Out-Law Analysis | 13 Aug 2020 | 8:42 am | 7 min. read
The delivery of 'large scale' developments will be fundamentally altered particularly as a result of proposals concerning the funding of infrastructure required for development and the new categorisation of land system. The proposals, set out in a recent planning white paper, form part of a broader agenda being pursued by the UK government to deliver housing and other development projects more efficiently and quickly and to overhaul the established development framework in England.
This is part of a series by Pinsent Masons exploring the practical implications of the government's planning reform proposals for England, as set out in its 'Planning for the Future' white paper. Other articles in the series address topics including the costs of bringing development forward, and design and environmental issues. Registration is now open for a series of webinars Pinsent Masons is hosting this September on planning reform, which focus on what the changes will mean for the timely delivery of new housing, commercial and retail development, the implications for planning across energy and infrastructure, and the relationship between the reforms and the wider decarbonisation and environmental agenda.
The new approach to plan-making would see local plans identifying three categories of land: 'growth areas', 'renewal areas' and 'protected areas'. According to the proposals, all areas of land in England would need to be categorised within each of these areas.
'Growth areas' are stated as being those which, the government envisages, would be most appropriate for large scale development, including new settlements. Land falling within these areas in the local plans would result in outline planning permission being granted on adoption of the relevant local plan.
This is a significant step forward in terms of streamlining the planning permission process. Effectively it replaces the consideration of applications for outline planning permission on a case-by-case basis because consideration of the overall principle of development proposals takes place at the earlier local plan stage through the categorisation of land.
However, there are four areas related to this categorisation proposal which are unclear or require further thought.
The first area relates to how sites in 'growth areas' secure detailed planning permission. Three alternative routes are proposed in the white paper yet only one, a reformed reserved matters process, seems entirely appropriate in this context.
The second route is the use of local development orders (LDOs). This is a curious proposal given that LDOs usually grant planning permission for specified types and classes of development within a defined area, subject to meeting design and other parameters set. A LDO gives both outline and detailed planning permission at the same time and provides a flexible framework for implementation.
The third route is use of development consent orders (DCOs) under the Planning Act 2008 for 'exceptionally large sites'. Very large schemes would benefit from being able to be authorised by DCOs, in our view. While we believe the national policy basis for DCOs needs to be refreshed, DCOs could make a big difference to some schemes as long as they are drafted with appropriate LDO-style flexibility, which we consider should be perfectly possible. This is essentially because DCOs could, in one hit, secure all necessary powers and primary consents for all component parts of the entire scheme – so not just planning permission – and most importantly, do so irrespective of what the local plan may say and as a powerful statutory instrument.
Notably, a paper in July by Garden City Developments CIC informed by research by UCL supported the potential for consenting large garden communities – i.e. those with more than 10,000 homes – under the DCO regime.
However, the white paper's reference to DCOs in the particular context of obtaining detailed planning permission is confusing, conflating two very different planning regimes which serve different purposes and should remain separate.
The second area relates to the intention for all land to be categorised, meaning that the concept of 'white land' will no longer exist. Achieving this in practice could be challenging and potentially cause difficulties at the time of adopting a local plan. An alternative approach could be to retain the concept of white land and allow the use of LDOs or conventional planning permission, if necessary, for the purpose of granting planning permission in respect of that land.
The third area concerns the categorisation of land in the context of green belt. The proposals indicate that green belt land would fall in the 'protected' category with stringent development controls. However, there is no suggestion that the existing green belt will be reviewed to ensure that all such land continues to perform an effective function or if new land should be designated as replacement or new green belt. This is a missed opportunity and is likely to put pressure on existing urban areas and other undesignated and previously undeveloped land. This pressure will particularly hinder the delivery of large-scale developments.
Finally, the white paper appears to suggest that 'section 106' agreements, which set out developers' planning obligations, will in the future be prevented from providing for the payment of money by way of local and other infrastructure contributions. Large developments in particular will of course still need section 106 agreements to deal with and secure a host of other matters, not least sustainable transport, construction skills and affordable housing issues. It is not clear how the detailed permission stage would work without them.
Separate to the white paper proposals, the government late last year opened a consultation on development corporations reform. As part of those plans, the government gave its backing to development corporations as delivery bodies, including at Toton in the East Midlands – an important site for the high-speed rail project, HS2. We hope that this support is quickly crystallised in the government's response to the consultation. With greater powers and flexibility, development corporations can play a major role in driving large scale development.
However, the role of combined authorities in the new proposals requires clarification.
Partner, Parliamentary Agent
Undoubtedly there is significant potential to harness the involvement of mayoral combined authorities in planning given their broad reach, but their precise role and resourcing, and that of other local authorities, needs to be defined and understood
According to the government in its white paper, local authorities, including mayoral combined authorities, will be 'liberated to plan'. We agree that in the new planning framework, mayoral combined authorities could have an important role in delivering large scale, cross-boundary development given their inherent geographic spread. But no detail is provided on what the government's specific intentions are.
For instance, it is unclear what role mayoral combined authorities may have in terms of responsibility for the development of local plans and delivery of prescribed housing numbers. It will need to be clarified whether it will be the constituent local authority's role for their local area or that of mayoral combined authorities across their wider area, and whether this will depend on whether the combined authority concerned has any strategic planning powers in the first place.
Undoubtedly there is significant potential to harness the involvement of mayoral combined authorities in planning given their broad reach, but their precise role and resourcing, and that of other local authorities, needs to be defined and understood.
Similarly the role of relevant local authorities in delivering sustainable transport links for new developments in this proposed new planning framework will be crucial. 'Planning for infrastructure' is a core component in the government's thinking but the issue is approached almost entirely from a funding perspective. The proposals would benefit from giving specific consideration to the role of, for instance, local transport authorities in providing sustainable transport from the perspective of both delivery and policy.
The identity of the statutory consultees in planning applications also needs to be clarified. It appears to be a quirk of the system that, for instance, a combined authority in its capacity as local transport authority is not a statutory consultee.
The proposals for an 'infrastructure levy' are, in principle, a welcome step forward towards the creation of a funding mechanism for infrastructure which is transparent and gives certainty for all involved. For many years, developers have been required to enter into section 106 agreements or make payments under the Community Infrastructure Levy (CIL).
Although both have contributed towards the delivery of infrastructure, they are not without their problems. Planning obligations under section 106 agreements can lead to significant inconsistencies between schemes depending on, for instance, the ability of a developer to negotiate. It is right that this lack of uniformity is being tackled.
With CIL there has been a deficiency in take up from certain local authorities. Whether a developer is required to pay CIL can be affected purely by where the development is rather than its scale, for example. The proposed flat-rate infrastructure levy, whether a single national rate or an area-specific rate, would remove this inconsistency.
In effect the proposal is for a levy which seeks to benefit from increases in the value of land brought about by development – so a form of land value capture. Not all developments deliver uplift in land value, however. This is a symptom of the country’s regional inequalities. Developers in locations with no uplift may benefit from falling beneath the minimum threshold proposed but the effect would be that local authorities will have less levy revenue to direct towards infrastructure. This would re-enforce regional disparities and detract from levelling-up. The government should consider whether a national fund should be providing this investment in areas that do not generate the additional values but do need investment in strategic and green infrastructure.
The government has an excellent opportunity to re-shape the outdated aspects of our planning regime that cause particular issues for large scale projects. However, the impact of the changes proposed will probably be the greatest for these projects. A lot of questions arise on the central principles that should be resolved before formal legislative proposals are brought forward.
Co-written by Robbie Owen, Nick Mansell and Jan Bessell, specialists in planning law at Pinsent Masons, the law firm behind Out-Law. Registration is now open for a series of webinars Pinsent Masons is hosting this September on
planning reform, which focus on what the changes will mean for the timely delivery of new housing, commercial and retail development, the implications for planning across energy and infrastructure, and the relationship between the reforms and the wider decarbonisation and environmental agenda.
11 Aug 2020
12 Aug 2020