Land Journal: March-April 2020

March/April 2020

6 On tap How the digital twin works for one water utility company

22 The sky’s the limit What hydroponics is doing for vertical farming

26 Grass roots Why hemp could represent an opportunity for UK farmers

rics.org/journals

Land

Make a splash 4

Why we should collaborate to manage water

LionHeart is here for the ones you leave behind too LionHeart is here for all RICS professionals and their loved ones whatever issues they face – whether that’s support through ill-health, a bereavement, work or money worries.

LionHeart is an independent charity and doesn’t receive any grant funding. We rely on donations to continue helping people just like you, when they need it most.

A gift to LionHeart in your will can make a real difference to the lives of future generations of surveyors and their families.

LAND REQUIRED Multiple site opportunities sought Investor backing secured • Southern England preferred • Edge of town, semi-rural or urban • 3 to 15+ acres - 70+ units & central facilities • Mid to high ageing population demographic • Close to transport links and external amenities • Planning secured for C2 usage preferred but not essential • Retained agents with fees negotiable

Would you consider leaving 1% of your estate to us in your will to help us make that difference?

To find out more, please get in touch with our fundraiser Carolyn McDonald on 0121 289 3300 or email cmcdonald@lionheart.org.uk.

Registered Charity No 261245 Registered office: 55 Colmore Row, Birmingham, B3 2AA

Contact David Sedman, Development Director david.sedman@rangeford.co.uk 07779 323211

www.rangefordvillages.co.uk

Land

Contents

The Land Journal is the journal of the RICS Environment, Geomatics, Minerals and Waste, Planning and Development and Rural groups Editor: Sian Morgan T: +44 (0)24 7686 8560 E: sianmorgan@rics.org Advisory group: Tim Andrews (Stephenson Harwood LLP), Kevin Biggs (consultant), Michael Birnie (Ernest Cook Trust), James Kavanagh (RICS), Philip Leverton (University College of Estate Management), Fiona Mannix (RICS), Duncan Moss (Ordnance Survey), Tony Mulhall (RICS), Marion Payne-Bird (Consultant),

4

20

Be it flooding or drought, chartered surveyors have the skills to manage water in collaboration with other professionals

Under-resourced authorities must take a more creative and nuanced approach if rural development is to ensure sustainable communities in the future

In deep

Landscape designation

5

Briefing

Michael Rocks (David J Powell Surveys Limited), Timothy Woodward (rural chartered surveyor), Rob Yorke (rural chartered surveyor) Published by: The Royal Institution of Chartered Surveyors, Parliament Square, London SW1P 3AD T: + 44 (0)24 7678 8555 W: rics.org ISSN 1754-9094 (print) ISSN 1754-9108 (online) Editorial & production manager: Toni Gill Sub-editor: Matthew Griffiths Advertising: Will Nash T: +44 (0)20 7871 5734 E: will@wearesunday.com Design & production: We Are Sunday Printer: Geoff Neal Group

6

Digital pipeline Northumbrian Water is using digital twin technology in its long-term planning to mitigate climate change 9

22

New RICS guidance outlines the issues that surveyors are likely to face when advising clients on electronic communications networks

A project in Scunthorpe is putting the practice of hydroponics and vertical farming to the test

Up to speed

Future food

24 10

Getting a promotion Promotion agreements are gaining popularity to help maximise land value

Successful succession Mediation can help with the vital yet tricky process of succession planning 25

While every effort has been made to ensure the accuracy of all content in the journal, RICS will have no responsibility for any errors or omissions in the content. The views

12

Floating an idea One Dutch company’s answer to land scarcity is to create a floating dairy farm

expressed in the journal are not necessarily those of RICS. RICS cannot accept any liability for any loss or damage suffered by any person as a result of the content and the opinions expressed in the journal, or by any person acting or refraining to act as a result of the material included in the journal. All rights in the journal, including full copyright

described. Any dispute arising out of the journal is subject to the law and jurisdiction of England and Wales. Crown copyright material is reproduced under the Open Government Licence v.3.0 for public sector information: nationalarchives.gov.uk/doc/ open-government-licence/version/3/

Copenhagen is planning a series of artificial islets made from recycled soil 26

14

Raking through the ashes Ash dieback cannot be ignored, but a range of guidance is available for those responsible for dealing with stricken trees

The next super crop If bureaucratic barriers can be dismantled then hemp could be a competitive option for UK farmers 28

or publishing right, content and design, are owned by RICS, except where otherwise

Island living

17

Justified margins

How and when will blockchain affect the sector for surveying professionals?

As practices vary widely, recent research for RICS offers some insight into estimating developer returns in the appraisal process

The dream of blockchain

18

Assessed test

30

Submitting properly researched environmental screening reports to Natural England can save time and money

Mineral Planning Authority guidance can help professionals safeguard resources

Marshalling our resources

rics.org/journals 3

Land

Opinion

Water

‘Surveyors have many of the skills needed to help society cope with the challenges that an excess or scarcity of water can bring’ Fiona Mannix Associate director, professional standards, RICS

Following the success of RICS’ inaugural water conference in 2018, a second was held in Leicester late last year. We had just witnessed severe flooding in the Doncaster area, with a resulting loss of life and many adverse impacts on people, businesses, livelihoods and personal property.

Chartered surveyors have a pivotal role to play in ensuring that both our built and natural environments are resilient to flooding. As professionals, we have many of the skills necessary to help society cope with the challenges that both an excess and scarcity of water can bring.

Some key messages from the conference concerned the following topics.

••The role of farmers and land managers: decisions made on farms directly affect water flow, water quality and water availability. What farmers and land managers can do was illustrated in terms of improving soil and soil cover management to reduce or slow the flow of water, increasing infiltration to recharge groundwater, and reducing diffuse pollution, for example by creating cover strips or planting trees along watercourses.

4 Journal March/April 2020

••Collection of water in reservoirs or wetlands: this will be essential to respond to fluctuations in supply and demand.

There will also be a need for investment with partners, for example other farms and water companies.

••Thinking about demand and supply: to cope with increasing population, water use will need to be more efficient. This will entail water efficiency labelling of products such as washing machines and dishwashers; improving the Building Regulations for water consumption; reduction in supply pipe leakage; smart metering; rainwater harvesting; water re-use; and, in particular, communications to encourage individuals and businesses to change their behaviour.

••Transportation of water: the water transportation network needs to be developed, and a range of new infrastructure schemes are being investigated.

••Resilience: definitions differ, with Ofwat saying resilience means ‘to cope with and recover from disruption … to maintain services for people and protect the natural environment’, while the Rockefeller Resilient Cities ethos is ‘to survive, adapt,

and grow no matter what kind of chronic stresses and acute shocks they experience’.

There is a need therefore to understand how resilience is being interpreted by different organisations.

••Systems thinking: this should be applied in a comprehensive review of resilience business planning, with a systems approach being taken to calculate a resilience score that supports governance at organisational level. Speakers highlighted that societal and community resilience are enhanced by organisational resilience, particularly when the organisation provides vital products and services to the public.

••The social contract and resilience: Speakers referred to the plan Bristol Water For All, which outlines the local utility’s purpose and social contract for providing excellent water services (bit.ly/BrisWtr4All).

••Reservoir and dam safety: this was in the public consciousness last year with the evacuation of thousands of residents around Whaley Bridge in Derbyshire, following damage to the wall at Toddbrook Reservoir and fears of dam failure.

••The benefits of sustainable drainage systems (SuDS): ‘pipes can’t solve all the issues’, said Chryse Tinsley, from Leicester City Council. She presented case studies of projects at different levels of maturity, neatly illustrating the role that SuDS can play in managing water flows.

Further developments in innovative flood alleviation through green infrastructure were also highlighted.

What the conference succeeded in doing was emphasising that there is no panacea in water management. Different regions will require different parties to take different approaches at different times of the year, forming partnerships with key stakeholders in some places.

Fiona Mannix is associate director, professional standards, land, at RICS fmannix@rics.org Related competencies include: Sustainability Further information: RICS Environmental risks and global real estate global guidance note (rics.org/envirorisk).

Briefing Entry route to profession under review

Institute urges water policy action Published late last year following flooding in the north of England, the Institute for Public Policy Research’s report Natural Assets North emphasises that a joined-up approach is needed to ensure that plentiful water resources do not run dry, and advocates action by policy-makers to ensure that future resources are safeguarded. bit.ly/IPPR-NAN

Money handling standard issued The first edition of the Client money handling professional statement has now been published.

It covers RICS members and RICS-regulated firms operating in the UK, providing clear requirements and advice to firms on: client account requirements; appropriate accounting controls; the information that firms must provide to clients; and how to handle client money, including rules for managing any unidentified funds. rics.org/cmh

RICS has begun a major review of entry to the profession, seeking an approach that supports people from all backgrounds, education levels and work experiences in becoming professionally qualified, and which continues to be market-relevant, robust, inclusive and trusted.

The review is being led by RICS’ Education and Qualification Standards team, supported and challenged by the organisation’s new Standards and Regulation Board. If you have feedback or insight that will help shape our thinking, we need to hear it. Ahead of a wider consultation later this year, thoughts and comments can be sent to the team at the address below. globaleqs@rics.org

Fire safety standards consultation open RICS is part of a coalition of more than 70 international organisations that has been developing the International Fire Safety Standards, supported by the UN and World Bank. Views are now invited to help shape the standards through a global consultation, and can be submitted online until 23 March. rics.org/firesafety

Events RICS Planning and Development Conference 2020 5 May, Cavendish Conference Centre, London rics.org/plandev RICS Rural Conference 2020 17 June, Royal Agriculture University, Cirencester Please register interest for early-bird rates. rics.org/ruralconference rics.org/journals 5

Land

Digital twins

Digital pipeline Using digital twins stands to be more successful when they are integrated into day-to-day working, as Northumbrian Water has found in modelling for climate change risk mitigation Nigel Watson

Like all water companies, Northumbrian Water faces a challenging future as it strives to ensure the resilience of services in the face of increasing urbanisation and climate change, which are starting to manifest themselves in some significant ways, including water shortages and flooding. To maintain resilient services, we need new technology, including digital twins.

A digital twin is a virtual replica of a physical entity.

Data is fed from that entity, such as a pump, to a virtual representation where it can be processed. This typically involves running simulations, often on a massive scale, to see what might happen in different scenarios. The output of this processing is either passed back to a human to make a decision – keeping the human in the loop – or it enables an automated intervention with the device itself, for instance changing the speed at which the pump is running, making a closed-loop system.

Water and waste-water networks are both complex systems. Something that happens on one node of the network can, and typically will, have a cascading effect across a large part of the network. Burst pipes usually occur for instance when there are significant swings in temperature, as there were at the end of 6 Journal March/April 2020

the so-called Beast from the East cold wave in 2018.

When such a burst occurs, we need to move quickly to maintain supply to our customers, some of whom may be extremely vulnerable. But we need to balance that against flood risk and traffic disruption.

There is complexity in this scenario and a human being needs to weigh up a lot of factors quickly before deciding how to intervene. For instance, water escaping from pipes could flood nearby properties and a road may need to be closed to carry out the repair.

We also think digital twins can benefit long-term planning. We are making asset investment decisions that often last 50 or more years. However, we are now doing so in the face of rapid climate change so we need to ask the following questions.

••How do we ensure we spend money most effectively?

••How will we ensure the water supply is reliable?

••How can we help to mitigate the likely impacts of sudden downpours?

Using climate models, we can work out where the stresses are likely to be in our networks. It is still a prediction, but we can make a much smarter decision with this approach. If we can combine this analysis

with the insight of our people – keeping the human in the loop – then we can improve the outcomes for our customers, the environment and our employees.

Why is Northumbrian Water investing in a digital twin now? Broadly speaking, cloud computing is the major enabler: running massive simulations in a timely fashion requires huge amounts of computer power, and in the past that was not economically viable. Now, we can rent the capability as and when we need it, so the business case makes sense.

Although we are mainly trying to solve problems in the water sector, there are parallels with others, particularly anything that is built or has moving parts.

To that end we are already working with the Centre for Digital Built Britain to define standards for sharing data. In the future, this will mean that we can easily share data on extreme weather events with Public Highways England, for example, which will mitigate the impact of events on our daily lives.

If we work together we should also be able to make better planning decisions. The UK faces the combined challenges of old infrastructure, a high population density, increased urbanisation and climate change, so it makes sense to invest in digital twins as a country.

How to build digital twins It is our firm view that digital twins need to be based on existing systems and data as much as possible. The insight provided by the twin needs to be integrated into key business processes, so it cannot be a whole new set of screens or reports. We therefore recommend: ••using data you already have before obtaining new data or fitting new sensors – you’ll understand this better, and it will be more readily available so the project can get moving more quickly ••using models you or partners already have and understand before you build more complex models – if you need a new model, ensure that it works before basing a twin on it ••aiming to embed the twin in business-as-usual processes and applications – it should be owned and used on a day-to-day basis by the people who run the process, not the team who built the model.

Having extolled the virtues of incrementalism, it is always important to start with the end in mind. That end might change over time, but we view this as our picture, with each component a piece in the jigsaw.

Figure 1 (overleaf) offers a view of our process.

As the model is built on data, it is important to start with a catalogue or inventory of the data you currently hold. Like most utilities we have a vast amount, mostly supervisory control and data acquisition (SCADA) data from our day-to-day operations. Three years ago we started collecting this and storing it in the cloud. We

Northumbrian Water Group ••Provides clean and waste water services in the North East of England and clean water services in Essex and Suffolk ••Serves more than 4.5m people ••Employs 3,200 staff and works with many partners

have an almost-live feed from our SCADA systems to the Microsoft cloud computing application, Azure.

We are still working out how we might use some of the data; but it is so cheap to store and, because the climate is changing, we plan to use it to examine trends over the course of time.

Note, though, that not all the data sources are ours.

The weather has a huge impact on our business. For example, during the prolonged dry spell in 2018, our customers consumed 25 per cent more water. Therefore, we make sure we have the best weather data we can get at the most granular level, because there is a strong correlation between that and our operational performance. We supplement this with government open-source data, on, for example, soil types, trees and farmland usage.

In the modelling layer of the twin, we work on solving the business problems atomically. For example, we have a model that predicts when a pipe is likely to burst, which we use to prioritise our mains replacement programme. This model takes in data about pipe age and material, soil composition, vehicle traffic flow – given that heavy traffic can have an impact on pipes below the road – and so on. Over the years, we have learned the mathematical correlation between these factors and the incidence of bursts. That said, we are always testing our assumptions: our networks are physical rather than digital, so we cannot assume that they will remain static.

Our equipment suppliers help with this process by providing models of their own. For example, our pump manufacturer tells us how this equipment should behave under normal operating conditions, giving information about the volume of water it should pump, how much energy it should use and the temperature at which it will run. This information comprises a digital twin in its own right. We do not need to recreate it, we only need to understand and provide the context in which we have deployed it by linking it to the digital twin of our network.

As such we can use a series of linked twins with common standards, where the output of one twin becomes the input of another. This keeps the individual rics.org/journals 7

Land

Digital twins

Figure 1. Examples of potential individual twins that could be integrated in Northumbrian Water’s system

DATA

MODELS

OUTPUTS

Siemens pump model Model D pump health or efficiency Reference data Northumbrian Water asset performance models Model A1 water pumping

Reference data

Northumbrian Water application data Telemetry

Shared data

Model A2 water treatment

Model A3 water storage Decision support and visualisation

Asset failure and maintenance activity

Newcastle University hydraulic models Model B catchment

External data Weather

Reference data

Model C water supply

Data & Analytics Facility for National Infrastructure resilience models Model E climate change

Reference data

Model F risk

Real-time decision support

Longer-term planning decision support

twins simple and flexible, while allowing the whole system to be optimised. A pumping station twin could therefore be integrated with manufacturers’ twins for each pump, enabling more complex scenarios to be modelled – for example, the impact that different power optimisation plans would have on pump life, which would inform calculation of the lowest total cost of ownership.

Different types of models Not all our models are of equipment. We are working on a customer digital twin in response to a new business objective to eliminate water poverty by 2030. We estimate that about 20 per cent of our customer base meet the criteria of being water-poor, that is households spending more than three per cent of their net income after housing costs on water, so we built a water poverty model that enables us to target where we need to intervene with offers of additional support, different tariff models and so on.

Each of our models solves a business problem.

However, we operate two complex systems – a water network and a waste-water network – so our twins need to work together, with the models interacting and correlating. In the physical world, these manifest themselves as physical, biological and chemical processes, whereas in the digital twins they become mathematical, sometimes to a complex degree.

As an example of the way our models interact, our burst model that helps us to predict which pipes to replace is being enhanced to consider flooding. This will help us to prioritise the replacement of mains pipes by considering not just the risk that they might fail but taking into account the impact on the local community.

It’s important the twins are incorporated into the business-as-usual operation of the asset or system. We need to put the insights into the hands of the people making the day-to-day operational decisions. We also need to get used to using this on an everyday basis, not just when we have an incident, so we are confident in its predictions and are familiar with acting on the basis of its recommendations.

Nigel Watson is chief information officer at Northumbrian Water nigel.watson@nwl.co.uk Related competencies include: Big data, Legal/regulatory compliance, Smart cities and intelligent buildings

8 Journal March/April 2020

Land

Interview

Up to speed Surveyors in the UK advising clients on networks and installations under the Electronic Communications Code need to familiarise themselves with legislative changes and new technology. New guidance from RICS will help them do so Sue Doane and Mark Talbot

Q: What prompted the preparation of the Surveyors advising in respect of the Electronic Communications Code guidance note?

SD: The sector has seen a dramatic growth in new technology and demand for digital communication services. Professionals in this sector need a clear framework in which to operate. This is the first RICS guidance note on telecoms, so surveyors have been without much guidance since about 1984.

MT: It’s important that professionals recognise the legislative changes to the Electronic Communications Code (ECC) made as part of Schedule 1 of the Digital Economy Act 2017 and incorporated into Schedule 3A of the Communications Act 2003, and are not blindsided or ignorant of them, so education is still a priority.

The telecoms area has become more complex since the ECC revisions came into force in December 2017. The principle is to acknowledge that digital communication is a major economic and social enabler. The government’s objectives in making the revisions were to: ••bring down rents to align with those for other utilities ••enable infrastructure networks to be rolled out

••ensure that dispute resolution is less time-consuming.

Q: What are the issues for surveyors in the telecoms market?

MT: There is a demand for new technology, but some areas still lack access to current technology. There are still so-called not spots with no fibre broadband or a reliable mobile signal. Infrastructure is a major issue for the UK economy, and surveyors are required to advise in areas where currently legislation is driving the market through the courts, as parties seek clarity on various aspects of the revisions.

SD: Two key issues are the rapid change in technologies, and the way these affect long-established practices in land and property. The basis of valuation has significantly changed, for instance, so people practising in this sector for many years now face an entirely different way of working, and they need to be aware of this.

Q: How can surveyors influence negotiations in the sector?

MT: They should ensure they are up to date with developments and give clear, objective advice to clients. Engagement is the word: we have to talk to one another.

Good conduct and ethics apply to everyone in this sector. We must get away from the conflict of the past

SD: They should keep abreast of technological change and evolving law, and recognise there does not have to be conflict between operators, infrastructure providers and landowners. Professionalism should be at the heart of what they do.

Q: How is legislation changing the telecoms market?

MT: It is being interpreted in different ways by different parties. The courts, in the form of the Upper Tribunal and the Court of Appeal, have been used to help set precedents where there is uncertainty.

SD: People were previously unwilling to go to court, because it is difficult and expensive. But we are now seeing a dynamic response to legislation and getting clarity – and it’s good that people are prepared to do that. However, it must be proportionate and approached in a professional way. Not every matter should be referred to court, and this approach shouldn’t be used to frustrate the legislation.

Q: How will the guidance note help?

SD: It reaffirms the need to remain professional regardless of RICS membership – good conduct and ethics apply to everyone. We must get away from the conflict and the poor behaviour of the past.

MT: While the revisions clearly bring change, we need to go back to basics, breaking down the rights sought, and the rights granted objectively to ensure that clients are appropriately advised in respect of, for instance, the valuation approach. You might not like it, but you have to do it.

Sue Doane FRICS is an industry consultant sue.doane@outlook.com Mark Talbot FRICS is partner and head of telecommunications at Carter Jonas mark.talbot@carterjonas.co.uk Related competencies include: Access and rights over land, Legal/regulatory compliance, Valuation Further information: The effective date of RICS’ Surveyors advising in respect of the Electronic Communications Code first edition guidance note is 14 November 2019 (rics.org/electroniccommscode). rics.org/journals 9

Land

Promotion agreements

Getting a promotion For landowners looking to maximise the value of land for sale, promotion agreements are becoming a more attractive choice

Caroline Irvine

Landowners thinking about selling a plot may consider obtaining planning permission on it, which usually increases the value to any prospective purchaser. A promotion agreement can be advantageous in this potentially risky process.

In the context of property transactions, a promotion agreement is most commonly used when there is medium- or long-term planning potential for the land. These types of agreement between a landowner and a promoter – usually a developer – involve the owner putting forward land for development, with the promoter under an obligation to present it in the best possible light to obtain planning permission.

Once permission is granted, the promoter will direct the landowner to market the property to a developer and take their cut of the sale price. Where the promoter is also a developer, costs can be saved because the same organisation is looking to market and secure planning permission.

Either way, the costs, and consequently the risk, of promoting the land lie with the promoter in the first instance, but are then repaid when the land is subsequently sold.

This way of working can give landowners more security as their best interests are firmly aligned with the promoter’s; both aim to get the best possible price for the 10 Journal March/April 2020

land. Often lasting many years, promotion agreements are generally used for larger, more strategic development sites, but they can be applied to a range of land packets.

Be prepared Confidence in the saleability of the plot is key since landowners may not reap the benefits for several years after the exchange of the agreement. Before entering into such agreements, it is crucial to prepare for all eventualities to prevent getting caught out further down the line.

With land being such a rare commodity, every landowner’s worst fear is being stuck in an agreement that turns their asset into a burden. When negotiating the terms of a promotion agreement, all parties should agree a long-stop date – that is, the point when the agreement comes to an end. This timescale should take into consideration

time for any planning appeals that may arise. It is important to remember that while a promotion agreement is in place, a landowner’s ability to sell or mortgage it can be limited – something that must be a central consideration when deciding on a long-stop date. Timescales vary, but agreements often last around three years.

For landowners who want to mortgage their land, having a clear understanding of the types of restriction associated with the promotion agreement can help boost their position before making a commitment, and it is therefore essential to check the way the agreement is drafted. Some banks will not lend on land where a promotion agreement is in place, so it is advisable to raise these concerns with the bank before entering into any promotion agreement.

An agreement can also affect the planning process and, by its very nature,

Ultimately, the aim of a promotion agreement is to maximise the landowner’s chance of receiving the best possible offer for their land

the level of involvement that a landowner has throughout it. Establishing your expectations at the start can result in more transparency. If you are keen to be involved in all stages of the process – including overseeing all correspondence, whether from the local authority or anyone who has commented on the application – it is important to make this clear to the promoter from the outset. As with all agreements, communication is key.

Ultimately, the aim of a promotion agreement is to maximise the landowner’s chance of receiving the best possible offer for their land. Sometimes, they will only find out how successful they have been at the final stage; for example, planning permission may only be granted for two houses instead of the ten for which the landowner might have applied.

However, if there is an agreement in place then this must be honoured, and the promoter gets a cut regardless. Avoiding this shortfall is simple, though – by suggesting to the promoter the exact type of planning permission they have in mind for the sale of the land, landowners have more control.

To help guarantee that they get the offer they want, landowners can set a minimum price in the promotion agreement, and

they do not then have to settle for less.

As with any legal work, they should be wary of the small print and keep an eye out for any clauses in the agreement that require landowners to sell their land if the minimum price is achieved. This is important, as it can be detrimental to any forecast profit margins.

Right of appeal Among other things, landowners should consider the possibility that their planning application may be refused. If this happens, and if they want the promoter to appeal on their behalf, that can be set out in the promotion agreement. It is important to note that only the person who made the application can appeal a planning decision; other parties are simply permitted to comment on an appeal.

To maximise the chance of success, applicants should respond to planning decisions as soon as possible. The deadline to appeal is within six months of the date on the decision notice from the local planning authority, so it’s critical to have regular communication with the promoter.

Alternatively, there is a possibility that a developer may submit a further application and get planning for more houses. This will increase the value of the land before

it has been developed, resulting in a larger overall profit for the developer once all the houses have been bought and sold. If this happens then landowners may consider entering into an overage agreement, which would entitle them to a proportion of the developer’s additional profit.

In a legal context, overage refers to an amount exceeding a certain sum or quantity, and such an agreement is commonly dubbed an anti-embarrassment provision; it could include, for example, securing the rights to any uplift in future value of property or land.

In most cases, the provisions allow a seller to share in the increase in land values resulting from obtaining planning permission or from a use of the property and land different to the one at the time of the original sale. It is important to understand that overage clauses don’t apply to any increase in property prices resulting from unpredicted market forces.

For landowners looking to sell off part of their portfolio, an overage agreement may have a significant role in the success of a future sale. In the complex world of property disposals, all parties involved must consider the importance of clauses that safeguard the seller’s right to their share in the future value of the land or property, and an overage agreement can enable that.

Since most property arrangements could involve an element of overage, it should be agreed and annexed to the promotion agreement before it is finalised. For an overage payment to be made, a trigger event must occur first – such as the grant of planning permission or sale of the land with the benefit of a new planning permission by the developer.

With clear understanding from both parties, promotion agreements can be a satisfactory way to provide developers and landowners with security and maximise financial opportunities, regardless of what the future holds.

Caroline Irvine is a commercial property partner at Shakespeare Martineau caroline.irvine@shma.co.uk Related competencies include: Planning and development management rics.org/journals 11

Land

Future farming

Floating an idea With land at a premium, one Dutch company has taken the innovative step of creating a sustainable floating farm

Minke van Wingerden

12 Journal March/April 2020

Q: What is the floating farm?

MvW: In May last year, 32 cows boarded a new floating home in Merwehaven, Rotterdam. They have now settled in and are providing milk, yogurt and other products in an on-site shop.

Q: What problem were you trying to solve?

MvW: The problem was a lack of arable land. Sea levels are rising and land is flooding, so we started looking into using the water as a place to produce fresh food.

The farm is also about making citizens more aware of food production, and that it’s not ecologically sound to throw food away. In addition, if you produce locally you consume locally and reduce food miles. Another theme is applying the principles of the circular economy in the city to see just how sustainable we can be.

Q: Was sustainability important to you?

MvW: We have tried to make the project as sustainable as it can be.

Our initial idea was to use LEDs to grow duckweed or grass fodder on the floating farm for our cows. We researched it with Philips, but soon realised we would never be able to produce enough and it would be prohibitively expensive.

Instead we looked at re-using residual products – we don’t call it waste – from the city, and now we feed the cows beer broth from a local brewery, potato peel from a crisp factory, bran from a local windmill and grass from golf courses and sports fields in our area.

We want to create a circular economy around the farm. We also use electric cars to pick up the food.

Q: Can you describe the farm and how it works?

MvW: The floating farm is on three layers, with the cows on top.

A robot collects their manure, which is dropped down to the level below, where we separate it into in dry and wet. When we started, we re-used the dry part of the manure as bedding for the cows; however, we now have rubber mattresses for them, which are easier to keep clean. We are also working with Delft University of Technology to create fertiliser from the manure to sell on. We separate the salt and minerals from the urine and water and we are working towards treating and then re-using the water on the farm.

We also use floating solar panels next to the farm, while on the roof we collect rain, filter it, and use it as drinking water for the cows.

Q: Are there any issues with having cows on the water?

MvW: Animal welfare is a priority for us, so we have a small meadow next to the floating farm and the cows can wander in and out of it. Nevertheless, research shows that it’s not necessary for their welfare; all they need to be healthy and happy is sufficient space, a clean and flexible floor, water, and food.

Q: What challenges have you encountered?

MvW: We had some of the usual teething troubles; for example, the wind sometimes blows the fodder off the conveyor belt so that it is not deposited in the trough. The fodder falling in stalls also disturbs the manure robots. But we’re working on the solution to this, which is to have external screens that protect the fodder from the wind.

Q: What’s next for the floating farm?

MvW: We are already talking to Asian countries to see where our next farm might be sited. It would be bigger, as the concept is easy to scale up. It was a coincidence that we started with cows, but I think it was useful as it brought us a lot of media attention.

However, we have already designed a floating chicken farm and a vertical farm to grow vegetables and herbs.

IMAGES © FLOATING FARM

Q: Who have you been working with?

MvW: We made it happen thanks to more than 40 partners, who have provided knowledge and skills as well as practical help and equipment. It’s amazing to see lots of farmers, who started as sceptics, become enthusiastic ambassadors.

We currently have 35 cows, but we can easily expand that number once we are fully operational. We imagine that there will be a hybrid system, where there are still dairy farms on land combined with some floating farms. We also have a team of eight, including a farmer, someone in the dairy, and a host for educational visits.

People can come in and buy their produce direct from the shop and visit the farm at the same time.

Minke van Wingerden is partner at Floating Farm, Beladon minke@floatingfarm.nl Related competencies include: Agriculture, Energy and renewable resources, Sustainability rics.org/journals 13

Land

Trees

Raking through the ashes Those responsible for land are obliged to deal with any ash trees suffering from dieback, but can rely on an increasing range of guidance to support them John Lockhart

14 Journal March/April 2020

IMAGE © ANDY POYNTER

Chalara ash dieback, commonly referred to as ash dieback, is a serious disease killing trees across the UK. It was first officially reported Europe in 2012, although it is thought to have been in the UK from around 2004.

In an article a couple of years ago (Land Journal June/July 2018, pp.6–8), I outlined the emerging planning and budget allocation that being implemented in some of the areas worst affected by ash dieback. In particular, I highlighted work being carried out in Devon, where the local authority anticipated net expenditure in the region of £26m to deal with the issue.

Since then the Tree Council has developed a toolkit for managing ash dieback (bit.ly/TCdieback-tk), and has worked to raise awareness across the country with a series of workshops, principally aimed at local authority tree officers and financial officers.

The Department for Environment, Food & Rural Affairs’ Ash Dieback Health and Safety Task Group meanwhile continues to work with key parties to develop clear guidance. Recent documents from the Forestry Commission and other bodies are also helping to develop our understanding of this disease and how landowners and managers need to respond.

Ash dieback primarily affects the common ash tree Fraxinus excelsior, and is caused by the vascular wilt fungus Hymenoscyphus fraxineus, initially known as Chalara fraxinea. It is often compared with Dutch elm disease; both affect trees in a similar way, but the way they are spread is different, with Dutch elm disease carried by the elm bark beetle of the genus Scolytus and ash dieback spread through the air by fungal spores from the central leaf stalks on the previous year’s fallen leaves.

No one is certain whether all ash trees will die, but experience from mainland

Europe where the disease has been present since 1992 suggests that most will decline or die over the next ten to 15 years. Currently, the fungus affects most of the UK as shown on the Forest Research Distribution map (bit.ly/chalaramap), which illustrates the spread of the fungus and those areas identified in 2012 that still have living ash trees.

There is anecdotal evidence that younger trees seem more susceptible, with older and larger trees lasting longer, but this does not mean they are resistant; it simply means the death of the tree takes longer with increased stem diameter.

Many trees that fall or shed limbs appear to have a secondary pathogen, such as shaggy bracket (Inonotus hispidus), honey fungus of the genus Armillaria, or giant ash bracket (Perenniaporia fraxinea). These are not new but are taking advantage of trees stressed by ash dieback, which are increasingly susceptible to additional pathogens and succumb more quickly.

Ash trees support 955 species of flora or fauna, of which 45 are exclusive to ash, and thus vulnerable to the loss of their host

The ash is the third most common broadleaf tree in the UK. Its vigorous nature has contributed to its success, and undoubtedly some have established themselves in less-than-ideal locations, but they are a commonly recognised species and integral to the landscape.

As a staple forestry species, it is a valuable hardwood that grows well on a range of soil types, and its timber has a wide variety of uses. Ecologically, ash trees support 955 species of flora or fauna, of which 45 are exclusive to ash, and thus extremely vulnerable to the loss of their host. Ash trees are currently integral to green corridors used by a variety of wildlife.

Research by a team from the University of Oxford, Food and Environment Research Agency Science, the Sylva Foundation and the Woodland Trust published last May has calculated the true economic cost of ash dieback to the UK is estimated to be in the region of £15bn, with half of this over the next ten years, principally related to management and replacement costs.

Any person or organisation occupying land or property has a common duty of care under the Occupiers’ Liability Act 1957 to take all reasonably practicable precautions to ensure the safety of trees on their land.

Breaches of this duty could lead to a civil suit for damages. One of the critical issues for land managers therefore relates to let rics.org/journals 15

Land

Trees

land and property. Tenancy agreements, in particular farm business tenancies, vary, so it is important to identify the duty holder and ensure that they are aware of their responsibilities in this regard.

There are also statutory duties under the Health and Safety at Work etc. Act 1974 and related regulations to do all that is reasonably practicable to ensure that people are not exposed to risks. Understanding the impact of the disease on the structural stability of the trees and the safe working methods needed when dealing with them will be critical as the pressure on contractor resources increases.

Ash management framework Anyone with responsibility for ash trees needs to understand the issue and tailor a practical and robust response to individual circumstances and client requirements. The consultancy Lockhart Garratt uses a sensible and understandable framework, as follows.

••Resource assessment: collect the data, using technology as appropriate, to identify and understand the resource and its context, from roadside trees, urban trees andprivate gardens to large-scale commercial woodland.

Drones and remote sensing are among the new technological approaches to data collection. It is likely that data will be collected in conjunction with any existing tree risk management strategies and associated survey works, following National Tree Safety Group guidance.

••Approach: develop a bespoke approach to reflect any critical objectives; for example, attitude to risk and the context and scale of the issue will be very different for large organisations such as Network Rail compared with a hill farmer in Yorkshire.

It is likely that only a proactive approach will ultimately be defensible.

••Compliance: consider the relevant legislation and associated constraints, including – but not limited to – felling licence requirements, tree preservation orders, planning consent and conditions and European protected species designations.

••Execution: the arboricultural and forestry sectors are developing working protocols that will support the safe execution of any works on declining or dead ash trees.

In most instances, the advice is that 16 Journal March/April 2020

mechanised felling or elevated platforms will be required. Further guidance on safe working with dead ash trees is provided by the Forestry Industry Safety Accord.

••Replanting: it will be important to recognise the massive impact that ash loss has on the landscape and to replant as soon as possible, learning from the past and integrating diversity and resilience; suitable replacement species might include alder, aspen, rowan, hornbeam, lime, sycamore, walnut and wild service.

There are numerous useful guidance and information notes including the Forestry Commission’s guidance operations note 46, the Tree Council’s Ash Dieback Action Plan Toolkit, and guidance for sites of special scientific interest from Natural England and the Forestry Commission. Most recently, the commission has published operations note 46a for ash trees outside woodlands, as well as the excellent Royal Forestry case study note, all of which give a range of practical approaches.

Recent reports note that DNA research could offer some hope of developing strains of ash tree that could be resistant to the disease. Scientists have established which genes are important for resistance and hope that this will be the foundation for breeding more resilient strains in the future.

On another positive note, scientists at the John Innes Centre in Norwich have discovered that the European ash has moderately good resistance to the emerald

ash borer beetle (see photo, above) that has devastated the tree in North America, and which many were fearing would finish it off in the UK. While not immune, it is likely that healthy ash trees in the UK would not be severely damaged by this pest.

Additional threats Sadly there are many other threats to Britain’s non-woodland trees in addition to ash dieback. In particular, the bacteria Xylella fastidiosa has caused significant loss of olive trees in Italy and is now moving across the continent and mutating to acclimatise to colder latitudes; it is known to kill a wide range of trees and shrubs, including some of the UK’s key species.

The oak processionary moth has also been in the press, and while this does not affect the trees directly the public health implications can be severe; for instance, the hairs of oak processionary moth caterpillars cause severe allergic reaction in some people. Further details on all tree pests can be found on the UK’s Plant Health Risk Register (bit.ly/UKplanthealth).

John Lockhart FRICS is chair of Lockhart Garratt environmental planning and forestry consultancy john.lockhart@lgluk.com Related competencies include: Management of the natural environment and landscape Further information: bit.ly/LGashdieback

Land

Technology

The dream of blockchain Does blockchain live up to the hype, and how and when will it affect surveyors in the land sector?

Dr Nigel Mehdi

Q: Why did RICS publish an insight paper on blockchain, and what should surveyors know about the technology?

NM: It’s important surveyors realise that this technology could mean big changes for the profession in the future. The extent of those changes is not yet fully understood by the sector or by other professions.

Blockchain is a general-purpose technology that could transform society, in the way electricity, the car or the internet did, but we don’t quite know how yet. It could change the way we do business and the way transactions work. If it is adopted widely then there will be changes, because the brokerage and the real-estate part of the profession is largely transactional.

Q: Is adoption of blockchain technology currently an issue?

NM: It’s hard to adopt. It’s quite costly to implement, and if you have an existing system that works why would you change it? There has to be some significant benefit in taking it on, not just the boosterism of the technology companies. There’s a history of technologies that never reach

the implementation stage. If you back the right one it will pay off. We don’t know yet which category blockchain is in.

Q: What is the timeline for this?

NM: It’s different for different types of impact. But the earliest that things might happen is still five or so years away – and some things that are furthest away may not happen until 2040–45. So we are talking a few decades, not a few months or years.

The problem with these predictions is that we don’t know how quickly all the necessary pieces will come together, and at that point things could happen quickly.

Think of the statement attributed to Thomas J. Watson, chair of IBM, who said in 1943 that he thought there was a world market for ‘maybe five computers’.

Q: What are the advantages of blockchain for RICS members?

NM: The great promise of blockchain is to remove a central, trusted intermediary.

In the case of land transactions, the land registration is relied on because there’s a central registry in most countries.

The problem with these predictions is that we don’t know how quickly all the necessary pieces will come together

If blockchain were to allow that intermediary’s role to be diminished or removed, then we could make a transaction without it. Most people transact between each other using a bank as the regulated, trusted intermediary. The dream of blockchain is to remove that intermediary so that two people can transact with technology ensuring trust.

But there are some issues about regulation. The dream of an unregulated finance system will not go down well with governments and people who require stability in the economy. Blockchain’s main use at the moment is in cryptocurrencies such as Bitcoin, but fortunes have been made and lost through market fluctuations.

This isn’t good for professionals who want reliability for their clients. The professional or firm is a trusted intermediary because they can value a property, and people rely on that valuation because RICS is the regulator and the profession is trusted.

The thing about the property profession is that there’s always a physical property involved. We still need to verify its condition as part of the transaction, and this is nothing to do with blockchain. Some areas of surveying will not be affected by blockchain but others will. Those surveyors who, like lawyers and accountants, are involved much more in the documentation process may feel blockchain’s effects first.

Blockchain offers potential for smart contracts as well, which could affect facilities management, another big area of property. All the transactions involved from the supply chain, light bulbs and toilet rolls, coffee and even maintenance of the building could easily benefit from being recorded on blockchain. There’s an opportunity, but practitioners must be nimble and technical.

Dr Nigel Mehdi FRICS is a departmental lecturer in sustainable urban development at the Department of Continuing Education in the University of Oxford nigel.mehdi@conted.ox.ac.uk Related competencies include: Cadastre and land administration, Procurement and tendering, Property management, Purchase and sale Further information: rics.org/research rics.org/journals 17

Land

Environmental impact assessment

Assessed test If you are proposing to make changes to rural land, be sure you submit the right information to Natural England as part of the environmental impact assessment screening or consent decision, to avoid fines or a criminal record

Matthew Powell

The Environmental Impact Assessment (Agriculture) (England) (No.2) Regulations 2006 protect our environmental heritage from damage by agricultural intensification.

Before May 2017, applicants only had to provide basic project information to Natural England, which then gathered the evidence and consulted interested parties, such as the county archaeologist, local wildlife trust and the local biodiversity records centre, before deciding as to whether it needed to be screened under the regulations.

A screening decision is effectively a filter that decides whether a proposed project falls under the regulations or not. If it is screened in, the project is likely to have a significant impact on the environment, and it requires a greater level of assessment.

There is a general misconception that the screening decision is a permission, but it is not. However, on 16 May 2017, the 2014 revision to the directive was implemented, since when land agents or advisers have had to carry out research before submitting screening applications to Natural England.

Who needs to apply?

The regulations only consider agricultural projects that either increase the productivity of semi-natural or uncultivated land, even to levels below the norm – generally what would constitute being agriculturally improved land for the particular area of the project – or restructure rural holdings. Semi-natural land is defined as a priority habitat under section 41 of the Natural Environment and Rural Communities Act 2006, an area used 18 Journal March/April 2020

Table 1. Thresholds under Schedule 1 of the 2006 Regulations Project

Non-sensitive area

Sensitive area1

Semi-natural or uncultivated land improvement project

2ha

2ha

Restructuring involving addition or removal of any boundary, excluding hedgerow removal2

4km

2km

Restructuring involving the addition, removal or redistribution of a volume of earth or other material related to land

10,000m3

5,000m

100ha

50ha

Restructuring involving an area of land

1 Sensitive areas include national parks, areas of outstanding natural beauty, the Broads, and scheduled monuments.

2 Removal of hedgerows are covered by the Hedgerow Regulations 1997 SOURCE: ENVIRONMENTAL IMPACT ASSESSMENT (AGRICULTURE) (ENGLAND) (NO. 2) REGULATIONS 2006

by significant numbers of section 41 species such as breeding or wintering waders, or as land that includes regionally and nationally important archaeology and landscapes of material value such as historic parkland or designed landscapes.

Uncultivated land should not have been cultivated physically or chemically in the previous 15 years. This definition includes but is not restricted to: ••activities that disrupt agricultural soil, such as ploughing, some forms of harrowing, subsurface harrowing, discing and rotovating ••chemical treatment through the addition of organic and inorganic fertilisers or soil improvers, or use of broad-spectrum pesticides or herbicides.

Some priority habitats and associated land may require low levels of management such as priority grasslands, and this is not counted as cultivation. For the purposes of the regulations, Natural England does not consider that land under habitat creation options in agri-environment schemes is semi-natural until at least 15 years after the last cultivation, excluding the low levels of cultivation mentioned above.

Land is also deemed to be uncultivated if evidence or records to prove cultivation were submitted with the screening application. By default, land is uncultivated unless proven otherwise.

The thresholds applicable to the regulations are shown in Table 1. It is unacceptable for a landholder to misuse

these thresholds to intensify the use of uncultivated land or a semi-natural area larger than 2ha on a gradual basis. Likewise, they cannot restructure small areas or claim that work in excess of the threshold is made up of two or more sub-threshold projects.

In each of these cases Natural England views work as a single project that needs consideration and may require consent, even if a landholder carries out the work gradually over a protracted time or it involves different activities aimed at increasing the productivity of the land, such as ploughing in one area, and increased use of fertiliser or drainage in another.

The three stages most relevant to applicants are as follows.

••Screening decision: first, the project is screened to see whether it is likely to have a significant effect on the environment.

If it does not, the project can continue; if it does, it must receive consent before proceeding. Screening is not permission, but determines whether a project falls within the scope of the regulations.

••Scoping opinion: if a project does fall under the regulations as a significant project, an application can be made to Natural England for a scoping opinion on the environmental statement that will be required; this reduces wasted time and effort, and the expense of providing irrelevant information. Where a scoping opinion is requested, the ensuing environmental statement must take all of its requirements into account.

••Consent: when applying for consent, the environmental statement sets out the impact and the steps taken to mitigate it.

Natural England will consult the public and make a decision. Consent is granted, granted with conditions, or refused.

Applicants can appeal to the Department for Environment, Food & Rural Affairs at the screening decision and consent stages.

What is required for screening?

The screening decision is the main part of the process. When applying you must complete the form relevant to your project and supply an environmental screening report, in which you must set out the what, where, when and how of the project.

You must also, as a minimum, submit

environmental information including, but not limited to: ••archaeological information from the county archaeologist, including the significance of any historic environment features in the project area ••biodiversity information from the local environmental records centre or wildlife trust, including whether there is a county wildlife site ••other consultations with relevant bodies, including the local lead flood authority for drainage-related projects and the Environment Agency.

Applications without the minimum information will be rejected until it is provided. You can also submit additional information, such as field surveys and archaeological reports, if they enable Natural England to rule out particular effects. The agency’s default position is not to make a site visit, but it reserves the right to do so where it deems necessary.

When determining an application for a screening decision, Natural England will rely on the applicant’s information. If there are any gaps in this, or if the application does not clearly explain how it can mitigate the effects of the project, it will consider the project to be significant and screen it in to the next stage of the process.

It is thus vital you supply sufficient information to rule out any potential effects: the more relevant information you provide, the more likely it will be to rule out an effect. If no amount of mitigation could prevent the effect, Natural England will inform the applicant in its decision that the project is unlikely to be consented.

What happens if there is a breach?

There are offences under the regulations that range from beginning a project without

a decision or providing false or misleading information to procure a decision. The usual penalties include being required to restore the land to a good environmental condition – that is, its state immediately before the project began – either through a voluntary enforcement undertaking or a remediation notice. Where a project has begun without a decision, Natural England can serve a stop notice, and has powers of entry to ascertain whether a breach has taken place or serve a relevant notice.

Natural England will try to help anyone who is in breach to comply with the regulations; however, that may be by serving notices. It also has a duty to report any breaches of the regulations to the Rural Payments Agency, because Good Agricultural and Environmental Condition 6 on maintaining the level of organic matter in soil, from The Guide to Cross Compliance in England 2016 (bit.ly/xcompGAEC6), is applicable to the regulations. This may result in a sanction against all payments received by the business from the agency.

In highly significant cases or where there is continued non-compliance, Natural England may prosecute. If successful, this can lead to a criminal record, an unlimited fine and a requirement to restore the land to good environmental condition.

Matthew Powell is the protected areas senior adviser for the 2006 Regulations at Natural England matthew.powell@naturalengland.org.uk Related competencies include: Agriculture, Environmental management, Legal/regulatory compliance Further information: The Environmental Impact Assessment Helpline offers the latest information (bit.ly/EIAhelp).

Screen test ••Since 2006, Natural England has assessed 2,157 screening applications.

••Only 172 screening application have been screened into the regulations, requiring a consent decision.

••Natural England has received only 12 consent applications.

rics.org/journals 19

Land

Rural planning

Landscape designation Under-resourced authorities are refusing rural development for fear of compromising designated areas, but must take a more creative and nuanced approach if communities are to be sustainable

Judith Norris

At the RICS Planning and Development conference last year, Matthew Taylor – the author of the 2008 review of the rural economy and affordable housing – responded to a question about the difficulty of obtaining planning permission for both residential and commercial development in small rural communities, saying that all the tools to allow this are now found in the National Planning Policy Framework (NPPF).

My day-to-day observation, having worked in the rural sector for many years, suggests that despite three iterations of the NPPF since 2012 there are still many planning issues to overcome, and little progress has been made in understanding sustainability and development in rural areas. The challenges that remain include the way in which policy is interpreted, the lack of regional planning, and – more controversially – the impact of landscape designations.

The Country Land and Business Association (CLA) paper Sustainable Villages— Making Rural Communities Fit for The Future points out that planning authorities deem more than 2,000 villages across England unsustainable (bit.ly/CLAStrFdns). The CLA argues, however, that planning authorities do not include broadband when considering the sustainability of a settlement, yet Ofcom has identified that people in rural areas use the internet more than their urban counterparts. Internet access reduces isolation, opens up access to many services including banking, shopping and education.

20 Journal March/April 2020

Many local plans list these more remote, less well-serviced settlements as unsuitable for new housing or other development, meaning they are condemned to decline. This approach completely ignores the NPPF statement that ‘where there are groups of smaller settlements, development in one village may support services in a village nearby’. It also overlooks the comment elsewhere in the framework that ‘sustainable transport solutions will vary between urban and rural areas, and this should be taken into account for both plan-making and decision-making’ (bit.ly/UKNPPF2019).

These more positive policies are also overlooked by planning inspectors when examining local plans and making decisions. The Planning Inspectorate is in disarray, lacking inspectors who have a rural focus and some appeals lasting years, so little help is available.

The Planning Inspectorate lacks inspectors with a rural focus, so little help is available from there

In one sense Taylor is right; the NPPF supports rural development, but the interpretation of it is dogged by a lack of understanding of the way that rural communities and their economies work. The CLA paper refers to ‘social capital’, which is defined as the network of relationships among people who live and work in a particular society, enabling it to function efficiently.

This is often a feature of rural settlements, and a fundamental determinant of sustaining social capital is the availability of affordable and market housing.

The countryside contributes about a fifth of England’s total economic activity from many sources: some minor, such as the farmer who owns a relatively small area but rents other land to run a sheep flock that provides just about enough money to live; others much larger, such as Glyndebourne opera in the South Downs National Park that contributes about £16m each year to the area.

Designated and undesignated areas Landscape designations such as areas of outstanding natural beauty (AONBs) and national parks exacerbate an already difficult set of circumstances. Preparation of local plans is supposed to follow the NPPF, so the temptation is to put as much development as possible away from designated areas. However, this leaves gaps in rural communities in terms of housing and commercial development, while the undesignated areas are on the receiving end of often indiscriminate bulk housing, commercial development, Travellers, mineral and waste planning and renewable energy projects.

My recent experiences of projects in the South Downs have been dispiriting. A modest plan to develop 12 bespoke holiday lodges in the national park, which is short of tourist accommodation, took four years to get through the system, with the application costing about £100,000 to present. Furthermore, despite countless reports, the resulting permission was subject to a morass of conditions that added more time and expense to discharge.

Another project involved an architect-designed studio for a respected local furniture maker using locally sourced timber on a derelict, relatively isolated brownfield site, which had been

an unauthorised Gypsy site. The application was refused because the site was not viewed as sustainable.

The Landscapes review urges more power and money for AONBs and national parks (bit.ly/UKlscrvw), but the European Landscape Convention’s view that all landscapes matter is more balanced. I believe that designations are leading to decisions that do not reflect the needs of rural communities, and more often favour the views of the articulate elite who do not live and work in the countryside.

Lack of strategic planning is central to many of these problems.

The idea set out in the NPPF of supporting the development of new towns and villages to meet the need for larger settlements is causing considerable concern in many quarters, because so often there is no infrastructure to support viable communities. There has never been a greater need for regional planning to deal with renewable energy, water, minerals, waste, drainage, roads, and possibly landscape-scale biodiversity projects. This broader view is surely critical to sustainable development and gives a framework for future growth, rather than piecemeal offerings that often create half-hearted solutions with unintended consequences.

The heart of the matter is proper resourcing of authorities.

Planning should be properly rewarded and respected because it is the beginning of so many things. Sadly, the profession struggles to attract bright and enthusiastic recruits. Planning, including rural planning, should be an exciting, creative and rewarding job encompassing a range of disciplines such as landscape architects, designers, economists, agronomists, ecologists and planners, and not reduced to a tick-box exercise. Sustainable development requires an understanding of a wide range of issues and a willingness to recognise that sustainable communities are not necessarily on a bus route.

Judith Norris FRICS is a rural planning expert at the Rural Planning Practice judith@therpp.co.uk Related competencies include: Planning and development management, Sustainability rics.org/journals 21

Land

Interview

Future food The first crops grown in the world’s largest commercial vertical farm at the Jones Food Company in Scunthorpe were harvested at the end of 2018 James Lloyd-Jones

22 Journal March/April 2020

IMAGE © HOLLY CHALLINOR

Q: How did the idea of getting into vertical farming come about?

JLJ: When I was seven, I was watching Tomorrow’s World and I saw a feature about hydroponics. That stayed with me for 21 years. I’d been researching it when, after doing various jobs and being in business, I thought: why don’t we actually do it?

I flew to Japan in January 2017 with a view to bringing the Japanese hydroponic growing technology back to the UK. But I could see weaknesses in the Japanese hydroponics system. I thought I could do better. As they had been the first to market, I learned from them and made changes.

A number of vertical farming companies have started and failed because they did not understand the energy and employment costs involved – hiring lots of people and trying to build consumer brands. We began on a business-to-business basis to prove we were competitive and could deal with quantity, and we took a look at the automation and the energy side. It takes a lot of time and effort to make sure that we can crack those issues to bring down our operating costs, including energy.

Q: How is vertical different to traditional farming? What type of crops can be grown? Do they have to be high value to make the operation financially viable?

JLJ: The farm is stacked, so we have more than 17 layers in a 5,000m2 enclosed environment with no sunlight, using recycled water, employing fewer people than traditional farming. Food grown indoors in a clean environment has no seasons, is more sustainable, and we use fully automated machines that work 365 days a year.

At the moment, because vertical farming is in its infancy and just starting to be commercially viable, we grow highly perishable plants, such as herbs. But there’s a move to grow different crops with a high nutritional value. It’s easier for us to have a smaller carbon footprint than traditional farming because we don’t have a conventional supply chain.

Q: Where is hydroponics happening?

Where does it work best?

JLJ: Hydroponics will work anywhere around the world and has even been used

in space, but I think it works best in harsher climates such as Australia, the USA and Russia for instance, where food is often moved around in trucks.

Q: How does the business work? Are the premises bought or leased?

JLJ: We own them. We are old-fashioned like that, we prefer owning stuff. And now we are planning to expand. Ocado bought into us not long ago and took a 58 per cent stake, and we’ve got expansion plans for two more facilities in the UK. There’s been a lot of interest internationally in using our technology and building up the business around the world.

Q: What are the challenges of being a start-up hydroponics company?

JLJ: Initially, there’s the high capital expenditure, but we’re working hard to bring these costs down. And we’re learning more all the time. Vertical farming is a whole different ball game to using a container to grow, which some companies have tried. Electricity is our biggest cost, so we’ve moved to use as many renewable sources and assets as we can own and operate ourselves. We are heading towards full carbon neutrality, and that also protects our electricity costs because we own the energy assets that supply us.

Q: How is your Scunthorpe operation different to other indoor farms?

JLJ: First, we try to build as much growing area from the UK supply chain as we can.

We’ve done everything on a budget but now we have a bit more headroom. The other thing is that we are a high-care facility, so everyone who goes in and out has to go through the same sort of quality assurance protocols as in, say, a microchip factory, before they’re allowed in or out. We believe we’re the largest such high-care growing facility in the world at the moment.

Q: What percentage of food is being produced in this way in the UK, or elsewhere in the world?

JLJ: I’d estimate it’s less than one per cent, so there’s huge potential for growth. I think in the next ten years we will overtake and eclipse greenhouse growing, which uses

land inefficiently because it needs so much space and takes a lot of labour on a single layer of crop over huge distances.

Q: What is the optimum scale for hydroponics?

JLJ: The bigger the better, so about 20,000m2 would be a good size.

Q: What do you think are the implications for land use?

JLJ: In the current market, there are a lot of older, redundant commercial properties that are taking a lot longer to rent or sell.

They could be reconditioned and used for hydroponics – it’s not easy, but it’s achievable. I think you’ll start to see far bigger units near joint or mixed-use sites such as green energy assets. If hydroponics takes off there may also be a long-term decrease in the use of greenhouse space.

Food hubs in large conurbations could support those areas as well.

Q: How does the funding work?

JLJ: We were privately funded initially by venture capital; then we had some individual high-net-worth backers who came on board. Once we were operating, Ocado bought into us.

Q: What are your next steps?

JLJ: We’ll continue to operate our first unit in Scunthorpe. We are also exploring a number of exciting opportunities – three in the UK and others internationally – with a view to building a new and improved facility in the next six to eight months, to operate in the same way that we are already do in Scunthorpe.

Of course you won’t see our name on the shelves, we went white label so that I didn’t have to deal with budgets. Such an approach would have presented a whole different set of challenges, in that you have to have marketing departments and social media among other things.

James Lloyd-Jones is managing director and founder at JFC james@jonesfoodcompany.co.uk Related competencies include: Agriculture rics.org/journals 23

Land

Rural succession

Successful succession Succession planning is crucial to family farms, but psychologically some see it as the beginning of the end.

However, mediation can enable what would otherwise be difficult conversations Louise Taylor

There is little primary data on how many UK farming families have developed a considered and robust succession plan, but anecdotal evidence suggests that there remain a large number of businesses yet to discuss this challenging subject. The question is why, when so much is at stake?

There are many inhibitors to succession planning but the primary reason is fear.

This might be fear of falling out, of upsetting relatives, of retiring, of letting someone down or of agreeing a plan that suits nobody. Common to all of these fears is emotion, because situations can be highly explosive when handled inappropriately.

Mediation can enable potentially emotive conversations to proceed, however, while allowing the mediator to ask searching questions and get to the heart of the issues. A good mediator will unpick the narrative to develop as broad a picture of the situation as possible while remaining impartial. Neutrality is essential, and working with a family gives mediators a unique perspective into the group dynamics

that other professional advisers, who have already dealt with one or more of the protagonists, may not have.

The key to success in supporting effective familial conversations lies in the mediator’s skill in extracting all the salient information about the background and issues in both private and joint sessions.

Mediators need to listen actively and observe details such as body language and silent interaction between the participants.

Successful mediators reframe information and summarise what they have learned, allowing participants to hear their own story back. Mediators also need to be prepared to offer a reality check, particularly where participants have become entrenched.

Emotions can run high, and mediators need to show empathy while staying in control.

Mediation is often successful because of the process itself – parties who feel that they have been heard and that the process is fair are more likely to be satisfied with the outcome. Participants are encouraged to be actively involved in, and take responsibility

Parties who feel that they have been heard and that the process is fair are more likely to be satisfied with the outcome 24 Journal March/April 2020

for, making decisions. Mediation can enable productive, healthy discourse in a safe environment, particularly where initial attempts have resulted in dispute.

There are numerous reasons why farming families are not discussing succession.

The character of the key decision-maker is important: the founders of family farming businesses are often accused of being the main obstacle to succession planning, being reluctant to seek external advice and potentially creating deadlock.

But research shows that any protagonist can inhibit succession planning, and while appearing to engage with the process they may be quietly sabotaging it. The issue of non-farming siblings also causes concern, and the emotional attachment children have to a family farm, regardless of whether they live or work on it, can deter decisions.

Another issue is families who are engaged in the process but need professional technical advice, for example about inheritance tax planning, leases and agreements or financial planning. Closed or lineal questions to professionals often attract closed answers that can confuse rather than clarify matters. In an ideal world, farming families need a succession team to advise them, but including a solicitor, accountant, rural surveyor, farm consultant and mediator in a family meeting can often be prohibitively costly.

With the government setting targets for a significant increase in UK agricultural productivity before 2035, we need to ensure that land gets into the hands of appropriately trained professionals to maximise production and protect the future of our sector. There is no doubt that effective succession is key, but perhaps we should call it something else – all that matters is that farming families make sustainable, workable plans.

Louise Taylor is an RICS evaluative mediator, managing director of Taylor Millbrook Ltd and managing partner of Barbers Rural Consultancy LLP l.taylor@barbers-rural.co.uk Related competencies include: Agriculture, Client care, Consultancy services

Land

Reclamation

Island living Plans for an environmentally friendly mixed-use development in Copenhagen will reimagine the coastline using soil recycled from construction work

IMAGE © URBAN POWER ARCHITECTURE & PLANNING

Arne Cermak Nielsen

In 2019, the Danish government and the mayors of Greater Copenhagen announced plans to construct an artificial archipelago called Holmene, translating as ‘the Islets’, just south of the city. The 300ha project will serve three main purposes: ••leisure ••industry ••green power.

Since the 1990s, the population of Greater Copenhagen has grown from 1m to around 1.3m people and is predicted to rise by another 15 per cent in the next ten years. A large part of this expansion has been managed by transforming post-war industrial areas into residential housing.

This extensive construction activity is expected to produce 90m tonnes of surplus soil that will enable the creation of the artificial islets and natural protection of the existing coastline. It also makes the landscape resilient in the event of rising water levels in future, safeguarding the reclaimed land as well as the hinterland.

Mending past mistakes The coast south of Copenhagen used to be a lush green landscape with shallow water, wildlife and natural islets. This was eliminated in the 1960s by containment and drainage, which transformed the area into 400ha of highly effective but charmless industrial landscape with concrete shores.

The land reclamation for Holmene offers the opportunity for innovative design rather

than simply reverting to the landscape of the past. The advantages of the nine-islet design are that the project can be developed in stages without it looking unfinished, if, for instance, the economy slows into a recession and the demand for industrial sites decreases.

Furthermore, the islets can be developed thematically, each one offering the best conditions for a different purpose, such as innovative industry and research into green technology (see image, above), biotechnology and life sciences as well as sectors that may emerge in future.

The potential for placemaking lies in the waterside location. Each island will have a green belt comprising wild and natural parks, with attractive transitions between land and water as well as interconnected bike paths. The diverse landscape will blend marshland, dunes, groves and scrubland, with sports and other activities taking place in some areas and recreation and nature walks in others. There are even several tiny islets and reefs, inaccessible to humans, that will provide the best conditions for nature and wildlife on land as well as in the water, to encourage biodiversity.

An essential part of the land reclamation is the green technology islet where the largest energy-generating waste-water treatment plant in northern Europe will be housed. Waste water from the region’s 1.5m citizens will be processed here and turned into clean water, fertiliser and biogas mainly

used for buses, household and industry.

Biowaste collected from households and the industry can also be handled.

Together with heat storage, wind turbines and other green technologies, an annual reduction of at least 70,000 tonnes in carbon dioxide emissions and generation of more than 300,000MWh fossil-free energy is promised. This is equivalent to the electricity consumption of ten per cent of the population of Greater Copenhagen, and an important step towards the ambition for carbon neutrality in the city.

While the Holmene project is now in the design stages, the necessary legislation will need to pass parliament this year, and an environmental impact assessment carried out covering issues such as the effect on sea current, marine biology, infrastructure, and its synergy with other nature reserves.

Construction should start in 2022, with the first islet due to be completed by 2028.

The entire archipelago is expected to be completed in 2045 or later, depending on the demand for industrial land and production of surplus soil from building sites and infrastructural projects.

Arne Cermak Nielsen is an architect at URBAN POWER architecture+urbanism acn@urbanpower.dk Related competencies include: Energy and renewable resources, Spatial planning policy and infrastructure rics.org/journals 25

Land

Hemp

The next super crop If bureaucratic barriers can be dismantled then hemp, with its myriad uses, could be a competitive option for UK farmers

Guy Coxall

In 1533, Henry VIII made the cultivation of hemp (Cannabis sativa) compulsory by law for all farmers that owned a certain amount of land; he wanted the strong, rot-resistant fibres from the plant for the ropes, sails and clothing of his new British navy. Every ship carried a cargo of hemp seed, and this was the first crop sown in newly colonised lands. Hemp was also commonly used for food, medicine, textiles, fishing nets and animal feed and bedding.

The Industrial Revolution led to the demise of hemp cultivation, however, and it eventually became a Schedule 1 substance at the UN narcotics conference in 1961. Last year, the World Health Organization (WHO) admitted historical misjudgement on the wrongful scheduling of cannabis, and on 20 March the UN votes on WHO’s recommendations to remove cannabis from Schedule 1 and hemp from all drug scheduling so farmers can grow the whole plant, which could be good news for them.

Currently, hemp can only be grown in the UK under a Home Office licence for cultivation of cannabis with a low level of THC, the psychoactive compound, as legislation considers the plant’s leaves and flowers as class B controlled substances; this is even though industrial hemp cultivars contain less than 0.2 per cent THC, making the plant non-psychoactive. The expense, bureaucracy and difficulty of obtaining a licence puts farmers off growing hemp, but the outcome of the UN vote could change this. There are some 26 Journal March/April 2020

generic routes to market for farmers, and work is going on to expand the end-use market.

This is not to say that hemp is not agriculturally viable in the UK. All the signs point towards it being the next big crop, as it ticks the boxes for sustainable agriculture, food security, enhancing soil health and carbon sequestration. Its myriad potential markets could also place hemp in direct competition with fossil fuels for energy generation and storage. It can be turned into a graphene substitute, and can even be made into super capacitors and batteries. It is the next generation renewable energy source that can outcompete lithium batteries.

Growth sector One hectare of industrial hemp can absorb 22t of carbon dioxide, and as it can grow to 4m high in 100 days this makes it one of the fastest carbon-to-biomass converters available, more efficient than agro-forestry. The biomass can be used to create biochar that can be fed to livestock, which increases their health and reduces methane output. Their manure then returns carbon to the soil to lock it in for thousands of years.

Hemp is an annual plant that is sown in spring, generally at the beginning of May in the UK, and harvested at the end of summer or beginning of autumn. Although it can be grown as a monoculture

crop for several years without depleting the soil, it is advisable to grow it as part of a rotating crop. As with all spring crops, hemp allows a break in the autumn rotation and is useful for reducing weeds such as black grass, brome grass and shepherd’s purse that are difficult to control. Hemp can be successfully grown without pesticides or herbicides as the high density and shading of this crop mean it quickly outcompetes weeds, and there are few pest issues.

Hemp will grow in most soils, although it prefers a well-draining loam with a pH between 6 and 8. Wet soils are best avoided, especially during the early stages. For strong development of roots, which can reach up to 2m in depth, the land should be prepared to avoid compacting and a good seed bed readied before sowing.

Fertility requirements for hemp are similar to those of spring wheat. However, if growing organically, 40t/ha of perennial green manure such as alfalfa or summer fallow, or previous animal manure applications or composted manure, will suffice for cultivation.

Shallow seeding at 12.5–25mm in warm soil of 8–10°C or higher and good soil moisture will support fast, uniform emergence. Hemp can be seeded with conventional equipment such as air seed drills, hoe-press drills and disk-press drills. Air delivery systems can crack the seeds, so you may need to adjust the pressure to prevent this. Seed density depends on the variety, and this will correspond with the intended use.

One of the biggest decisions is choosing the right variety: there are currently 66 approved varieties listed on the EU common catalogue. Consider soil type, climatic conditions, latitude and most importantly, how to harvest. Varieties can grow 0.91–4.5m high. Cannabis is naturally dioicous, but most have now been bred to be monoecious – that is, having both sexes on the same plant.

IMAGES © JAMIE BARTLEY

Specialist equipment is required to harvest the stalks, which need to be retted to help separate bast from surrounding tissues

Some varieties also have an auto-flowering gene that shortens the vegetative cycle and allows the crop to bloom early.

If growing primarily for seed, you will most likely choose a short auto-flowering variety with a seed density of 100–150 plants per square metre. This density allows the plant to produce side branches, and thus more flowers and seed. These short varieties can also be harvested using a conventional combine, although care must be taken as the strong fibres can wrap around the machinery and even the bearings. If you are growing primarily for seed, organic registration will provide a better price, at around £1,500–£2,000/t, and you can expect a yield of up to 1t/ha. With the growth of vegetarianism and veganism, the organic hemp seed market is secure and has great potential.

Health benefits Hemp seed is a natural source of protein, amino acids and essential fats. The seeds contain more than 30 per cent fat and are rich in two essential fatty acids, omega-6 or linoleic acid, and omega-3 or alpha-linolenic acid, as well as containing gamma-linolenic acid, which has been linked to a number of health benefits. It helps balance inflammation levels naturally, is good for digestive health, skin, and the seed oil has anti-arthritic effects. The seed can also be pressed to produce oil and flour that can be incorporated into a wide variety of foods.

Crops grown for fibre have a higher seed density and produce tall, straight plants with no branching. Seed density can be up to 300 plants per square metre, but a dual crop is preferable as it can produce multiple products. The tops of the plants can be harvested to collect the flowers and seeds and the stalks can be cut and processed to produce bast fibre and the inner, woody part of the stalk, called the shiv. A dual crop can produce 5–6t/ha of biomass, comprising 3–3.5t shiv, 1.75–2.5t fibre and 0.6–1t of dust, the latter of which can be compressed into biofuel pellets or blocks.

Market prices for these depend on the intended use and quality.

Adapted or specialist equipment is needed to harvest the stalks and these need to be retted – where micro-organisms and moisture help separate the bast from surrounding tissues – and turned for several weeks before baling. The straw then needs to be processed by decortication, which in turn separates the bast fibre from the shiv. Currently, it is the lack of infrastructure for harvesting and processing that is the major issue for the UK hemp industry.

However, there are plans to develop farmers’ cooperatives to share harvesting machinery and research and development into new methods of processing on site, without the need for retting or conventional decortication.

The cultivation of hemp connects to several policy goals in the UK including the 25-year environment plan, climate change and emissions policy, the Clean Growth Strategy, bioeconomy, rural development policy and the Brexit green paper.

Guy Coxall is chairman of the think tank Hemptank UK info@hemptank.co.uk Related competencies include: Land use and diversification rics.org/journals 27

Land

Development appraisals

Justified margins Although developer returns are vital to the appraisal process, practices vary widely across the sector. Recent research for RICS offers some insight

Neil Crosby, Steven Devaney and Peter Wyatt

Profits or returns from development can be an emotive issue, made more contentious by a perceived lack of transparency, accusations of gaming in the planning viability system planning and – some would say – obscene bonus payments to housebuilders. Research carried out by the Department of Real Estate and Planning at the University of Reading for RICS has therefore examined the available information on developer returns.

Previous research has made significant criticisms of development appraisal methods and their application, and has highlighted issues with the metrics used for development profits and with the level or rate of profit adopted in appraisal models.

The two most common approaches to appraisal are the traditional residual model and the discounted cash-flow model, which adopt different measures for the developer’s return. The former requires the cash margins relative to cost or value that are commonly quoted in the development sector, while periodic rates of return are necessary for the latter. Finance should 28 Journal March/April 2020

be incorporated into a residual valuation as a crude representation of the time frame for the development; but it should never be combined with project revenues and costs in a cash flow model because the cost of capital is reflected in decisions about the discount rate.

Unfortunately, previous research has shown that some of these modelling intricacies are not always understood in professional practice; the RICS guidance note Valuation of development property published last autumn deals with some of these issues.

The research therefore explored several questions raised by variation in practice

among market participants when handling developer returns. For example, is there a relationship between expected cash margins such as profit on cost and rates of return?

Are practitioners applying the right metric to the right model? What is an appropriate developer return? How do returns vary depending on scheme, timing and the way that return is measured?

All project evaluations assessing land value require an estimate of profit or return.

But little is known about the performance of development schemes; each scheme represents the creation of a new asset with no prior cash flow and with specific features concerning the site, process and product.

Previous research has shown that some modelling intricacies are not always understood in professional practice

Nevertheless, each appraisal requires an individual estimate of expected return.

The research used a mixture of methods to investigate these issues, including a review of existing literature and a questionnaire survey of UK commercial and residential property developers, backed up with interviews and analysis of property company and housebuilder accounts. The research was carried out early in 2019 and most responses were from smaller organisations, relatively evenly split between residential and commercial developers. Most of the interviews were with representatives of larger organisations.

The research found that the traditional residual method of valuation, together with profit margins on either cost or value, still dominates project appraisal practice for small- and medium-sized developers. Just less than two-thirds of respondents use the residual method, while around a third use cash flows.

Larger developers and those that develop commercial or mixed-use schemes tend to use cash-flow techniques and performance measures based on rates of return, albeit in combination with cash-margin measures.

Such organisations were more likely to carry out cash-flow modelling of feasibility alongside any residual-based assessment of profit or land bid.

Reports from practice and published viability appraisals also revealed widespread use of simple cash margins as measures of return. These were most commonly expressed as a percentage of development cost, but also as a percentage of development value; on rare occasions, the return was expressed as a rate of return, usually an internal rate of return (IRR). The required profit margin was between 15 and 20 per cent in most cases, with the IRR also selected from this range despite being a very different measure.

The questionnaire responses supported the findings of the previous reports and confirmed that residential developers favour the cash-based target. A figure of 20 per cent profit on costs was mentioned regularly for sites without significant risks – for example, those relating to planning permission – and 25 per cent for sites that have higher levels of perceived risk. These

levels of profit on cost imply a margin on gross development value of around 15–20 per cent.

The residential developers in our sample were less likely to use target rates of return, corresponding to their preference for the basic residual method over a cash-flow technique. Using cash-flow techniques, the larger developers quoted target rates of return of around ten to 12 per cent per annum, and this corresponds to the higher cash returns that are sometimes required for longer projects.

It is common to include finance in development appraisals, yet, given that debt is often used to help finance development, it was surprising that measures of return on developer equity were found to be less well used. This may reflect the fact that the details of any financial structure are likely to be unknown at the initial feasibility stage, and the emphasis on returns to equity may therefore increase for appraisals carried out later. Commercial, residential and mixed-use developers are all just as likely to use profit on cost as a benchmark as they would a project IRR. Other benchmarks were specified, such as development yield. Net present value was an important output, as was using profit as a cash sum only without scaling it to costs or values, and – for commercial redevelopment opportunities in particular – cash-on-cash return.

The interviews also shed further light on the relationship between the model and the profit or return metric used. The surprise was that, although the differences were well known, profit on gross development value or profit on cost tended to be the default measure of profitability in most cases, even when more sophisticated modelling was used that required or could generate internal rates of return.

Back-testing of completed schemes to identify how achieved project returns deviated from original estimates was found to be far from standard practice among developers. Around 65 per cent of the respondents usually or always carried out a post-development review of their appraisal, while slightly more than 20 per cent only did so occasionally, and ten per cent of respondents never back-tested the

outcomes of a project against the feasibility appraisal at all.

Finally, there was a mixed response to questions about which factors would cause developers to vary the target return for a development scheme. Some would adjust this upwards for longer developments, but several respondents noted that it would depend on the precise nature of the scheme and hence the level of perceived risk.

What are the implications of this research for practice? Profit that is expressed as a simple cash margin does not reflect the timing of receipts and is hard to compare with expected returns from alternative investment opportunities, which are often quoted as rates of return.

Nevertheless, residual techniques may approximate the outcomes from more sophisticated models if the target profit margin is adjusted to mirror the way target rates in a cash flow setting might be altered for projects with different attributes and hence different risks.

The research revealed that, although the use of the conventional residual method remains widespread, many – particularly larger – developers now use cash-flow methods routinely too. Simple cash margins are often supplemented with return rate metrics, showing anticipated returns both before and after finance. Valuers working in this area can find useful information in the Valuation of development land guidance note.

Neil Crosby FRICS is professor of real estate and planning at the University of Reading f.n.crosby@reading.ac.uk Dr Steven Devaney is associate professor of real estate and planning at the University of Reading s.devaney@reading.ac.uk Peter Wyatt MRICS is professor of real estate and planning at the University of Reading p.wyatt@reading.ac.uk Related competencies: Development appraisals, Planning and development management, Valuation Further information: Performance metrics, required and achieved returns for UK real estate (rics.org/performancemetricsreport). rics.org/journals 29

Land

Minerals

Marshalling our resources Guidance from the Mineral Planning Authority can help developers manage resources for future generations sustainably Paul Clarke

The UK’s mineral resources are a significant, widely exploited asset, which feed the construction, infrastructure, energy and manufacturing industries. Such resources are finite, however, and they can only be extracted and worked on where they are found.

Recognising this, the government has long sought to safeguard the UK’s indigenous mineral resources through the regional and district development planning process by avoiding unnecessary surface development over an underlying mineral resource, also referred to as sterilisation.

Buildings and roads can, for instance, prevent access to minerals below.

The National Planning Policy Framework (NPPF) supports such safeguarding in England. Paragraphs 204 and 206 in particular offer specific direction on the designation and management of defined mineral safeguarding areas, and require that policy-led provision in development plan documents shall ‘not normally permit other development proposals in such areas if it might constrain potential future use for mineral working’.

Recognising such prescriptions in the NPPF and the implication for those pursuing potentially conflicting development proposals, the Mineral Products Association and Planning Officers Society published Minerals Safeguarding Practice Guidance (bit.ly/MinSafePrac) in April 2019. The guidance promotes a consistent approach among mineral planning authorities and local planning authorities in directing and applying policy relating to mineral safeguarding areas.

The guidance is essential reading for everyone pursuing development proposals in locations identified for mineral safeguarding. It not only offers insight on the recommended safeguarding decision-making process, but perhaps most importantly it confirms that you should not immediately dismiss all potentially conflicting surface development.

To support informed, balanced decisions, it promotes a requirement for local planning authorities to seek site-specific criteria for prior consideration, including: ••the scale of overlying development that is being proposed

5bn tonnes of indigenously sourced construction and industrial minerals are required over the next 25 years 30 Journal March/April 2020

••the nature of the proposed development and any special characteristic or overriding need for it ••an assessment of site-specific ground conditions and the proven nature of the underlying mineral resource feasibly deemed to be at threat ••the extent of any mineral sterilisation being proposed.

The guidance recommends that such factors be dealt with in a substantiated and consolidated way by a suitably qualified and experienced minerals surveyor in a mineral resource assessment report. The developer would then submit this as part of the planning application to the determining authority for consideration.

Adding paperwork to an already weighty planning application might seem burdensome, but it is also recommended that the assessment include evidence on the economic value of an underlying mineral resource and the prospect of extracting this before development takes place. Undoubtedly such extraction may not always be desirable and, if deemed feasible, developers would need to consider whether it could be accommodated by project timelines. But, pursued correctly, it could add value, save money and improve sustainability, on the basis that the minerals might be recovered for sale or consumption in the supply chain for the project itself.

Recognising the Minerals Product Association’s own forecast that some 5bn tonnes of indigenously sourced construction and industrial minerals are required to support the UK’s targets for growth over the next 25 years, the NPPF’s improved emphasis on the need to safeguard and manage limited resources sustainably is not surprising. The adoption of this guidance by those promoting and permitting development should protect strategic resources and maintain our ability to achieve targets and ambitions for future development sustainably.

Paul Clarke MRICS is partner, minerals and waste, at Carter Jonas paul.clarke@carterjonas.co.uk Related competencies include: Minerals management

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