The key changes to the English Planning System envisaged by the incoming Coalition Government in 2010 have now been made. The Localism and Decentralisation Act came into effect in late 2011 and the centrepiece of the reforms, the National Planning Policy Framework has now been with us since March. Yet there is continued pressure on the Government to secure growth through housebuilding and development in order to drive the economy forward. September’s Government announcements, a Cabinet reshuffle and numerous discussions at the recent Party Conferences have all highlighted the importance of development to our economic recovery, but why have the NPPF and the Act not been enough to create a step-change in delivery? Is the NPPF creating or blocking development opportunities? What more should the Government be doing?
We spoke to a range of professionals and developers within the industry over the course of the last month and present some of their views below.
The National Planning Policy Framework is founded on a collective approach; an approach fuelled by engagement and cooperation. “We have been fortunate enough to have worked with a number of exceptional ‘can-do’ authorities who welcome developers and encourage much needed growth,” offered John Dodds, Midlands Regional Director at St. Modwen. “We are extremely proud of the productive working relationships we have forged with the officers, members and communities at Birmingham City Council, Wolverhampton City Council and Rugby Borough Council for example, who have been truly partnership focused, customer-friendly authorities. This relationship has facilitated landmark mixed use developments on former industrial sites such as Longbridge and Goodyear in Wolverhampton, but was already well underway prior to the NPPF’s adoption. These types of collaborations should be the reality of all development under the new regime, but sadly, all too often, we are suffering from the opposite; the ‘no-can-do’ approach adopted by certain other LPAs that frustrates growth, alienates developers and leads to stagnation in the property market.”
A similar experience has been encountered by David Sacof, a Bristol-based developer blighted by a lack of engagement from Local Authorities. “I certainly feel as though the NPPF has had no effect in practice whatsoever. Indeed, the last minute change to it giving absolute priority to the LPA’s approved policies has emasculated it. The attitude of planners is still initially negative and unhelpful – ‘how can we refuse this?’. I realise that change takes time, but the removal of the sometimes steadying hand of committees has resulted in officers behaving badly and highly subjectively. At least one could speak to a local councillor previously, but they seem no longer able even to call in an application – surely this flies in the face of pre-determination?”
On canvassing our Planning teams throughout England, we find that many Local Authorities are trying to respond, bring forward plans, and pick up the growth agenda. But this is often against a background of councillors and communities who believe the Localism rhetoric of mid 2010 and believe that they have a freehand to determine levels of growth and development, often well below levels debated and approved in the still-extant Regional Strategies. There are wide areas where there is no political desire for growth at the local level, and here the NPPF and its advocacy of cooperation is having no discernable impact. “The real battleground of the NPPF is not in the areas of multiple deprivation,” offers Iain Painting, Partner in our London planning team, “but in the ‘Waitrose towns’ where there is demand. The South East is a major economic driver for the UK and is experiencing housing price rises, and yet the NPPF is not being correctly interpreted by Local Authorities there.
“In Leeds, as our ‘Meet the Team’ article demonstrates, there is a clear appetite and opportunity for growth and yet the Council is stifling it. The real issue with the NPPF is not actually the words themselves, but how they are enforced. The proof will therefore be in the letters that come out from the Planning Inspectorate and from Eric Pickles in the next six to 12 months as to whether that planning balance, which is now writ large in the NPPF, is being applied in favour of economic growth rather than the NIMBY charter.”
The economic driver behind cooperation also seems to be having little impact on many local authorities. “Members at some authorities seemingly ignore national guidance,” says Dodds, “disregarding the wider gains and benefits that accrue from growth and overlooking incentives such as the New Homes Bonus and employment generated through construction work, leading to challenges, appeals, resubmissions, judicial reviews and, at times, the complete withdrawal of planning applications. Some seem to prefer a Planning Inspector’s decision rather than make a decision themselves which might be the ‘right’ decision, but will fly in the face of local action groups. All of this involves significant costs and loss of revenue for councils and diverts money away from investment in local communities.”
Ian Tant, fresh from the experience of the successful appeals at Shinfield to the south of Reading, acknowledges that practical experience of the system is driving the industry into appeals. “There is a disconnect between the localism message of the incoming Government and how it has turned out in planning guidance. When the Government said there was freedom for local communities to decide levels of growth, it really meant a freedom to decide on higher levels of growth – but that’s not what councillors can deliver in the face of continued public opposition to development. The outcome is that it seems there is a far better prospect of gaining planning permission by running an appeal than by relying on local choice. Indeed, the message of the current Growth and Infrastructure Bill that some local authorities may simply be bypassed by taking applications straight to the Planning Inspectorate is a recognition that this could well be right in some areas. The difficulty is that it drives up the cost of promoting development and is counter-productive in securing economic growth if you have to rely on taking matters to inquiries and hearings.”
An added layer of complexity within the planning process is that of the emerging Community Infrastructure Levy (CIL).
Iain Gilbey of Pinsent Masons LLP voiced his concerns at the recent Homebuilders Federation Planning Conference. “At a time when economic growth is not just desirable but absolutely necessary, to impose a further tax on development in the UK is a retrograde step. The fact that the tax is complicated to implement and complicated to enforce makes it even more difficult for the development industry to understand and engage with it.”
The Government has appointed the British Property Federation to undertake a comprehensive review of the approach but, in the meantime, recently proposed amendments make few radical changes. So the already-amended CIL Regulations will continue to change .
David shares concerns on the effect of CIL. “We are all aware of the peculiarity of significant up-lift in value once land secures planning consent, but when that value crystalises is the time to tax the owner of it in the normal way, not to tranfer this cost on to the developer. If we are stuck with this situation, if it can be genuinely shown that a development will cause the need for a piece of infrastructure, then it is reasonable for the development to bear the cost. I, however, believe that many Councils view CIL as just another way to raise much-needed money by taxing development. I believe there should be a restriction in place which requires LPA’s to prove that the money raised is being applied specifically for its ostensible purposes and returned to the developer if not spent in this manner within a set time period.”
So, given all of the above, do we really believe that more homes will be built in 2013?
Two thirds of housebuilders polled at the 2012 HBF Planning Conference believed 2013 will see more new homes built than in 2012. This confidence is reflected in the market, it seems, where the underlying value of construction projects starting on site in 2012 increased by 30% in the first quarter and 40% in the second (Glenigan: November 2012).
“Clearly, as the statistics indicate, there is growing positivity in the market,” offers Iain Painting. “More homes will be built next year, but not because of Government reforms. In reality, the major housebuilders have now established funding streams, reassessed their build programmes and are therefore now comfortable with progressing development. We will also almost certainly see more projects granted on appeal, due not only to the NPPF’s 5 year land supply requirements but also the recent Government request for the Planning Inspectorate to prioritise housing appeals, which will mean more housing consents delivered. There will, however, remain a large gap between these numbers and the quantity we need to be building to really make a dent in the shortage of supply. The amendments and enforcement of the new regime to date has certainly not been the shot in the arm that was purported.”
One thing is clear: the much-amended Planning system, which has been in constant flux since 2004, will continue to change for some time to come.