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Working with Planning Reform: Part 2

The Government has published its long awaited White Paper Planning for the Future. While we should embrace reform, what are the issues?  In the second article in a two-part series the planning law team at Dentons looks at more of the main themes including s.106 agreements, removal of CIL and the consequences for local planning authorities.

Abolition of section 106 agreements

The abolition of section 106 agreements could mean losing the benefits that they can bring, as well as the perceived problems. Cutting back their role as a substitute for public infrastructure funding in the form of pure ‘planning gain’/ value capture is absolutely right. Section 106 is not meant to be for this but it does serve two important roles:

  • While planning agreements undoubtedly cause delay they are not normally the main culprit – early engagement and pro-active working can result in section 106 agreements being finalised at the point the planning application is determined.
  • For large-scale developments there will be a need to secure the schools, green infrastructure, stewardship arrangements and affordable housing which is needed to make new communities a success.  This provides both developer and local communities with more certainty about the timing of delivery of infrastructure and facilities and can be at the heart of placemaking.  It also helps avoid procurement headaches and questions about whether development should be restrained while awaiting public sector infrastructure delivery.

Agreements can also offer more. Section 106 agreements can play a role assisting in the “unlocking” of fragmented sites through the inclusion of equalisation provisions and no-ransom provisions. They can cover jobs training and local procurement issues. They can provide for community support and the activation of places. They can make sure that there are tools to help delivery by changing housing tenures. They can make sure that environmental and design standards are met not just at the point of permission but throughout the life-cycle of the development. It is not clear whether conditions are intended to, and can, cover these issues in future. 

We should be mindful too that delivering Biodiversity Net Gain will sometimes require agreements beyond the Conservation Covenants envisaged by the Environment Bill.

Removal of CIL

The proposal to replace CIL with a new, consolidated “Infrastructure Levy” has some merit. The approach is more straightforward. It may help to make sure that land is repriced to reflect the new tax, although the economic incidence of a value tax is less clear than it is for CIL. As with the housing numbers it seems to propose centralising decisions on levy rates and it is not clear how this fits some of the other more localist themes in the White Paper. Helpfully, nationalising decisions on rates would eliminate the present futility of CIL objection and examination processes.

Changing the payment point to reflect development cash flows is sensible change as less of the levy would be payable upfront. However, suggesting the full 100% should be paid on first occupation and that LPA’s can (and should) borrow against the expected CIL receipts are perhaps steps too far. This may be particularly contentious if the final levy amount is not known and is subject to market volatility.

Giving small house builders a boost

There is mention of helping small/medium house builders to enter the market, which recognises the clear need for greater diversification to boost housing delivery. However, it is no secret that in order to make a meaningful dent in delivery numbers, local authorities need to contribute to house building. The Paper focuses heavily on their role as local planning authority but neglects the direct role they can play in the delivery of new housing. A missed opportunity perhaps?

Consequences for Local Planning Authorities

There is a welcome re-emphasis on applications being determined within the statutory time limits. The well-established time limits of 8 or 13 weeks for determining an application from validation to decision should be a “firm deadline.” Even more welcome for applicants is the potential of a refund on their application fee if the local planning authority does not decide the application within the time limit. Indeed, the refund of the application fee is also proposed in the case of successful challenge on appeal to the planning decision. This addresses developer concerns about fees and performance but additional detail will be needed about how to deal with poor or poorly presented schemes. How will inadequate applications and application materials be addressed, and how will that be policed so that we do not have a pre-validation “waiting room” for applications? Should failing appellants automatically pay an appeal fee (ringfenced for LPA capacity building)?

Are we there yet?

You may be forgiven for expecting the reforms to come into force within the month.  Expect radical change slowly.  Once consultation on the White Paper is over it seems there will need to be primary and secondary legislation.  There will then be implementation and transition periods.  New houses under the changed system are unlikely to be delivered in this Parliament.

But change could come sooner. Almost all of the radical measures could be achieved within the existing system:

  • Nationally set housing numbers? This is what used to happen and could easily be resurrected. 
  • Changes to the Local Plan process and the soundness test? That could be achieved largely by re-writing the NPPF and expanding the use of the so far unloved permissions in principle.
  • Expanding CIL to address affordable housing is already in the legislation. 

If there is a true eagerness for radicalism it would be quicker to recognise that the framework is already there to deliver it without the delay associated with too much legislative change.

This article first appeared on the Dentons Planning Law Blog. With thanks to Amy Carter for her assistance with this blog.

Click here to read the first part of the series.

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