Out-Law Analysis | 17 Jul 2020 | 7:52 am | 4 min. read
The thresholds for 'nationally significant infrastructure projects' (NSIPs) are set out in the Planning Act 2008, generally by reference to size and scale. They apply to projects in the fields of energy, transport, water and waste. However, the Act also provides a mechanism for projects which don't meet those thresholds to be classed as 'nationally significant' by a direction given by the Secretary of State. This is known as a 'section 35 direction'.
With the government contemplating wide-ranging reforms to the planning system and given the 'Project Speed' emphasis, the section 35 process is an existing mechanism which could play an important role in supporting the delivery of new infrastructure.
The process has been relatively underused, partly because of the difficulties which smaller projects have in claiming 'national significance'. However, the coronavirus crisis may have changed this.
The government's recent announcements have made clear the vital role that infrastructure will play in supporting the UK's economic recovery and the ambition to 'build back better, greener, faster', and level up the English regions. Against this background, there is now greater scope for projects which fall below the NSIPs thresholds to claim 'national significance' and benefit from the development consent order (DCO) planning process.
The process for obtaining a section 35 direction is quick and simple. The promoter submits a request to the Secretary of State who then has 28 days to decide whether the project is 'nationally significant'. The time limit can be extended if the Secretary of State requests more information.
Section 35 directions have been given for a range of transport and energy projects including the Silvertown Tunnel, Norwich Northern Distributor Road, Lake Lothing Third Crossing, Great Yarmouth Third River Crossing, and the Aquind and Nautilus interconnectors.
A section 35 direction enables a project to take advantage of the benefits of the DCO process under the Planning Act 2008. The process will not be suitable for all projects. It is intensive and requires considerable resources. However, for some projects, the DCO process offers significant advantages:
There is currently no guidance on what factors are likely to lead to the Secretary of State deciding that a project is 'nationally significant'. However, the 2013 policy statement for business and commercial NSIPs can usefully be applied to projects that might be contemplating a section 35 request, particularly in the fields of transport and energy.
The policy statement explains that the Secretary of State will consider "whether a project is likely to have a significant economic impact, or is important for driving growth in the economy". Many of the existing section 35 directions for local transport schemes have been made on the basis that the local economic benefits will ultimately contribute to the UK's economy, for example through improved connections to national transport networks. These extracts from section 35 directions are instructive:
The imperative of the UK's recovery from the crisis now provides a context in which the 'economic impact' test can be applied even more broadly. Smaller projects, such as local authority-led transport schemes with business cases focussed on local benefits could now take on a wider significance as contributing to the UK's economic recovery.
Other factors which are high on the government's agenda are also now increasingly likely to help local and regional projects make the case for national significance, in particular for local transport schemes which support the delivery of large scale housing or contribute to 'levelling up' by improving regional connectivity.
Local authorities promoting such schemes should consider the section 35 option at an early stage in the project development and when preparing funding bids and supporting business cases. The Departments for Transport and Business, Energy and Industrial Strategy are generally receptive to early conversations about whether a project might be suitable for a section 35 direction.
These departments now have plenty of experience of dealing with section 35 requests. It would be helpful if the government distilled this experience into a guidance document explaining the factors that will be taken into account when considering 'national significance' of economic infrastructure projects.
Whatever bold proposals for planning reform are included in the government's planning policy paper later this month, the section 35 mechanism should not be overlooked as an existing mechanism that could play an important role in helping to deliver the infrastructure that will drive the economic recovery.
Co-written by Matthew Fox of Pinsent Masons, the law firm behind Out-Law.
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