Reforming the National Planning Policy Framework

Reforming the National Planning Policy Framework Notes from a parallel universe

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Reforming the National Planning Policy Framework Notes from a parallel universe

There is a parallel universe to the one in which we (and our clients) live and work. In this parallel universe, you can take a piece of planning policy guidance, re-draft it so that it says largely the same thing (but make it a bit longer), bring it into force and suddenly the supply of new housing increases dramatically. In this parallel universe Garden Cities will spring up all over the country, residents turn out in their thousands to support new housing projects, infrastructure to enable the development to be built appears as if by magic, and landowners fall over themselves to sell land as quickly as possible at the lowest possible price to enable the housing to be delivered.

Who inhabits this parallel universe? It is almost entirely populated by government policy advisers. It is in their interest to try and persuade us that tinkering with policy solves all problems, especially if that tinkering avoids addressing the real problems facing housing supply in Britain at the moment – public antipathy towards development near our homes, limited resources of local planning authorities, the real cost of providing the necessary social, economic and communications infrastructure to serve new development and the Treasury’s unwillingness to provide it, which stems from the public’s unwillingness to pay the taxes needed to fund it.

Neil Bucknell Partner neil.bucknell@laytons.com +44 (0)1483 407 016

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Reforming the NPPF | Notes from a parallel universe

Unfortunately, the inhabitants of this parallel universe appear currently to be in charge of planning policy. To be fair, they have been in charge of planning policy for most of the last generation. There have been only brief moments when common sense and reality has broken through, and one of the few bright spots in the last 30 years was when the Coalition government pulled together a group of leading figures from the world of development, local government, the planning profession and environmental NGOs to produce the National Planning Policy Framework in 2012.

The significance of the NPPF was as much the fact that it put together in one place all of central government’s planning policies, giving local planning authorities (and more importantly planning inspectors dealing with appeals) a single set of rules to apply in decision making. It is not perfect, but some of those imperfections stem from the fact that voters in England and Wales are wedded to concepts such as the Green Belt which (in this author’s view) add to the problems of housing delivery in an environmentally sustainable manner.

The NPPF has been a major factor in the increase in housing supply that has occurred by giving planning officers a clear set of rules to wave under the noses of recalcitrant planning committee members when considering schemes for which there is no reasonable objection, by giving the Planning Inspectorate a clear set of rules to make decisions by (rather than entertaining arguments for and against a scheme based on selective quotations from different planning policy guidance notes) and by giving applicants and their advisers a clear set of rules to quote when promoting sites through the local plan process, pursuing planning applications (whether against the background of an adopted local plan or not) and fighting appeals.

However, the inhabitants of the parallel, policy making universe have decided that because the NPPF has not transformed the delivery of housing in the UK to the extent that they might have hoped, they must tinker with it to show they are doing something.

Unfortunately, it cannot be said that the proposals address the shortcomings. Even if they did, those of us who live in the real world know that an amended NPPF drafted in the most developer friendly terms would still have to operate against the politics of the real world and “the system”. Looking at the proposal from this standpoint, there are a few points worthy of note or comment:-

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Reforming the NPPF | Notes from a parallel universe

1. Viability, Stealth Taxes and Decision Making From our experience here, we would urge that the NPPF

obtaining planning permission easier for both applicants and

discourages (not encourages) viability reviews once planning

local planning authorities. The Treasury (who we suspect are

permission has been granted. There is an underlying

driving this) should bear in mind that if as a result profits rise,

assumption that profitability on a site can only go up during

they will indirectly benefit through increased tax take on those

its life, and not go down. We doubt that any local authority

who benefit from the development process, to say nothing

would support review mechanisms, if they gave the developer,

of the considerable income that must now be derived from

or beneficiary of the planning permission a general right

Stamp Duty Land Tax charged on sales of development land

to reduce planning contributions or affordable housing

and new homes.

provision. While there may be exceptions (such as the adverse market conditions following the economic crises of

Draft paragraph 34 emphasises the problem. Encouraging

2008 and 2009) that may justify this, for most of the time, long

local authorities to set contribution levels and affordable

term decisions have to be taken by those promoting large

housing provision which “should not make development

sites which are in part based upon the planning gain package

unviable” makes the naive and unrealistic assumption that

and affordable housing provisions in the initial outline

it is possible to effect these levels across the local planning

planning permission. A general regime of viability review only

authorities’ areas taking no account of the considerable range

undermines the commercial decision making process, which in

of factors affecting individual sites which can affect viability,

turn is likely to disincentivise developers and landowners from

including the values achievable in the location where the

bringing forward larger areas of land for development (for

development is situated, ground conditions, the need to carry

example “garden city” developments).

out decontamination, the adequacy of existing infrastructure and any special requirements that were imposed at the time

A further problem that we are particularly encountering

the site was acquired (for example by a seller retaining land

with London authorities is that local authorities and their

or where the development is in part enabling development

advisors seem to have very little idea as to the commercial

to enable the seller to provide new facilities on its retained

practicalities of the development process. At present, we

land). It is also inconsistent with paragraph 57, and the test

are currently dealing with two sites which are locked in

set out in the CIL Regulations 2010 as amended. We would

the planning process with London Boroughs, where the

strongly urge that paragraph 34 be replaced with a paragraph

Boroughs are insisting on a mechanism for review which

pointing out the requirements of paragraph 57 and the

would effectively put a halt to the sale of dwellings on the

CIL Regulations, suggesting that if meeting local authority

development while a further viability reappraisal is carried out.

requirements for affordable housing, the rates of any CIL imposed by the local authority and any other obligations

Our experience over the years is that viability issues are

properly justified under paragraph 57 together adversely

handled poorly in the planning process and that this is a

affect the viability of the scheme, then these should be the

problem that all concerned with the planning system have

circumstances and trigger the viability discussions between

brought upon themselves. We need to move away from a

the applicant and local planning authority (or authorities

system that seeks to squeeze out every element of value in

where there is two tier local government). We do though

the development process through the planning system. If

welcome the suggestion that viability appraisals are not

we did so, it would make the process of applying for and

required in all cases.

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Reforming the NPPF | Notes from a parallel universe

2. Local Employment and Procurement Policies

3. Electronic Infrastructure – Planners do not deliver electronic infrastructure

There is one matter which we think ought to be dealt with in

We are concerned with the ambit of Chapter 10. As with our

Chapter 6 of the revised NPPF.

comments above, one of the problems with the planning system is that it is being stretched to try and deal with matters

There is a growing practice amongst London Boroughs

that are not primarily problems of space or planning. We

whereby obligations are imposed obliging developers to

can understand the planning policy which discourages local

seek to achieve quotas of local procurement of labour and

authorities from failing to make adequate provision for

materials for any scheme, and to provide training schemes

telecommunication masts and other telecommunications

within projects.

infrastructure that requires planning permission. However, the bulk of the problem with providing cable and broadband in

We are strongly of the view that this ought to be discouraged,

the UK lies entirely outside the planning system. Government

as it is anti-competitive, and in many cases overlooks the

policy would be very much directed that ensuring that the

commercial realities of developments, and the geographic

Department of Transport and local highway authorities ensure

realities of Greater London. London Boroughs do not

that whenever a road is built or rebuilt, ducting is provided

generally represent travel to work areas, or economic zones.

so that cabling can be provided quickly and cheaply with the

They are largely the result of an amalgamation of old pre-

minimum of disruption to local communities.

1965 local authorities under the Greater London Council Act in the 1960s. We consider that such obligations ought to be

There is no way that the average local planning authority

discouraged.

is going to be equipped to promulgate effective and practical policies that would encourage the provision of

We can see a role for training obligations on large scale

communications infrastructure as part of the general planning

development, where the need for any particular trade is

process. We suggest that Chapter 10 be redrafted (or at least

likely to be sufficiently long for an apprenticeship could be

paragraph 112 redrawn) to make it clear that its ambit should

supported on site. However, we are encountering problems

be limited to those elements of communication systems that

with Boroughs insisting on provisions relating to the offering

currently require planning permission.

of apprenticeships on small scale sites, where it is simply impractical, because none of the trades will be on site for long enough to support an apprenticeship.

We suggest that Chapter 6 be enlarged to make specific recommendations on these issues.

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Reforming the NPPF | Notes from a parallel universe

4. Conservation of Natural Environment An unintended step backwards for nature conservation?

5. More (badly thought out) Categories of Affordable Housing

We are particularly concerned at the proposed changes to the definition of Affordable Housing, in particular in relation The amendments proposed in Chapter 15 to the provisions

to starter homes and other forms of tenure. The availability of

relating to wildlife replacing the current paragraphs 113

homes suitable for those wanting to buy for the first time can

and 116 have caused consternation amongst organisations

partly be addressed through the general planning system, by

concerned with wildlife conservation. This Chapter as

the local authorities ensuring that there is a sufficient mix of

amended seems to remove the protection currently

size and type of units to ensure an adequate forward supply

afforded to Local Wildlife Sites. Specifically, we consider that

of smaller cheaper units for first time buyers.The problem with

paragraphs 172 and 173 need be amended to make it clear

new novel types of tenure is twofold:

that Local Wildlife Sites are designated for their biodiversity value, and that any development impact that directly or

a. Homes that are specifically designated as only being

indirectly affect them should be regarded as development

available for first time buyers will inevitably be less

proposals that might cause significant harm to biodiversity for

marketable when a first-time buyer wants to sell to

the purposes of interpreting paragraph 173.

move up the housing ladder. We are very disappointed that the consultation responses to the initial starter homes proposals have not been listened to. There is no point in having a class of housing with limited saleability, which will inevitably be a poorer investment for first time buyers, leading to a potential poverty trap for first time buyers in small units who cannot find another first time buyer to acquire their unit, or who can only achieve a sale at a lower price, preventing them moving up the housing ladder if (for example) they want to start a family and buy a larger unit. b. The proposals regarding discounted housing do not address the issue – who owns the discount? If homes being sold permanently at less than 20% of the market value, it implies that the retained 20% discount has to be held by somebody. In particular, the novel forms of tenure (other than the old fashioned shared ownership leases, which are known and understood by registered housing providers, mortgage lenders and others) are unattractive to mortgage lenders. They face the same

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Reforming the NPPF | Notes from a parallel universe

difficulty in evaluating their security as a first time buyer

While we welcome the fact the government is prepared

does in looking at a house that has limited marketability

to review policy from time to time, updating the NPPF as

on resale.

proposed makes minimal impact on the problems facing the planning system at present. Unfortunately, our view is that

We would urge the government to drop these proposals.

the most effective steps (putting more resources into local

Instead, there is a perfectly adequate mechanism in traditional

and national planning, removing some of the financial burden

shared ownership housing, with the housing disposed of on a

from developers and providing infrastructure that will benefit

leasehold basis, with the buyer having the ability to staircase

not just any proposed development but also the community

out and acquire the remainder of the equity, and the lender

at large) would all require the government to open its purse

having recourse to the remainder of the equity if they have to

a little wider – something that it is clearly adverse to do,

enforce in circumstances where a shortfall is likely.

especially as that purse may shrink after Brexit and the Health Service is clearly ahead of the queue politically. Whether

Once again this is something that should be taken out of

or not the observations we have made above (which are

the planning system. Beyond planning obligations which

incorporated in our response to the Consultation Team) are

set quotas for the provision of affordable rental dwellings

taken on board, we do not see any likelihood of any material

and shared ownership dwellings, if the government really as

amelioration of the current difficulties in housing supply from

serious about getting more people onto the housing ladder,

the proposed amendments.

they should look at funding for registered providers (and other bodies, including local authorities) to provide traditional shared ownership housing which can be sold in the market, and proceeds of the sale of the retained equity is released back to the registered provider, local authority or other body can then be recycled for future use in supporting home ownership or affordable housing.

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Reforming the NPPF | Notes from a parallel universe

Real Estate | Planning & Environment We provide planning services for a variety of clients – developers, landowners and other parties involved in the planning process. We also provide advice and services for ancillary matters, including highways issues and the registration of commons and village greens.

Our Team Neil Bucknell

Sara Hampson

Partner neil.bucknell@laytons.com +44 (0)1483 407 016

Partner sara.hampson@laytons.com +44 (0)1483 407 014

Paula Ghosh

Sara McKay

Solicitor paula.ghosh@laytons.com +44 (0)1483 407 046

Solicitor sara.mckay@laytons.com +44 (0)1483 407 000

Sue Irons Consultant sue.irons@laytons.com +44 (0)1483 407 011

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