U-turn if you want to

When I wrote a piece entitled “Straws in the Wind” last Tuesday, predicting that there was a sea-change coming in the coalition government’s attitude to town and country planning, I had no idea that what might be described (if somewhat tastelessly) as a tsunami was about to hit us the very next day.

I do not recall seeing any suggestion as to what lay behind this seismic shift in government policy, but I strongly suspect that there has been growing panic within the coalition at the disappointingly low growth figures (“Down, down, down” as Ed Miliband gleefully put it in the Budget debate last week), and somebody – perhaps even Michael Heseltine himself, as the government’s eminence gris – may have suggested that the government should rev up the bulldozers and get the concrete mixers turning, in the same way as Maggie Thatcher had done, with Heseltine’s help as Secretary of State, after coming to power in 1979. A similar relaxation of planning restrictions was promulgated at that time in circulars such as 9/80, 22/80, 15/84 and 14/85. It was only after Nicholas Ridley’s departure as Secretary of State later in the 1980s that the machinery was again put into reverse, and the concept of ‘plan-led’ development then became the new orthodoxy.

As one or two others have already pointed out, there is one important difference between then and now – the availability of credit. The banks either can’t or won’t lend to builders to finance speculative development schemes, nor are they lending to prospective house-buyers, mainly because most of these borrowers can’t put down a large enough deposit. The days of the 100% mortgage seem to be gone for good, or at least for a very long time to come. The combined effect of this continuing credit crunch is that houses are neither being built nor bought in sufficient quantities to make much difference to overall economic growth, and it seems unlikely that a relaxed planning regime will change that to any extent. The chorus of criticism which various ministers have directed at town planners in recent weeks (much to the indignation of the RTPI and its members) is therefore largely mis-directed as an analysis of the underlying reason for the continuing sluggishness of the property market. Local authority planners must, on the other hand, accept that their attitudes and antics, especially over the registration and processing of planning applications, has provided plentiful ammunition for their critics.

There is bound to be much uncertainty over the detailed implementation of the changes foreshadowed last week, and we shall have to await further announcements from De-CLoG (or maybe the Business Secretary or the Chancellor, both of whom seem to be perfectly happy to trample all over Uncle Eric’s turf) as to precisely how these various ideas are to be put into practice. However, the importance of Greg Clark’s ministerial statement last week should not be overlooked; it has all the force and effect of a ministerial circular, and is very similar in its message to the circulars put out by Michael Heseltine in the early 1980s. Out of all the verbiage which spewed out of Whitehall last week, that piece of paper is by far the most important.

Meanwhile, what of ‘localism’? Having nailed their colours rather firmly to the mast, the government cannot be seen to abandon the concept of localism, but the fact remains that the new course on which they have now embarked is hardly consistent with the various notions of localism which they had previously been peddling. I suspect that the opportunity may be taken to make rather more extensive ‘concessions’ to critics of the Localism Bill in the form of amendments designed to restore an element of strategic planning, which had been the most conspicuous casualty of the localism agenda, coupled with a corresponding watering down of ‘neighbourhood planning’, by raising the minimum number of people who can ask to be registered as a neighbourhood, and hedging round the formulation of neighbourhood plans with various restrictions and qualifications. On the other hand, allowing businesses to combine together to become neighbourhoods for this purpose was a clever wheeze, which will further assist the government to achieve the change of direction on which it has now embarked.

Planning law and practice has been in a continuous state of flux ever since I started to specialise in the subject over 30 years ago, but I cannot recall a change of approach so sudden and unexpected as this one. Whilst I do not expect the results, in terms of the volume of development and overall economic growth, to be as significant as ministers apparently hope to achieve, it certainly represents a welcome freeing up of the planning regime, which I for one am happy to see. As I observed in an earlier post, it needs to be backed up with a robust appeals system, and the government will need to ensure that PINS has the resources it needs to cope with the likely increase in appeals. Ministers must certainly abandon previous suggestions of reducing the appeal process to a mere desk-based ‘checking’ exercise.

© MARTIN H GOODALL

EIA required for demolition

Alarm and despondency has been caused throughout the construction industry by the judgment of the Court of Appeal delivered last Friday (25 March) in R (SAVE Britain’s Heritage) v. SSCLG [2011] EWCA Civ 334. This concerns the consents which may be required for the demolition of buildings.

There was always an element of doubt as to whether or not demolition amounted to development, but that doubt was resolved by an amendment to Section 55 of the 1990 Act made in 1991. The way this was dealt with was in itself somewhat convoluted, and I set out the basic rules (as we all thought they applied until the end of last week) in an article entitled “Demolition in Wonderland” which I wrote quite a few years ago, reproduced below as an annex to this post.

The position has subsequently been complicated by superimposing on our planning system the requirement for Environmental Impact Assessments in certain cases. This has never fitted at all well with the UK planning regime, and has thrown up a number of anomalies over the years, which have had to be tackled piecemeal; for example it was originally assumed that EIA would not be required in respect of an application for consent to details (i.e. the approval of reserved matters) where an outline planning permission had previously been granted. The European Court decided otherwise.

Another point which has had to be clarified is that EIA may be required in respect of development which is Permitted Development under the terms of the GPDO. If a screening opinion confirms that EIA is not required, then the permitted development can go ahead, but where there is a requirement for EIA the development cannot then be permitted development, and an application for express planning permission will be required.

It was not unreasonably assumed that if certain operations did not come within the definition of development under Section 55 of the 1990 Act, then no requirement for EIA could arise. In principle, this still applies, but so far as demolition is concerned, its exclusion from the definition of development is dependent on the direction made by the Secretary of State under s.55(2)(g). It is this direction which was found by the Court of Appeal to be legally defective.

The Court of Appeal therefore granted the relief sought by SAVE including declarations that:

(i) Demolition of buildings is capable of constituting a project falling within Annex II of the EIA Directive; and

(ii) Paragraph 2(1)(a)-(d) of the Town and Country Planning (Demolition – Description of Buildings) Direction 1995 (“the Direction”) is unlawful and should not be given effect.

Contrary to what the Mad Hatter told Alice (see below), the wording of Part 31 in the Second Schedule to the GPDO is not confined to dwellinghouses and buildings adjoining dwellinghouses. Up to now it has in practice been confined to that narrow category of buildings, because everything else was covered by the Secretary of State’s direction (or so we thought). The effect of the Court of Appeal’s judgment in the SAVE case is now to bring a rather wider category of buildings within the scope of Part 31.

Thus, in many cases, the practical effect of the SAVE judgment will be fairly minor – demolition, instead of being excluded from the definition of development will be Permitted Development, and will be subject to the prior notification procedure under Part 31 (in addition to the similar requirement under the Building Act). But there will undoubtedly be cases, and the proposed demolition of the Lancaster brewery would appear to be one of them, where the scale or nature of the proposed demolition may be such as to give rise to a requirement for an EIA. At the very least, there will be a requirement for a screening opinion, and if that results in a requirement for a full EIA, then the demolition will no longer be PD but will require express planning permission.

Permission to appeal to the Supreme Court in the SAVE case was refused by the Court of Appeal, who also refused to stay their order, but the developers, or possibly the Secretary of State, may well apply to the Supreme Court itself for permission to appeal. Thus we may not yet have reached a definitive position on this issue.

© MARTIN H GOODALL

________________________________________________

DEMOLITION IN WONDERLAND

Alice found herself in a part of Wonderland she had not seen before. She was in a street in a big city outside a large building. There was a rather tarnished plaque on the wall by the door, which said - “Office of the Deputy Prime Minister”. Over this someone had pasted a scribbled notice, slightly smudged by haste and rain, which read “Department of Communities and Local Government”.

Suddenly the glass doors parted with a swish, and Alice peered inside. The White Rabbit was rushing across the hallway looking at his watch. Alice would have run away, but before she could do so the White Rabbit had taken her by the arm and was propelling her across the hall.

“Come along. We’re late for the meeting,” he said, and ushered her into a lift, which whisked them up to the top floor.

They stepped out into a large office with a huge table at the far end. Seated at the table were the Mad Hatter, the March Hare and the Dormouse. A heated argument was going on.

“Well, is demolition development or isn’t it?” asked the March Hare testily.

“Yes, it is,” Alice exclaimed brightly. Everyone turned round and looked at her.

“Who asked you?” demanded the Mad Hatter.

“Well, she’s right, or at least she would be if she were,” squeaked the Dormouse, “except, of course, when it isn’t.”

“I thought this was all sorted out in the Planning and Compensation Act 1991,”
observed the White Rabbit.

“Yes, of course it was,” said the Mad Hatter. “Demolition now constitutes development, except when I say it doesn’t. Nothing could be simpler!”

“That’s silly!” exclaimed Alice.

“No it’s not,” said the White Rabbit. “Demolition is now included in the definition of building operations in Section 336 of the 1990 Act and, by Section 55 of that Act, building operations are included in the definition of development. So demolition is development.”

“Except when it isn’t,” murmured the Dormouse dreamily.

“What does he mean?” asked Alice.

The White Rabbit puffed out his chest importantly. “The Secretary of State has power under paragraph (g) of sub-section (2) of Section 55 (as amended, of course) to make a direction that certain types of demolition shall not constitute development.”

“I have the honour to be the Secretary of State,” the Mad Hatter interjected.

The White Rabbit harrumphed.” …….and she (or, to be precise, one of her predecessors) has consequently made the Town and Country Planning (Demolition –Description of Buildings) Direction 1995 (which is published as an annex to DOE Circular 10/95) whereby demolition of the following descriptions of building is not to be taken to involve development, viz and to wit…….”

“Oh, spare us the list. Please!” the Dormouse squeaked.

“Well,” said the White Rabbit, somewhat crestfallen, “basically the list covers everything except dwellinghouses.”

“And buildings adjoining dwellinghouses,” added the Dormouse.

“So you mean to say that I need planning permission to demolish a house?” asked Alice.

“No!!!” they all chorused. Alice looked thoroughly confused (which is hardly surprising, because she was).

“We amended the General Permitted Development Order,” explained the Mad Hatter, “so that demolition of a dwellinghouse is permitted development, so it doesn’t require express planning permission. It’s covered by Part 31, in the Second Schedule.”

“Well, what a complicated way to go about it!” Alice exclaimed. “All you’ve done in the end is to say that you don’t need permission to demolish a building; which is what everyone thought in the first place!”

“Ah, but that doesn’t mean you can just go ahead and demolish your house,” observed the March Hare. “Oh, dear me, no.”

“Then, what do I have to do?” asked Alice.

“Part 31 requires that you must give prior notification to the local planning authority,” said the White Rabbit, “so that they can determine whether their prior approval will be required to the method of the proposed demolition and any proposed restoration of the site.”

“Well, then,” queried Alice, “after that (assuming either that the council decides it doesn’t need to approve the method of demolition, or it approves the details I put in), then can I go ahead and demolish it?”

“Er, well, no, not quite.” It was the Dormouse who had piped up again. “You also have to give six weeks’ notice under Section 80 of the Building Act 1984 of your intention to commence the demolition. Within that time, the council can serve a notice requiring you to carry out works on the site, such as shoring up adjoining buildings and so on.”

“That doesn’t just apply to the demolition of houses, of course,” the March Hare pointed out. “The requirement to give notice under the Building Act applies to all demolition.”

“Then, of course, you would need Listed Building Consent if it were a listed building,” mused the White Rabbit.

“Or Conservation Area Consent if it’s in a conservation area,” the Dormouse added.

Alice was beginning to feel giddy. The room seemed to be spinning round faster and faster.

“What’s the matter with her?” asked the March Hare.

“She’s just fainted,” said the White Rabbit.

“That’s the trouble with youngsters today,” sniffed the Mad Hatter. “No stamina.”

There was a pause.

“We didn’t mention gates, fences and walls” whispered the White Rabbit.

“Another time, perhaps,” the March Hare suggested.

[These last two lines referred to the ‘cock-up’ that was made with the original version of the Direction, which had led to the entirely unintended consequence that express planning permission was theoretically required for the demolition of gates, walls, fences and other means of enclosure. The original version of my article had continued to poke fun at what at that time was the DOE over this faux pas, which was eventually corrected.]

© MARTIN H GOODALL

The new Ministerial Circular (which isn’t)

Coinciding with Wednesday’s Budget statement, the “Minister for Decentralisation” (Greg Clark) issued a written parliamentary statement, in which he said that ministers will work quickly to reform the planning system to ensure that the sustainable development needed to support economic growth is able to proceed as easily as possible. In all but name, this is a ministerial policy circular, and will no doubt be treated as such. Planning lawyers can be expected to quote from it enthusiastically at inquiries.

The statement recognises that many of the proposed actions will take some months to deliver, but it sets out the steps the Government expects local planning authorities to take with immediate effect. The Government's top priority in reforming the planning system is to promote sustainable economic growth and jobs, and the statement repeats Osborne’s words in the Budget statement itself that the Government expects the answer to development and growth wherever possible to be 'yes', except where this would compromise the key sustainable development principles set out in national planning policy.

Clark has reiterated the Government’s commitment to introducing a strong presumption in favour of sustainable development in the forthcoming National Planning Policy Framework, which will expect local planning authorities to plan positively for new development; to deal promptly and favourably with applications that comply with up-to-date plans and national planning policies; and wherever possible to approve applications where plans are absent, out of date, silent or indeterminate.

Local planning authorities are therefore called upon to press ahead without delay in preparing up-to-date development plans, and to use that opportunity to be proactive in driving and supporting growth. They are urged to make every effort to identify and meet the housing, business and other development needs of their areas, and to respond positively to wider opportunities for growth, taking full account of relevant economic signals such as land prices. Authorities, says Clark, should work together to ensure that needs and opportunities that extend beyond (or cannot be met within) their own boundaries are identified and accommodated in a sustainable way, such as housing market requirements that cover a number of areas, and the strategic infrastructure necessary to support growth.

When deciding whether to grant planning permission, Clark states that local planning authorities should support enterprise and facilitate housing, economic and other forms of sustainable development. Where relevant - and consistent with their statutory obligations - they should therefore:

(i) consider fully the importance of national planning policies aimed at fostering economic growth and employment, given the need to ensure a return to robust growth after the recent recession

(ii) take into account the need to maintain a flexible and responsive supply of land for key sectors, including housing

(iii) consider the range of likely economic, environmental and social benefits of proposals; including long term or indirect benefits such as increased consumer choice, more viable communities and more robust local economies (which may, where relevant, include matters such as job creation and business productivity)

(iv) be sensitive to the fact that local economies are subject to change and so take a positive approach to development where new economic data suggest that prior assessments of needs are no longer up-to-date

(v) ensure that they do not impose unnecessary burdens on development.

In determining planning applications, local planning authorities are obliged to have regard to all relevant considerations. They should ensure that they give appropriate weight to the need to support economic recovery, that applications that secure sustainable growth are treated favourably (consistent with policy in PPS4), and that they can give clear reasons for their decisions.

This is a coded way of downgrading the effect of Section 38(6), and is very much what I had expected the government to do. It faintly echoes the words of Michael Heseltine in Circular 14/85 (‘Lifting the Burden’) that “the Development Plan is one, but only one of the material considerations to be taken into account”. Of course, they can’t quite say that in light of what Section 38(6) now says, but they can still emphasise the exception written into that sub-section - “unless material considerations indicate otherwise”. The hint is that material considerations will now be expected to indicate otherwise rather more frequently than in the past. (Planning Inspectors please note!)

To further ensure that development can go ahead (and that infinitives are thoroughly and comprehensively split), all local authorities are now instructed to reconsider, at the developer’s request, existing section 106 agreements that currently render schemes unviable, and where possible to modify those obligations to allow development to proceed; provided this continues to ensure that the development remains acceptable in planning terms.

We don’t have the technology in this blog, but the next sentence ought to be in flashing neon lights: The Secretary of State will take the principles in this statement into account when determining applications that come before him for decision. In particular he will attach significant weight to the need to secure economic growth and employment.

The statement concludes that benefits to the economy should, where relevant, be an important consideration when other development-related consents are being determined, including heritage, environmental, energy and transport consents. The responsible ministers in other departments have consequently agreed that to the extent it accords with the relevant statutory provisions and national policies, decisions on these other consents should place particular weight on the potential economic benefits offered by an application. Those ministers will reflect this principle in relevant decisions that come before them and encourage their agencies and non departmental bodies to adopt the same approach for the consents for which those other bodies are directly responsible.

Reading all this gives me a great feeling of nostalgia. It is just like the old days again. Come back Michael Heseltine – all is forgiven!

© MARTIN H GOODALL

What did the Budget do for us?

As I indicated yesterday, the Budget statement is only the first gust in a blizzard of paper which blows out of Whitehall on these occasions. This included a major new policy document - “The Plan for Growth” - issued jointly yesterday by the Treasury and the DTI (or whatever it’s called nowadays). In this post I will concentrate on what the Chancellor said in relation to town and country planning in the Budget statement itself, and will look at the other publications later.

Osborne claimed that every Government had identified the planning system as a chronic obstacle to economic growth in Britain, but no-one had done anything about it. He was careful to say that local communities should have a greater say in planning (the ‘localism’ agenda, which it appears the government is already beginning to regret), but the government will now expect all bodies involved in planning decisions to prioritise growth and jobs, and will introduce a new presumption in favour of sustainable development, “so that the default answer to development is Yes”.

The Chancellor assured the House that the government will retain existing controls on Green Belts, but the previous policy of directing development to previously developed ‘brown land’ in preference to green field sites is to be abandoned. They will also allow certain use class changes (although it is not clear whether this will take the form of a widening of certain Use Classes in the UCO or the extension of PD rights for changes of use between use classes in Part 3 of the Second Schedule to the GPDO, or both).

There was a gnomic reference to the introduction of “time limits on applications”, which will clearly require further explanation, and the Chancellor confirmed that the government intends to pilot Vince Cable’s idea of auctions of planning permission on land, starting with certain public sector land. So I was wrong in my recent post in suggesting that this was merely a kite-flying exercise on the part of the of the President of the BoT, but I still remain sceptical as to its practicability.

The Budget statement also contained an announcement that the government will fund 21 new enterprise zones. Businesses will get up to a 100% discount on rates, new superfast broadband and the potential to use enhanced capital allowances in zones where there is a strong focus on manufacturing. In return for radically reduced planning restrictions, the government will let local authorities keep all business rate growth in their zones for a period of at least 25 years to spend on development priorities.

The first 10 enterprise zones will be in Birmingham and Solihull, Leeds, Liverpool, Greater Manchester, the Tees valley, Tyneside, the Bristol area, the Black Country, Derbyshire and Nottinghamshire, and Sheffield. Specific locations of the new enterprise zones are to be announced today (24 March), and a further zone will be located in London, where the Mayor has been asked to choose a suitable site. A further 10 enterprise zones will be announced in the summer. Local enterprise partnerships have been invited to come forward with proposals for these.

Obviously a great deal of detail remains to be added in order to make it clear what the government actually intends, and some further clues can no doubt be gleaned from “The Plan for Growth” and other documentation. In the meantime, though, the RTPI’s disappointingly negative (and frankly premature) reaction to these announcements seems rather silly and will only serve to further undermine that organisation’s reputation.

© MARTIN H GOODALL

VAT trap for gung-ho builders

Issues of Stamp Duty (SDLT) and VAT don’t usually feature in this blog, but my attention has been drawn to a recent decision of the First Tier Tribunal (Tax), released on 2 March, Abbeytrust Homes Ltd v HMRC [2011] UKFTT 150 (TC), which must ring alarm bells for anyone who goes ahead with the construction of a new dwelling without first getting planning permission.

In this case the Tribunal decided that construction services supplied in the course of construction of a new dwelling were standard-rated because the relevant provision in Schedule 8 to the Value Added Tax Act 1994 requires that in order for such a supply to be zero-rated “statutory planning consent has been granted in respect of that dwelling and its construction or conversion has been carried out in accordance with that consent”.

The developer did obtain retrospective planning permission, but the Tribunal held that in order for zero rating to apply, planning permission must have been obtained before the VATable supply (of building services) is made. It is clear that the position taken by HMRC is that in order to qualify for zero rating, express planning permission for the construction of a new dwelling is required before work commences and the dwelling must then be constructed in accordance with that permission, and this view was upheld by the Tribunal.

The Tribunal also agreed with HMRC’s contention that if in the course of the supply of construction services the supplier receives payment in advance in respect of those supplies, this brings forward the tax point irrespective of whether or not the supplies of building services have been completed. Section 6(4) of the VAT Act applies when the supplier receives payment before issuing an invoice and fixes the time of supply as the time that the payment is received. So the builder should not even receive an advance payment before planning permission has been issued if zero-rating of the building works is to be preserved.

In this particular case, HMRC had also contended that the building works were standard rated because they involved the demolition and replacement of an existing dwelling, and so did not qualify as the construction of a new dwelling. The Tribunal does not seem to have made a ruling on this point, and I am bound to say (as a planning lawyer, but not a tax lawyer) that such a position would be illogical. There must be many situations in which demolition has to take place before new dwellings can be built. The subsequent erection of the new building must surely qualify as “the supply in the course of the construction of a building designed as a dwelling of any services related to the construction” irrespective of the prior demolition of a pre-existing building.

In our firm we have some fairly high-powered tax lawyers, so I am happy to leave it to them to debate that last point, but as a planning lawyer I see serious implications for my builder clients if they start work on site before a planning permission has been issued or if it is subsequently claimed (whether by the LPA or by HMRC) that the resulting dwelling or dwellings were not erected strictly in accordance with the planning permission.

© MARTIN H GOODALL

A Budget for...., er,....town planning?

Rather naively, I had always thought that the Budget presented to parliament each year by the Chancellor of the Exchequer was intended to deal primarily with fiscal matters, including the raising of the necessary taxation to finance the government’s spending plans. Nowadays, however, the Budget seems to be regarded as an opportunity to announce (or, in quite a few cases, to re-announce) all sorts of other policy initiatives, provided only that they can be said to have some sort of relevance to the economy.

One certainly would not have expected the Budget to be the vehicle in the past for announcing changes to the planning system, but that is nevertheless what we got today. At the time of writing, I have not yet got to grips with any of the detail, which will have to be teased out in the next few days from the plethora of press releases, policy statements and sundry supporting documentation which are now a traditional accompaniment to the Budget.

The two most significant changes had been pre-announced in the past few days – another modern practice. (There was a time when the Chancellor went into purdah before the budget; the details of the budget were a closely-guarded state secret, and even the Cabinet only got a last-minute briefing from the Chancellor.) These changes relate to the creation of a number of new enterprise zones and a proposal to allow a change of use of commercial premises to housing, presumably under a revised and expanded Part 3 in the Second Schedule to the GPDO.

It is the details of the latter proposal which we are all eager to discover. There are bound to be quite a few ‘ifs’ and ‘buts’, and it will be interesting to see how this change will work in practice. I am particularly interested to know whether the new permitted development rights will apply only to premises currently within Use Class B1, or whether B8 and possibly even B2 might also be included. I shall come back to this topic when the details emerge.

© MARTIN H GOODALL

Straws in the wind

I get the distinct impression that, even with the Localism Bill currently going through parliament, there is a sea-change coming in the coalition government’s attitude to town and country planning. This may presage a significant departure from the course which was apparently being followed by the government in reliance on the Tories’ pre-election policy document - ‘Open Source Planning’, judging by Uncle Eric’s speech to the CBI a couple of days ago and various pre-budget ‘leaks’ and other ministerial remarks, including some made even by the Prime Minister. The general approach of the government, developed in the Conservative party’s final years in opposition, appeared to be rather anti-development, and brought joy to hearts of the NIMBYs. Now, we are getting pronouncements which sound much more like those of Thatcher and Heseltine post-1979, promoting the idea that development could and would be the engine of economic recovery.

These latest ministerial aperçus are not entirely consistent with the apparent approach foreshowed in the early months of the coalition’s tenure, and so it may take a while for what is in truth a fairly significant U-turn to be accomplished. It remains to be seen whether the change of approach is reflected in government amendments to the Localism Bill, either at Report stage in the Commons or as the Bill progresses through the House of Lords. By whatever method it is managed, it seems that those who saw Part 5 of the Localism Bill as the means by which development proposals could be forestalled at the local level may be sorely disappointed.

In his speech to the CBI, Pickles repeated in terms the old mantra of “the presumption in favour of development” coupled with criticism of the admittedly slow and labyrinthine development plan process. Could we be about to see the end of the ‘plan-led’ system and a return to planning by appeal? If so, some of the ideas canvassed in ‘Open Source Planning’ and apparently embraced by ministers only a few short months ago may have to be ditched. The planning appeals system, for example, far from being emasculated as was apparently intended, may have to be beefed up to cope with appeals against recalcitrant local authorities who fail to respond to the Secretary of State’s new vision of the freedom to develop without the ‘drag anchor’ (as he put it) of the planning system.

Perhaps Pickles and his merry men should make a start by dusting off Circulars 9/80, 22/80, 15/84 and 14/85 and re-publishing them in modern form.

© MARTIN H GOODALL

Localism Bill – Committee stage concluded

Pressure of work has prevented my posting to this blog as frequently in the past couple of weeks as I had done in the past, and to be perfectly honest I have rather lost interest in the Localism Bill, for a number of reasons.

The committee stage of the Bill resumed on 1 March with the continuing debate on Schedule 9, centred around the mechanics of neighbourhood planning, specifically the means by which it can be ensured that any group of people seeking to be designated as a neighbourhood forum are genuinely representative of the neighbourhood, and not just a group of three or four people down at the bar of the ‘Dog & Duck’. The committee then progressed rapidly, but very superficially, through the remainder of Part 5, which they completed the same day. The committee stage finished as planned on 10 March and awaits the Report stage on the floor of the House.

As debate continued on Part 5, Ministers had signalled a number of concessions and amendments which they are likely to put forward at the Report stage, designed to meet the cogent criticisms which have been made in the course of the debates in committee. But whether these concessions will satisfy critics of the Bill will depend on what emerges in the tabled amendments.

One aspect of the debates in committee which I found particularly disappointing was MPs’ failure to get to grips with the various provisions on enforcement, on which I commented in detail in this blog in December and January. Stephen Gilbert (a Liberal Democrat) raised a point on Clause 103 to which the Minister’s reply was, I believe, entirely mistaken. I simply have not had the time to get my head round it properly since then, but I believe the drafting is such that this clause has precisely the opposite effect to that which the Minister assured the committee was intended. This would certainly bear more careful consideration.

As for Clause 104, the dangerously wide drafting of the provisions on ‘concealed development’ was not debated at all, while the committee gave only the briefest attention to the lengthy and complex provisions of Clause 105. Clearly one cannot expect these clauses to be discussed at the Report stage, and so it is to be hoped that the Lords will look more carefully at these three clauses and will ensure that the drafting is corrected to avoid the unintended consequences which may well arise if they are passed in their present form.

© MARTIN H GOODALL

IPC to take over PINS?

I reported in this blog some time ago that there were fears within the Planning Inspectorate that they would be ‘swamped’ by the Infrastructure Planning Commission when the two bodies are merged under the provisions of the Localism Bill. These fears could well be fuelled by the announcement that the Chairman of the IPC, Sir Michael Pitt, is to become chief executive of the Planning Inspectorate next month in place of Katrine Sporle.

It is beginning to look as though, instead of being a distinct and separate division within PINS, the Major Infrastructure Planning Unit (as successor to the IPC) is going to be fully integrated as part of the inspectorate. Greg Clark is reported to have announced that the IPC Commissioners “will form part of a single group of professionals that will work across the whole range of applications and appeal casework that the Planning Inspectorate will consider.” That sounds like a full merger to me, and could in practice amount to a complete take-over of PINS by the IPC.

Reading between the lines, it seems that the government envisage a further organisational shake-up of PINS in September 2014, when current IPC appointments (as well as Pitt’s appointment as CEO of PINS) will come to an end. In the meantime, Greg Clark also confirmed that major infrastructure applications in progress at the time of the merger will continue to be handled by the same individuals so as not to delay them, despite having only very recently rejected an amendment to the Localism Bill which was intended to ensure this. Only time will tell how this plays out in practice, and what effect it will have on PINS and on its performance in terms of handling its ‘normal’ appeals workload.

I leave you with one rather worrying thought. The possibility of further organisational changes within PINS in September 2014 might possibly be timed to coincide with radical changes to the appeals system which, although they have not been included in the Localism Bill, were foreshadowed in the Conservatives’ pre-election Green Paper (‘Open Source Planning’). Could the coalition government still be incubating such further changes, to be hatched in a year or two’s time and implemented in the Autumn of 2014?

© MARTIN H GOODALL

Planning in Wonderland

‘Curiouser and curiouser’ said Alice. ‘The antics of the coalition government seem to become ever more bizarre. Have these people any idea what they are doing?’ It is just as well this blog only discusses planning matters; it would be impossible to cover adequately the whole range of nonsense emanating from ministers on education, the health service, local government, the countryside and now even foreign affairs.

The latest piece of insanity comes from Vince Cable, wearing his hat as Secretary of State for Business, Innovation and Skills and President of the Board of Trade, but who seems happy to trample on the turf of any other ministry if the subject matter might vaguely be interpreted as having anything to do with business / economic development.

Cable’s latest wheeze (which is an idea that seems to have been knocking about within the Lib Dem party for some years past) is a procedure by which landowners wishing to develop their land would state in a sealed bid delivered to the local Council the price at which they would be willing to sell their land. The landowner would be bound by that price, and the Council would have the right to buy the site at that price for a prescribed period. It is assumed that a Council might receive offers from several landowners, and would then choose to buy one or more sites, depending on which sites they would wish to see developed. The Council would then grant planning permission for the development of the chosen site (or sites) and would auction the land off to developers with the benefit of planning permission. The theory is that the local Council would get most of the increased land value attributable to the grant of planning permission.

One obvious flaw in the theory is that landowners can be expected to build the full ‘hope value’ of the land into their offer price, so that the uplift attributable to the subsequent grant of planning permission may be tiny or non-existent. There might perhaps be some element of competition between landowners seeking to get their sites selected for development, but the location of the site and its identification in the Development Plan as a site for development are likely to be far more important factors in persuading a Council to buy, rather than the asking price.

There is a distinct possibility that if a Council were to misjudge the market for development land, they might find themselves paying more to the landowner than they can subsequently realise on auctioning it to developers. A much more likely scenario is that landowners may sense a ‘stitch-up’ in this proposed system and will simply hold their land out of the market until the scheme is dropped, thus slowing development even further until it becomes a mere trickle.

I don’t share the view expressed by at least one other commentator that this is in effect a re-run of the nationalisation of development values under the 1947 Planning Act, which was scrapped by Churchill’s incoming Conservative government in 1951, not just for doctrinaire reasons but primarily because the market in development land had almost entirely dried up as a result of these provisions in the 1947 Act. But the practical effect might possibly be the same.

Cable’s outpourings on this subject seem to be no more than a kite-flying exercise, and I am not aware that it is officially adopted policy of the coalition government. Something tells me that it might not go down too well on the Tory back benches; and ‘Sir Humphrey’ will no doubt whisper in the Minister’s ear if it were to get anywhere near being formulated as official policy. So I don’t think we need get too excited about this particular piece of silliness. However, this may prove to be yet another nail in poor old Vince’s political coffin, and I would not be at all surprised if he were to be put out to grass when Cameron and Clegg have their first cabinet reshuffle later this year.

© MARTIN H GOODALL

Unilateral undertakings – Developers beware!

As I have observed before, the significance of a judgment is not always obvious on first reading, and it is only on coming back to it at a later date that the importance of the point it establishes becomes clear. A recent example of this was the judgment in R (Millgate Developments Ltd) v. Wokingham BC [2011] EWHC 6 (Admin) in which judgment was given on 14 January. I read the judgment shortly after it was delivered, but failed to appreciate its importance until I was reminded of it again by my colleague Ben Garbett.

This case arose from an appeal against the refusal of planning permission which had been based on the absence of a Section 106 agreement to secure financial contributions towards local facilities. In the course of the appeal, the appellant had delivered an executed planning obligation to the Inspector, in the form of a unilateral undertaking, which was intended to meet the objection raised by the Council. As is usual in such cases, the deed was expressed to be conditional upon the grant of planning permission by the Inspector and upon the subsequent implementation of that planning permission.

The Inspector allowed the appeal, but in doing so he decided that the Council’s demand for financial contributions was unjustified and that they were unnecessary. The Inspector made it clear that he therefore placed little weight on the planning obligation.

However, the joy of the appellant was short-lived. Although the planning obligation was conditional upon the grant of planning permission by the Inspector and upon the subsequent implementation of that planning permission, it was not expressed to be conditional on the Inspector’s finding that it was a necessary prerequisite to the grant of planning permission. The appellant had clearly not foreseen the possibility that the Inspector would decide that the financial contributions were not needed. The Council metaphorically rubbed their hands, and made it clear that they intended to enforce the planning obligation by requiring the payment of the financial contributions which the appellant had covenanted to pay in their unilateral undertaking. It was this decision which the developer sought to challenge by way of an application for judicial review.

The developers relied on several grounds of challenge but all were dismissed, and so they are going to have to look big and pay up. The moral of this sorry tale is that in an appeal in which the appellant disputes the requirement for a planning obligation, or may wish to do so, they should make any unilateral undertaking which is proffered in the course of the appeal conditional not only upon the usual requirement that planning permission should both be granted and implemented but also upon the Inspector’s clearly stating that the planning obligation is required as a prerequisite to the grant of planning permission. In fact, it might be advisable to include such a proviso in any unilateral obligation put forward in an appeal, even if the developer does not dispute the requirement for it.

© MARTIN H GOODALL