Legal briefing | Planning, Real Estate Development, Real Estate, Environment & Regulatory |

Are we in the zone? Planning for the Future

Overview

Following an announcement by the UK Housing Secretary earlier this year, on 6th August 2020 the Government published its long-anticipated planning regulation reform proposals titled 'Planning for the Future' (the 'White Paper'). The White Paper is open for consultation until 29th October 2020 and contains the Government's proposals for a significant overhaul of the planning regime and replacement of the current model with a streamlined, rules-based system. The proposals are split into three concepts: Planning for Development; Planning for Beautiful and Sustainable Places; and Planning for Infrastructure.

Pillar One: Planning for Development – the move to a 'zonal system'

Under the current planning regime, planning applications are assessed against the local plan on a case-by-case basis, with permissions decided by an elected planning committee of local councillors.  The new regime proposed in the White Paper would involve a move away from the uncertainties of the 'discretionary' model towards a zonal system in which all land is categorised as one of three zonal categories:

  • Growth areasland that is suitable for 'substantial development' (as defined in policy). This may include the construction of new settlements, urban extension and redevelopment projects. Sites in this zone would receive automatic, outline approval for development. The focus is on certain types of infrastructure developments (including but not limited to new homes, hospitals and schools).

  • Renewal areasland that is suitable for 'development' (with emphasis on smaller scale development in contrast to larger scale 'growth' areas). There would be a statutory presumption in favour of development in this zone if suitable for the given area (such as gentle densification, town centre development, small village expansion) with a focus largely toward urban and brownfield development.

  • Protected areasDevelopment on 'protected areas' (those designated as a result of their particular environmental and/or cultural characteristics) will continue to be restricted, as is the case with current policy, either nationally or locally defined. Areas such as the Green Belt, Areas of Outstanding Natural Beauty, Conservation Areas, Local Wildlife Sites, areas of significant flood risk and important areas of green space would continue to be subject to more stringent development controls.

This zonal system would form the basis of a new-style Local Plan. A Local Plan should be assessed against a single statutory 'sustainable development' test to ensure the balance between environmental, social and economic objectives of any planning proposal. Notwithstanding a more centralised proposal, local planning authorities and communities will set the agenda for their own areas, including input in producing required design guides and codes to reflect local character and appearance of development.

The White Paper envisages that the zonal system combined with the new structure of Local Plans will speed up the overall planning process in order to meet the target for the construction of new homes in the UK. New 'design codes' are intended to ensure that local authorities and the Planning Inspectorate meet a statutory timetable of 30 months for key planning stages (i.e. where a scheme meets the code criteria, it would be automatically granted permission), and there is scope for sanctions in the event of delays.  However, evidence from other jurisdictions indicates that the planning process under zonal systems can be as time-consuming and complex as it is under the current UK local planning regime, with the increased administrative burden of setting all the 'design code' standards to which the new regime must comply.

The zonal system reflects a push for more national control, with plans to establish a new expert body to assist in the effective use of design guidance and codes. However, this may reduce both public input and democratic accountability that characterises the current UK regime.

Following the consultation period, there would undoubtedly be a lengthy transition period for the implementation of the Pillar One proposals. The new framework would require substantial re-assessment of associated legal and financial governance.  The process of national body input and upfront designation of zones looks set to be a lengthy and complex overhaul of the current local plan formations. There are also concerns about how the zonal system interdigitates with the new use classes coming into force on 1st September 2020.

Pillar Two: Planning for Beautiful and Sustainable Places – an environmental focus

"We want to ensure that we have a system in place that enables the creation of beautiful places that will stand the test of time, protects and enhances our precious environment, and supports our efforts to combat climate change and bring greenhouse gas emissions" to net-zero by 2050"

Planning for the future: White Paper August 2020

The White Paper states that sustainable planning is at the centre of the Government's proposals. Alongside proposals that relate to the 'Building Better, Building Beautiful' Commission's report "Living with Beauty", which highlights the need to engage the public and build high quality developments that fit local character and community preferences, the consultation sets out a number of proposals that align with the UK Government's binding target to achieve net zero emissions by 2050, including the following:

  • construction of all new streets to be tree-lined;

  • from 2025, new homes should produce 75-80 per cent lower CO2 emissions than current levels;

  • all new homes are to be carbon neutral by 2050; and

  • homes built under the new planning system should not need retrofitting in the future.

Further information can be found in the National Design Guide, with the Government setting out plans to publish a National Model Design Guide during the autumn.

There is clear stakeholder consensus that the UK planning system is a crucial tool for mitigating and adapting to climate change challenges.  However, there are a few concerns about the new regime:

  • The White Paper states that a national as opposed to local approach will allow local authorities to be freed from many planning obligations, allowing them to reassign resources and focus more on enforcement. However, the zonal system approach may not offer a comprehensive environmental protection mechanism.

  • In addition, there is concern that the 'fast-track' and 'speed up' approach do not align with the claims for improvements to the protection of the environment. The White Paper proposes that 'processes for environmental assessment and mitigation need to be quicker and speed up decision-making and the delivery of development projects' which does not align with the current rigorous and well-established system for safeguarding and planning within protected areas, albeit a process that extends planning timelines.

  • This may be justified in the light of the proposed consultation this autumn on the Environmental Impact Assessment requirements for certain developments, but the need to comply with EU based legislation has been weakened by Brexit, and this could change the landscape of statutory environmental protection. Despite the Government's intention to put the environment into a better state, the focus on "protecting more of what is precious" could imply that landscapes and features of "lesser" value may not be precious enough to warrant protection.

In the context of the built environment, there is certainly scope for net-zero ambitions to unify stakeholders in their responses to environmental consultations. The new regime continues to place value on UK green spaces and to protect the Green Belt, with the reforms promoting more development on brownfield land. This may create bottlenecks for some local authorities faced with top-down housing targets, if a significant part of their territory is Green Belt or otherwise designated for protection. This will be accentuated by the removal of the duty to cooperate between local authorities in the delivery of unmet housing needs.

Pillar Three: Planning for Infrastructure and Connected Places – a new 'Infrastructure Levy' and the curtailment of Section 106?

Developers will be familiar with the parallel regimes under the current UK planning system whereby developer contributions are secured by one or both of a negotiated Section 106 agreements and the Community Infrastructure Levy ('CIL'). These contributions are intended to be put towards projects such as affordable housing, parks and playgrounds.  The Government proposes to replace both these systems with a new, national consolidated 'Infrastructure Levy'.

The new Infrastructure Levy would be a tax calculated by reference to the final value of the development (land value uplift) based on the applicable rate at the point when planning permission is granted. This would be based upon a flat-rate, set nationally, at either a single rate, or at area-specific rates. The funds are proposed to be used on projects such as schools, roads and GP surgeries, and a fixed proportion of affordable homes for development, though the Government is open to consultation on how these funds are used. Exactly how 'value' is to be assessed and quantified is one of many areas requiring further detail.

The Government also proposes certain flexibilities in application of the new levy:

  • A value-based minimum threshold below which the levy is not charged, to prevent certain types of development becoming unviable.

  • An extension of the exemption from Section 106 for small sites, to help developers in the economic climate post COVID-19, resulting in reduced obligations to provide affordable housing and help them to get more homes built.

  • Additional exemptions for self and custom-build developments.

There are plans to extend the scope of the Infrastructure Levy to capture changes of use (e.g. on projects where there is no additional floor space, and for some permitted development rights ('PDR')) including office to residential conversions and new demolition and rebuild PDRs. This approach would increase the levy base, provide for further contributions to infrastructure delivery and may help overcome resistance to development from local communities.

Whether Section 106 agreements will be completely abolished is not currently clear. They may be increasingly subordinated to planning conditions and the Infrastructure Levy. However, they are still likely to be necessary to address the specific circumstances attached to more complex developments that give rise to financial contributions and other obligations not catered for by the proposed standardised value-based Infrastructure Levy.       

Radical reform or timely building-blocks for the UK regime

A substantial overhaul of the planning system is long overdue, so the more radical proposals are welcome. However, there is much that needs to be clarified in order to maintain a balance between speedy development and environmental protection, maintaining quality of those developments and ensuring that a fair proportion of the profits of development are recycled into critical infrastructure needs.

The White Paper demonstrates the Government's commitment to a more centralised regime based on zonal systems and national design codes. The zonal system hints at a policy designed to curb local opponents blocking development in designated growth zones. Establishing the new zones will require a degree of stakeholder consensus, which could well be a lengthy and complex process.

At present local intervention can occur at plan-making stage but also where individual planning applications arise. This will remain, but the extension of permission in principle and development order type regimes in the Renewal and Growth zones may mean that there is a reduction in local stakeholder involvement at the point where individual development is brought forward. The Government has pledged greater opportunity for local involvement at plan-making stage, and that this will be an improvement on the planning notice attached to a lamp-post lottery that currently exists. However, engagement of local communities in plan making presupposes an understanding of, and willingness to be involved in the plan-making process. This is a big shift in individual responsibilities and would require a major educational effort to motivate local people to understand the importance of active individual involvement.

Government has stated its commitment to improvements for the protection of the environment and has endorsed the 'Building Better, Building Beautiful Commission' report. However, the proposals will need to work effectively alongside other aspirations, such as achieving net-zero, ensuring the quality of developments, particularly residential dwellings, and accommodating the highly variable needs and aspirations of local communities and regions.

There is the potential for faster and more flexible development being brought forward, but owners and leaseholders may need to be wary of monitoring and managing this flexibility to ensure that it does not affect the value of portfolios or unauthorised exploitation of development freedoms.

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