Despite the change in prime minister, it is probably safe to assume that the Levelling Up and Regeneration Bill (the LRB) will progress through to royal assent, if only because there is not enough time for a further fundamental re-think of the planning system or to put any such rethink into effect before the next general election. Also, as currently drafted, there is one mechanism in the LRB which, once in force, will allow the government to make far reaching changes to planning across the country without further legislation.
Although some of the most eye-catching reforms suggested by the 2020 Planning White Paper have been dropped, Parts 3 – 7 of the LRB still offer a ‘smorgasbord’ of changes to planning and compulsory purchase, some of which are undoubtedly radical. Of these, the following are likely to have the most significant impacts.
Development Plan
Section 38(6) of the Planning and Compulsory Purchase Act 2004 (the PCPA2004) has long been the keystone of the English planning system. It requires that planning decisions will be made in accordance with adopted local plan policy, unless material considerations indicate otherwise. This is known as the ‘presumption in favour of the local plan’.
It is difficult to overstate the significance of the changes proposed by s. 83 of the LRA to that presumption. Section 83 will introduce new subsections 5A – 5C to s. 38 of the PCPA2004:
- 5A gives statutory force not just to the development plan, but also to any “national development management policy” (an NDMP), i.e. a land development / use policy which the Secretary of State designates by direction as an NDMP.
- 5B requires determinations to be made in accordance with the development plan and any NDMP “unless material considerations strongly indicate otherwise”; and
- 5C provides that where there is a conflict between the development plan and an NDMP, that conflict must be resolved in favour of the NDMP.
The effect of this is to relegate the local plan in the planning hierarchy to an ‘also ran’, giving supremacy to any NDMP. This is doubtless the government’s response to a series of Court decisions which consistently held that NPPF policy, and especially the ‘presumption in favour of sustainable development’, did not inevitably trump adopted local plan policies (see Hopkins Homes Ltd. v Secretary of State for Housing, Communities and Local Government [2017] 1 W.L.R. 1865, and Gladman Developments Limited v Secretary of State for Housing, Communities and Local Government [2021] EWCA Civ 104) and spells the final death-knell for David Cameron’s policy of Localism.
LRA s. 82 has the effect of giving design SPDs the statutory force of a local plan (currently, they do not form part of the statutory local plan, thanks to Regulation 6 of the TCP (Local Planning) (England) Regulations 2012). Reading this together with the sharpened duty on decision makers to determine applications in accordance with the development plan “unless material considerations strongly indicate otherwise”, this change will doubtless give some teeth to the Government’s pursuit of ‘beauty’ in planning.
However, if local design codes are to take on statutory force, they will also surely need to be subject to a Local Plan examination. Not only will that slow down their adoption, it will also offer opportunities for developers to run viability objections to what they are likely to see as overly prescriptive and expensive design requirements, thereby potentially blunting the code in its adopted form.
The Householder’s Perspective
One innovation likely to be of particular importance to householders, is the extension of the periods during which enforcement can be taken against breaches of planning control.
As originally enacted in 1990, s. 172 of the Town and Country Planning Act 1990 only allowed enforcement steps against breaches of planning control to be taken within four years of the breach. That position became more nuanced with the introduction of s. 171B (Time Limits) in 1991. That section preserved the four-year limitation period where the breach comprised operational development or the change of use of a building to use as a single dwelling house, but otherwise extended the deadline to ten years for all other breaches.
Section 101 of the LRA now amends s. 171B(1) & (2) to impose a single limitation period of ten years for all breaches of planning control. This change may well be the one most immediately felt by householders, particularly where they are looking to sell their homes having previously carried out some development in breach of planning.
The government should put in place some transitional provisions before bringing this change into effect, but it is not yet clear what those will be. The most likely provision will be to ensure that the new limitation period does not apply to any unauthorised works or change of use of a building to a single dwelling where those works / change of use took place more than four years ago (but less than ten years), and where either there is a certificate of lawfulness (a CLEUD) in place, or any application for a CLEUD has been made before the date on which the universal ten-year limitation period comes into effect.
Hence, if you have carried out built development without planning permission or have changed the use of a building to use as a single dwelling more than four but less than ten years ago, now is the time to take advice and apply for a CLEUD.
The Developer’s Perspective
Two changes of particular importance to developers are the introduction of a new Infrastructure Levy in lieu of CIL and s. 106 agreements and of Environmental Outcomes Reports (EORs).
Infrastructure Levy
Section 113 and Schedule 11 of the LRB inserts new sections into the Planning Act 2008 (PA2008) making provision for an ‘Infrastructure Levy’ designed to cover the costs “incurred in supporting the development of an area … by owners or developers of land in a way that does not make development of the area economically unviable” (PA2008, proposed s. 204A).
The precise details of the new Infrastructure Levy will be set out in regulations which have yet to be drafted. However, the following are already clear:
- Local Authorities are likely to be forced to adopt the Infrastructure Levy (by contrast, LPAs can currently choose not to adopt the Community Infrastructure Levy (CIL)).
- It will be set by way of an examined charging schedule and collected by the LPA.
- The preparation of the charging schedule and the collection of the charge appears to be closely modelled on the existing Community Infrastructure Levy, with a developer assuming liability, as well as exemptions, default and enforcement provisions.
- The charge will be set by reference to the gross development value of the relevant development, albeit, in setting the charge, the LPA will need to have regard to the potential impacts on the viability of development.
- The list of infrastructure on which the collected charge will be spent includes affordable housing.
- ‘In kind’ payments of affordable housing and other infrastructure will be possible.
- The Infrastructure Levy will replace CIL in England (other than Mayoral CIL in London), and s. 106 is likely to be very significantly scaled back.
CIL has been a ‘mixed blessing’ so far and, given the obvious reliance on the CIL regulations as a model for the provisions set out in LRA Schedule 11, it is possible that the new Infrastructure Levy may suffer many of the same problems.
A particular criticism of CIL is the relatively small amount of money that it recovers in contrast with the overall cost of the infrastructure it is intended to fund. This shortfall is a direct result of having to adopt a broad-brush approach to setting a charge (as opposed to negotiating infrastructure contributions on a site-by-site basis). Government guidance on setting CIL advises that CIL should not be charged at the “margins of viability” (Planning Practice Guidance, Para 020 Reference ID: 25-020-20190901). As a result, and with an eye to successfully negotiating the CIL charging schedule examination, Local Authorities will often adopt a charge level that represents a healthy discount on the actual cost of the infrastructure they intended to fund. The various exemptions further exacerbate the shortfall between the expected income, and the actual cost of the infrastructure.
Furthermore, given that CIL is non-negotiable, if viability becomes an issue on a residential scheme, the other major cost area which is (by contrast) negotiable is the level of affordable housing. As a result, where CIL is in force, it is not unusual to negotiate affordable housing levels below policy levels for viability reasons.
For similar reasons, the new Infrastructure Levy is likely to be set at a level that represents a discount to the actual cost of the required infrastructure. However, unlike CIL, because the cost of affordable housing is included within the charge (where that housing is not being delivered ‘in kind’), the charging authority when balancing its Infrastructure Levy budget, will at least have the choice of either reducing the amount of affordable housing it chooses to deliver, or reducing the amount of infrastructure. However, in many cases those are likely to be unenviable political choices.
Environmental Regulations
A new regime of Environmental Outcomes Reports (EORs) are intended to replace the current regime of Environmental Statements and Appropriate Assessments (both of which assess the likely significant impacts of development on the environment) prepared under, respectively, the Town and Country (Environmental Impact Assessment) Regulations 2017 (the EIA Regulations) and Part 6 of the Conservation of Habitats and Species Regulations 2017 (the HabitatsSEA Regulations), as well as the regime of strategic environmental assessments for plans and programmes required by the Environmental Assessment of Plans and Programmes Regulations 2004 (the SEA Regulations). Powers of revocation are contained at LRA s. 127(3) and 129 (2).
LRB s. 120 imposes a variety of ‘non-regression’ obligations on the Secretary of State when making the EOR regulations. Hence, ostensibly, the EOR regime as it affects planning decision and policy making should be similar to the current regime of environmental statements (ESs) produced in support of certain planning applications and strategic environmental assessments (SEAs) produced as part of planning policy development. ESs and SEAs will now be replaced by EORs, but the old requirements that the ES/SEA (soon to be the EOR) is considered before any relevant planning permission is granted / plan is brought into effect will remain (LRB, s. 117(2) & (3)).
However, the EOR Regulations themselves (once made) will include specified environmental outcomes, and a key difference between the present EIA/HRA/SEA regimes and the EOR regime is that the EOR will only need to assess the impacts of the proposed development / plan on “the delivery of specified environmental outcomes”. Given the current government’s deregulatory instincts, those specified outcomes may well be significantly narrower than the broad scope of assessments which are often required by the current system.
It is fair to say that the current EIA regime has become an industry in itself. It is often disproportionately burdensome, time-consuming and costly. It is common for developers to defensively assess all possible environmental impacts, and not just the likely significant impacts, in an attempt to deal with all possible objections to their schemes. The resulting reports often run to thousands of pages and it is a standard joke that they probably cause more environmental damage in printing and shipping than the development itself. Hence, there is certainly scope for some judicious pruning of the existing systems. However, we will need to wait for the consultation on the draft EOR regulations to see what balance the government actually strikes between deregulation and environmental protection or improvements.
All in all, the Levelling up and Regeneration Bill promises a significant shake-up of the current planning system. Of the various innovations, putting national policy on a statutory footing capable of trumping local plan policy and introducing an all encompassing infrastructure levy are amongst the most far reaching reforms since the introduction of the Town and Country Planning Act in 1990.
However, as ever, the ‘devil is in the detail’. To fully understand the impact of many of the proposed changes, we will need to see both the relevant regulations which give effect to many of these changes, and the transitional provisions. The Bill is likely to become law in the Autumn of 2022. Hence, draft regulations should be published for consultation during the winter and spring, with a view to coming into force in the Autumn of 2023. In the meantime, “watch this space” for any further updates.
