section 106 processes (with further consideration being given to dispute resolution “in the context of longer term reform”)

– Requiring housebuilders to provide aggregate information on build-out rates and, for large-scale sites, as to the relevance of the applicant’s track record of delivering similar schemes

– Encouragement of use of CPO powers to support the build out of stalled sites. 

There is a supplementary consultation paper on planning and affordable housing for build to rent  containing a further 26 questions, with a consultation deadline of 1 May 2017.
There are responses to previous consultation papers and reports:
– Summary of responses to the technical consultation on implementation of planning changes, consultation on upward extensions and Rural Planning Review Call for Evidence  (including a u-turn on the previous idea of an upwards extensions permitted development right in London, now to be addressed by policy). 
– Government response to the Communities and Local Government Select Committee inquiry into the report of the Local Plans Expert Group 
There is plenty to get to grips with, for example:
– the housing delivery test and new methodology for assessing objectively assessed need

– an understandable focus on whether the applicant will proceed to build out any permission and at what rate, although with a worrying reduction of the default time limit for permissions from three to two years

– Homes and Communities Agency to become “Homes England”. 

It is also reassuring to see the Government applying real focus to build to rent, reducing its emphasis on starter homes – and also reducing its reliance on permitted development rights. 

However, it is surprising how much still remains unresolved. We will apparently have a revised NPPF “later this year” but for much else the start date looks to be April 2018, for example a widened affordable housing definition including watered-down starter homes proposals (no longer a statutory requirement and with reference to a policy target of a minimum of 10% “affordable housing ownership units” rather than the requirement of 20% starter homes previously proposed) and a new methodology for assessing five year housing land supply. 

Liz Peace’s CIL review team’s review of CIL: “A new approach to developer contributions”  (October 2016 but only now published) remains untackled. The Government’s response will be announced at the time of the Autumn Budget 2017. 

Decision-makers will need to grapple very quickly with the question as to the weight they should give to the white paper as a material consideration, given the Government’s clear policy direction now on a range of issues. 


Simon Ricketts, 7.2.17
Personal views, et cetera

Devo West Mids

Connecting the dots as to the Government’s policy announcements is never easy for all of us on the outside, trying to work out what they may turn out to mean in practice. 
An evidence session today with the West Midlands Land Commission was a good excuse for me to get to grips, belatedly, with what changes devolution may bring to planning and compulsory purchase in the West Midlands. 


Background

The West Midlands Combined Authority  was formally established on 16 June 2016 by virtue of the West Midlands Combined Authority Order 2016 . It comprises 17 local authorities and three LEPs and follows a devolution agreement dated 17 November 2015  .

The WMCA is to be chaired by a directly elected Mayor. The election is due to take place on 4 May 2017. Andy Street is to step down from his job as John Lewis chief executive to stand, as the Conservative candidate. Sion Simon is the Labour candidate. 
The devolution agreement includes the following statements in relation to planning:
“Planning powers will be conferred on the Mayor, to drive housing delivery and improvements in housing stock, and give the same competencies as the HCA.

“The Combined Authority and its constituent authorities will support an ambitious target for the increase in new homes, and will report annually on progress against this target. To ensure delivery of this commitment, the Shadow Board of the Combined Authority and the government agree that: 


    * Existing Local Authority functions, which include compulsory purchase powers, will be conferred concurrently on the Combined Authority to be exercised by the Mayor. These powers, which provide the same competencies as the Home and Community Agency, will enable the Combined Authority to deliver its housing and economic growth strategies. The government will bring forward further proposals for consultation in the New Year and will, as part of that consultation, discuss how they can be applied to support housing, regeneration and growth. 


    * The Homes and Communities Agency and the Combined Authority will work together to develop a joint approach to strategic plans for housing and growth proposals for the area. 


    * The government will work with the Combined Authority to support the West Midlands Land Commission. The West Midlands Land Commission will ensure there is a sufficient, balanced supply of readily available sites for commercial and residential development to meet the demands of a growing West Midlands economy. It will create a comprehensive database of available public and private sector land, identify barriers to its disposal/development, and develop solutions to address those barriers to help the West Midlands meet its goal to deliver a significant number of additional new homes over the next 10 years, and to unlock more land for employment use. The Combined Authority will also be able to use their proposed Land Remediation Fund to support bringing brownfield sites back into use for employment and housing provision”. 

WMCA’s ambitious objectives are set out in its Strategic Economic Plan  and include a “higher level of housebuilding than is currently provided for in development plans”. 
A Scheme for the Mayoral West Midlands Combined Authority was published on 4 July 2016 for a consultation period which closed on 21 August 2016. It seeks equivalent powers to establish mayoral development corporations, with the agreement of the relevant LPAs, as the London Mayor currently has. It also seeks, for its area, the same planning and compulsory purchase powers as the Homes and Communities Agency. 
The West Midlands Land Commission has also been set up, with terms of reference  to consider “what measures could be initiated and undertaken to ensure an improved supply of developable land from both a strategic and regional perspective”. 
WMCA has begun to work on specific strategic sites. It published on 19 October 2016 its Greater Ickneild and Smethwick housing growth prospectus. An application for housing zone status is to be made. (Although – is it just me? – the Government’s housing zones announcement 5 January 2016  is very vague as to the implications of HZ status other than the potential for an element of Government funding). 
Implications
What sort of planning powers WMCA will have to encourage, cajole and coordinate the work of its member authorities? Increased housing numbers will not come without real interventions and a new approach by all involved – in which I very much include the Government. After all:
– the Birmingham City Plan is still on hold following the previous Secretary of State’s 26 May 2016 holding direction as a result of concerns expressed by Sutton Coldfield MP Andrew Mitchell as to the proposed release from the green belt of land for the development of 6,000 homes

– we are still waiting for numerous measures to be fleshed out pursuant to the Housing and Planning Act 2016, including permission in principle and also the enticing mystery that is the concept in section 154 of “planning freedoms schemes”

– there is still no sign of the amended NPPF with its stronger policy support for development on brownfield sites. 

Will the WMCA be given CPO powers equivalent to the very wide powers that the HCA has by virtue of section 9 of the Housing and Regeneration Act 2008, or will it at least have a working arrangement with the HCA whereby the HCA will use its powers at the authority’s request? The section 9 power is much wider than LPAs’ normal “planning purposes” CPO power in section 226 of the Town and Country Planning Act 1990 as it can be used to achieve the HCA’s broader objectives as set out in section 2 of the 2008 Act:
“(a) to improve the supply and quality of housing in England, 

(b) to secure the regeneration or development of land or infrastructure in England, 


(c)  to support in other ways the creation, regeneration or development of communities in England or their continued well-being, and 


(d)  to contribute to the achievement of sustainable development and good design in England”

The use, or threat of use, of section 9 as against suitable sites which are not brought forward for development by their owners, might well be effective – particularly when taken with acquiring authorities’ possibly improved position against owners’ “no scheme world” compensation arguments by virtue of clause 22 of the Neighbourhood Planning Bill. 
Interesting also to see the London-style “Mayoral development corporations” proposal in the July Scheme document. But what about possibly developing other London-style structures, including the referral to and potential call-in by the Mayor of applications for strategic schemes?
So many unfinished legislative changes and policy announcements. As E. M. Forster (who died in Coventry – sole tenuous thematic link to blog) might have said: 
only connect
Simon Ricketts 24.10.16
Personal views, et cetera

Building Homes By CPO

This blog post supplements a 27 October 2016 Planning Futures event  hosted by City University on the role of compulsory purchase in solving the planning crisis.
Any discussion like this needs to be in the context of wider legislative and policy initiatives in relation to the operation of the planning system, of seeking to ensure that development is viable and of the role of the public sector in delivery. There is a risk that it is treated by professionals in a silo as a specialist discipline, rather than as an inherent part of the planning system.
Compulsory purchase is not to be considered lightly. But it shouldn’t be written off as a potential tool in the right circumstances. 
LPAs commonly have various concerns over use of theIr CPO powers – that the process
– is time intensive

– is costly

– can be politically sensitive

– needs specialist experience

– gives rise to compensation liabilities

– should be a last resort. 

Much of this true. However the power in section 226 of the Town and Country Planning Act 1990 is there to be used and there is detailed, relatively up to date (2015), guidance. Whilst the procedure is still not simple (it never will be), substantial improvements are being made to the legislative basis. 
Without the threat of CPO, will some, otherwise suitable, sites come forward? Allocation is not always enough to secure development. Indeed, radical thought: should permission in principle under the Housing and Planning Act 2016 in some circumstances come with the threat of CPO if development doesn’t proceed without good reason? The threat could be made clear by the LPA when placing land on its brownfield land register or in any other allocation intended to lead to permission in principle. 
Compulsory purchase is a tried and tested process with city and town centre retail-led schemes, where there is familiarity with the steps and approach to be taken by LPA hand in hand with its developer partner, with the developer partner meeting costs and compensation liabilities by way of an indemnity agreement. Properly drafted, such agreements can avoid difficulties in relation to the duty to secure best consideration in section 123 of the Local Government Act 1972 (Standard Commercial Property Securities Limited v Glasgow City Council  House of Lords, 16 November 2006) or in relation to public procurement (see my previous Section 123…Go!  blog post for more). 
Nationally Significant Infrastructure projects of course have the benefit of the bespoke DCO process under the Planning Act 2008, under which compulsory powers are routinely secured. 
In contrast, CPOs are not so common for housing-led schemes but there is no fundamental reason why this is so. 
Recent and forthcoming improvements to the compulsory purchase system include:
– Those in the Housing and Planning Act 2016  (eg wider powers to enter and survey land and tightening timescales, including timescales for securing advance payments of compensation)

– The imminent freedom under section 160 of the 2016 Act for NSIPs to include related housing on the same infrastructure development site or close to it, with a 500 homes cap having been consulted upon in October 2015.

– Those in the Neighbourhood Planning Bill  (eg facilitating temporary possession of land, codifying and limiting the no scheme world principle and enabling GLA/TfL acquisition of land for joint purposes – no doubt to be relied upon so as to maximise the potential for housing development unlocked by Crossrail 2 when the Hybrid Bill for that scheme comes forward). 

The Act and Bill were both preceded by detailed consultation papers, in March 2015  and March 2016  respectively. 
The changes are for a reason – because the Government wishes to see the powers used!
I assume that there is also appetite from private sector developers willing to partner with LPAs through the process, where significant sites can be unlocked as a result. 
Other bodies of course have CPO powers that can be used to bring about more homes, for instance the Homes and Communities Agency’s wide powers in section 9 of the Housing and Regeneration Act 2008, as well as the Mayor of London and his Mayoral Development Corporations. There is also the intriguing power in clause 48(1) of the HS2 Bill  :
“If the Secretary of State considers, having regard to the relevant development
plan, that the construction or operation of Phase One of High Speed 2 gives rise
 to the opportunity for regeneration or development of any land, the Secretary 5 of State may acquire the land compulsorily”
Obviously there are still pitfalls in the CPO process. I referred to some of them in a recent blog post, Regeneration X: Failed CPOs  since when we have had the Seaton Carew decision letter  dated 13 October 2016 , where the Secretary of State rejected a CPO on the ground that a planning permission (for a community and leisure based project) not rooted in planning policy was not a sufficient basis for use of section 226. Whilst there will always need to be a compelling case in the public interest to justify compulsory purchase, are the Aylesbury Estate and Seaton Carew instances of where the tests are being applied too strictly, or perhaps even an indication that the legislation and guidance should be reviewed again to assess whether the bar is in fact set too high?
More generally, shouldn’t more encouragement (and funding) be given by Government for the use of compulsory purchase to deliver housing sites, whether this is either by way of 
– LPAs either acting for themselves where they have access to funding, or backed by private sector developer partners, to deliver specific schemes or 

– the HCA and other bodies with regeneration CPO powers looking to assemble sites and bring them to market?

Although it seems not to be a popular idea with Government so far, let’s also not forget the potential for expanding by legislation the scope of the DCO process to encompass the very largest urban extension and new settlement proposals. 

Simon Ricketts 28.10.16
Personal views, et cetera

(Rights Of) Light Relief: Section 203

Section 237 must be one of the best known sections of the Town and Country Planning Act 1990, beloved of planning lawyers – as for once we can be useful to our property colleagues.
Section 237 of course ensures, after an appropriate amount of detailed lawyering, that development can proceed without risk of injunctions from those whose easements (eg rights of light) or other rights (eg the benefit of restrictive covenants) may be affected. Where a local planning authority acquires an interest in land for planning purposes, or, where it already holds the interest, “appropriates” it for those purposes, interference with those interests or rights gives rise only to compensation rather than any risk of an injunction.

Although perhaps no surprise given the fact that the procedure is more than 50 years old, dating back to at least the Town and Country Planning Act 1962, it is very light in terms of process. Despite its effect being the removal of third parties’ private law entitlement to injunct against infringement of their rights, there is:

– no express requirement to consult with or even notify those potentially affected

– no statutory register to check where it has been used (see eg the ICO’s decision following a refusal in 2015 by Westminster City Council to provide information as to the occasions in which it had used section 237)

– no right on the part of those affected to object or have their grievances considered by an independent body, even though, because compensation is assessed on the basis of dimunition of value of their interest as a result of the interference (which will usually be less than the level of damages or settlement payout they could have secured in lieu of an injunction) the financial implications can be significant.

The power is useful in conjunction with use of an authority’s compulsory purchase powers, to ensure that, once land for development has been compulsorily acquired, problems will not arise through third party rights over the land acquired. However, nowadays the power is often used by authorities who are not looking to acquire land in their own right but rather looking to de-risk a development, hand in hand with a developer’s negotiations with those whose rights of light and other rights and easements may be affected – the approach of the courts to rights of light infringements still being difficult to predict (eg recently the Court of Appeal in Ottercroft Limited v Scandia Care Limited and Rahimian). The authority will proceed on the basis of an agreement by the developer to underwrite the authority’s compensation liability and (where the authority does not already have a legal interest in the development site) arrangements for the authority to acquire a freehold or leasehold interest in the development site – usually for a limited period of time and structured to minimise unnecessary risks and SDLT liability, prior to the interference occurs. 

Most recently the Corporation of London’s April 2016 decision to use the power to assist the development of 22 Bishopsgate attracted much publicity, possibly due to the nature of the scheme, which will become the City’s tallest building, rather than anything unusual about the use of section 237. 


Since 13 July 2016 the section 237 mechanism has been replaced by the similar (but slightly different!) power in Section 203 of the Housing and Planning Act 2016. 

The main changes between section 237 and section 203 are that:

• section 203 can be utilised not just by local planning authorities but other bodies with compulsory purchase powers, including statutory undertakers;

• in order to rely on the power, the authority must show that it “could acquire the land compulsorily” for the purposes of carrying out the development;

• there is an express exclusion in relation to easements or rights enjoyed by the National Trust;

• the new section expressly limits the power to situations where the development that creates the interference is related to the purposes for which the land was acquired or appropriated (a gloss upon section 237 that had been established by Midtown Limited v City of London Real Property Company Limited ). 

It is odd that once the decision was taken to update the section 237 procedure, more was not done to resolve the uncertainties that surround its operation, particularly given that by definition its use is usually contentious, being designed to affect the relative negotiating strength of potential litigants. The uncertainties are well described in a 2011 paper by Neil Cameron QC. 

The “could the authority acquire the land compulsorily?” test in section 203 is bound to lead to litigation. It was an open question under section 237 as to whether, before using acquiring or appropriating, the authority had to meet the same public need tests as would need to be satisfied were it to compulsorily acquire the land and as to whether consultation and negotiation was first required with those whose rights were to be affected. The main judicial authority for that position is a first instance ruling by McCullough J in R v Leeds City Council ex p Leeds Industrial Co-operative Society Limited, 1997. That, and the enactment of the Human Rights Act 1998, has led to additional caution as to the steps to be taken before invoking the procedure, including:

– identifying those likely to be affected

– seeking to resolve matters by negotiation, potentially on the basis of a more open discussion that one based solely on diminution in value as the basis of any settlement

– consideration by the authority of whether there is a compelling case in the public interest for use of the power and whether the tests in section 226 (compulsory purchase of land for planning purposes) are made out

– ensuring that there is the authority gives reasonable publicity to its decision to rely on the power (so as reduce the risk of a claim for judicial review of the decision being allowed out of time). 

Care is also needed in determining the structure for granting the authority an appropriate interest, so as to ensure that there can be no complaint about state aid or disposal of land at an undervalue (when the authority is called upon to relinquish its interest). 

The gnomic drafting of section 203 will continue the debate as to just how much needs to be done in order for the procedure to be legally effective. 

Simon Ricketts 26.8.16

Personal views, et cetera

Section 106 Disagreements

If CIL is to beat a retreat in relation to major developments as rumoured (June 2016 blog post  – although we’ll now need to wait for Parliament to resume in the Autumn before we learn any more of the CIL working group’s thinking) it’s more important than ever that the section 106 process works as well as it can. Used well, it is a powerful and effective mechanism and there is no need at all for negotiations to become protracted.
Unfortunately the Government continues to snatch at the issues. Section 106 agreements come in all shapes and sizes, from the simplest agreement to secure a specific contribution tocomplex agreements in connection with urban extensions and large mixed use projects, amounting to public/private sector agreements to govern the delivery, over decades hand in hand with development phases, of many hundreds of millions of pounds of social and physical infrastructure – and where issues such as the appropriate ring-fencing of obligations to appropriate parts of the site, enforcement protocols, reasonable future-proofing, interaction with CIL, viability review mechanisms and long-term maintenance arrangements can come to the fore in a variety of permutations.  
Legislative changes

Regulations 122 and 123 of the CIL Regulations 2010 have set trip hazards for LPAs and developers: section 106 agreements that do not comply with those regulations which are relied upon by LPAs in granting planning permission render the LPA’s decision liable to judicial review by third parties. 

Regulation 122 placed in statutory form the previous policy test that a planning obligation must be necessary to make the development acceptable in planning terms, directly related to the development and fairly and reasonably related in scale and kind to the development. Examples of Regulation 122 leading to permissions being quashed include Borough of Telford and Wrekin v Secretary of State  (Court of Appeal, 2 April 2014), Oxfordshire County Council v Secretary of State  (Lang J, 3 February 2015 – monitoring obligations) and R (Mid-Counties Co-operative Limited v Forest of Dean DC  (Singh J, 6 April 2015). 

Regulation 123(2) bites against planning obligations in relation to the funding or provision of infrastructure on the LPA’s Regulation 123 list. Regulation 123(3) introduced the “pooling” restriction, where five or more planning obligations have been entered into within an LPA’s area since 6 April 2010 that provide for contributions to the same infrastructure project or type of infrastructure.

It is often difficult to get to the bottom of whether these restrictions would be, or have been, breached as well as how “infrastructure project” or “type of infrastructure” is to be interpreted. It is difficult enough negotiating a satisfactory mechanism to overcome legitimate planning concerns without having to guard against the risk of a judicial review based on alleged non-compliance with these broadly stated requirements. 

These are not the only trip hazards of course – for example there is the often-overlooked requirement in Article 40(3)(b) of the Development Management Procedure Order 2015 for the LPA to put “proposed” planning obligations on the planning register (although not every travelling draft amounts to a planning obligation that is “proposed” eg see R (Police and Crime Commissioner for Leicestershire) v Blaby District Council  (Foskett J, 27 May 2014)). 

Further constraints are still to come, via section 5 of the Housing and Planning Act 2016 (the “starter homes requirement” to be delivered in a specified form by way of section 106 agreement) and via section 159 (which enables the Secretary of State to render unenforceable specified planning obligations in relation to affordable housing). Following the Government’s victory in Secretary of State v West Berkshire Council  (Court of Appeal, 11 May 2016) the Planning Practice Guidance now again has the exemption introduced in 2014 for developments of 10 units or fewer and developments with less than 1,000 square metres of floor space from the requirement to contribute towards affordable housing.

We also now have (albeit awaiting draft regulations) the dispute resolution mechanism introduced by section 158 and Schedule 13 of the Housing and Planning Act 2016. 

The explanatory notes to the Act explain the mechanism as follows:

Appointment of a person to help resolve disputes

This Schedule requires the Secretary of State to appoint someone to resolve issues that are holding up the completion of planning obligations. 

The duty to make an appointment arises where certain conditions are met. There must be an existing planning application. The local planning authority must be likely to grant planning permission if satisfactory planning obligations are entered into. There must usually be a request from the local planning authority or from the applicant. 

The Secretary of State can also make regulations setting out:

who, other than the local planning authority and applicant, could make a request for the appointment of a person;

the timing and form of requests;

that a person can be appointed if outstanding issues have not been resolved within set timeframes (regardless of whether there is a request); 

further detail about appointments, including about when a request cannot be made and about when a request could be refused; 

what qualifications or experience the appointed person must have; and

any fees payable.

There are temporary restrictions on the steps that can be taken in relation to the application until the dispute resolution process concludes.

The appointed person 

The local planning authority and the applicant must co-operate with the appointed person and comply with any reasonable requests. Regulations can also enable the appointed person to award costs if one of those parties fails to comply or behaves unreasonably.

The appointed person must produce a report that sets out:

the unresolved issues and the steps taken to resolve them; and

the terms agreed, or where the terms have not been agreed, recommendations as to what terms would be appropriate.

The appointed person must take into account any template or model terms published by the Secretary of State. Regulations can also set out other details about what the appointed person must and must not take account of.

The local planning authority must publish the report in line with any requirements set out in regulations. Regulations may also provide a process for making revisions to a report.

An appointed person may be appointed to consider two or more planning applications at the same time if the same or similar issues arise under them. In such circumstances a single report may be produced.

After the appointed person’s report

After the appointed person issues a report, a local planning authority must comply with the obligations in this Schedule.

Where planning obligations are entered into in line with the report, then the local planning authority must not refuse permission for reasons relating to the appropriateness of the planning obligations.

The parties may agree different terms, but they will only have a limited period to do so, which will be set out in regulations.

Where no obligations are entered into within a set period, the application must be refused. This is to ensure that the matters come to a conclusion quickly.

Regulations can also set out restrictions on the local planning authority’s ability to ask for additional obligations at this time. Any such restrictions would be designed to ensure that the report is given proper effect by the local planning authority. Regulations can also set out:

periods for determining planning applications after a report is issued; 

circumstances or cases where the consequences in this Schedule don’t apply; and

any further steps required to be taken by the appointed person, the local planning authority or the applicant in connection with the report. 

Where an appeal is lodged, the person determining the appeal must have regard to the report but is not bound by it.”

Will this complicated process be much used or lead to quicker, better, negotiations? My reading of a number of the responses to its February 2015 technical consultation  was that it had less than whole-hearted support from even the private sector. You may remember that due to the impending General Election we then had the Government’s response  in record time the following month, with its proposed way forward in section 4.

In reality, an impasse in section 106 agreement negotiations is rarely down to one defined issue capable of resolution but can relate to a whole host of inter-linking factors, potentially involving parties beyond the LPA and applicant for example other authorities (county and district not seeing eye to eye on “county” issues is a growing concern), land owners and/or funders. 

Other legislative changes come and go, for example the time-limited section 106BA ability (until 30 April 2016) to apply to amend affordable housing provisions in section 106 agreements where necessary to render development viable, introduced in the Growth and Infrastructure Act 2013, announced in the Government’s 2015 Autumn Statement as to be extended and then abruptly left to expire.

Policy changes

The NPPF has only brief references to the section 106 agreement process (with nothing on timescales for their completion):

“203. Local planning authorities should consider whether otherwise unacceptable development could be made acceptable through the use of conditions or planning obligations. Planning obligations should only be used where it is not possible to address unacceptable impacts through a planning condition.

204. Planning obligations should only be sought where they meet all of the following tests:

● necessary to make the development acceptable in planning terms;

● directly related to the development; and

● fairly and reasonably related in scale and kind to the development.

205. Where obligations are being sought or revised, local planning authorities should take account of changes in market conditions over time and, wherever appropriate, be sufficiently flexible to prevent planned development being stalled. “
At the same time as the March 2015 Government technical consultation response we had a very minor beefing up of the planning obligations section of the Planning Practice Guidance  :

“When should discussions on planning obligations take place?

“Discussions about planning obligations should take place as early as possible in the planning process, including at the pre-application stage. This will prevent delays in finalising those planning applications which are granted subject to the completion of planning obligation agreements.

Can planning obligations or heads of terms be on a local list? [answer: information about proposed planning obligations should not normally be made a validation requirement].

Local planning authorities are encouraged to inform and involve all parties with an interest in the land and relevant infrastructure providers, including county councils where appropriate, at an early stage to prevent delays to the process.”

Practical steps

An updated version of the Law Society’s model form of section 106 agreement, endorsed by DCLG (but openly consulted upon first please) would be helpful. The current version dates from June 2010 (predating all of the law and policy referred to in this blog post!). LPAs and developers alike could be advised more strongly that its terms should not be departed from without good reason – there is still far too much reinventing of the wheel and inconsistency of approach between LPAs and indeed between individual lawyers. The reference to a template or model terms in the passage above is encouraging. We need to move away from a bespoke tailored approach towards the “off the peg” department wherever we can…
Particular complexities arise in relation to negotiating viability review mechanisms. Again greater standardisation (which first needs greater standardisation of the approach taken by valuers to viability appraisal for section 106 purposes) would reduce a huge amount of detailed drafting and negotiation. 

There can be a bottleneck when it comes to the LPA’s internal legal and other officer resources, often despite the fact that the applicant is willing to pay for the LPA to outsource its legal work (not that outsourcing is in any way a universal panacea and on a complicated scheme a range of officer input is required). Proper discussions on the section 106 agreement still usually start far too late, with the difficult issues not grappled with until the lawyers have been instructed and start probing as to what the heads of terms actually mean…

The Local Government Ombudsman could usefully take a less hands-off approach than at present to complaints about undue delay. Its present stance (illustrated by this September 2014 ruling )  appears to be that the applicant’s remedy is simply to appeal to the Planning Inspectorate on the basis of non-determination of the application within the statutory period. 

Most usefully however, we could all re-double our efforts to ensure that we only include within section 106 agreements that which is absolutely necessary. If something can be addressed by planning condition, use a condition! 

Simon Ricketts, 20.8.16

Personal views, et cetera