The saga begins
Michael Gove MP after he was asked to ‘calm down, calm down’
There’s something about the Government’s much-vaunted plans for ‘levelling up’ that brings out their verbose side. The initial white paper on the subject from February totalled 332 pages….and this week’s Levelling Up & Regeneration Bill extended to a whopping 338 pages, with a 248 page side order of ‘explanatory notes’. Easy reading it isn’t.
The Government’s mission in shiny graphic form
The obvious first question is ‘does it address the twelve areas of focus that were in the white paper?’ To use its own wording, it is a bill to:
“Make provision for the setting of levelling-up missions and reporting on progress in delivering them; about local democracy; about town and country planning; about Community Infrastructure Levy; about the imposition of Infrastructure Levy; about environmental outcome reports for certain consents and plans; about regeneration; about the compulsory purchase of land; about information and records relating to land, the environment or heritage; for the provision for pavement licences to be permanent; about governance of the Royal Institution of Chartered Surveyors; about vagrancy and begging; and for connected purposes.”
Those 12 levelling up missions again
By its first page, it is clear that the Bill is not an all-encompassing response to the twelve challenges – with the lack of explicit reference to housing particularly telling. It also reveals however that it incorporates some of the proposals for planning reform outlined in the earlier Planning for the Future White Paper (August 2020). It is in our view however the most important single Central Government publication on planning since the introduction of the National Planning Policy Framework in March 2012.
So what is proposed? Here’s our initial summary. (For the excellent more extensive version, read the Government’s official summary here.)
Key points of the bill
A NEW INFRASTRUCTURE LEVY
The Levelling Up and Regeneration Bill sets out the framework for a new Infrastructure Levy (IL), which the government has said will largely replace the current system of obtaining developer contributions for infrastructure and affordable housing.
As set out in the bill, the new levy will be charged on the value of property when it is sold and applied above a minimum threshold, with levy rates and thresholds being set locally by planning authorities. The rates must be set as a percentage of gross development value rather than the current Community Infrastructure Levy, which is based on floorspace – more on this below.
Ministers said they are following this approach as they believe ‘it will allow developers to price the value of contributions into the value of land’. It will also remove the need for obligations to be renegotiated if the gross development value is lower than expected, while allowing local authorities to share in the uplift if gross development values are higher than anticipated, ministers said. The Chief Planner’s follow-on call on the bill confirmed that ILs will be set locally, with different rates applied for brownfield or greenfield development. Let the bun fight over values commence….
FURTHER PLANNING CHANGES
The government finally confirmed that plans to introduce a zonal planning system, which would designate some areas where planning permission would automatically be granted, have been abandoned. This is a move that Bellona Advisors supports.
Further changes are on the horizon however. This includes giving local plans more weight in the planning application decision-making process. This effectively means there must be strong reasons to override it for developments. The same weight will be given to other parts of an authority’s development plan, such as mineral and waste plans and community-led neighbourhood plans.
Policies on issues that apply in most areas, such as general heritage protection, will be set nationally, in order to ‘speed up local plan making’. We think however this is a red herring for further centralisation of the planning system, as Zack Simons elucidates here.
Digital powers have also been included in the bill in a bid to allow more standardised and reusable data to inform plan-making. In addition, new ‘local plan commissioners’ could be deployed to support or ultimately take over plan-making if local planning authorities fail to meet their statutory duties – let’s see if St Albans, whose last Local Plan dates from 1994(!), is first on the list….
Something heavily publicised in the media is new ‘street vote’ powers that will allow residents on a street to bring forward proposals to extend or redevelop their properties, with the proposals then being put to a referendum of residents on the street to determine if they should be given planning permission. The irony of a number of people electing to extend their properties due to a lack of (comparatively) affordable larger properties, in part due to the continued throttling of supply, is not lost on us….
Ministers have also signalled an intention to remove the requirement for authorities to maintain a rolling five-year supply of deliverable land for housing if their local plan is up to date. This is discussed in further detail below. Regulations will be updated to set clear timetables for plan production, with the expectation that they are produced within 30 months and updated at least every five years. No detail however was given on beefing up central government powers, or resources, to undertake enforcement of this – and that resourcing issue, the great elephant of the planning room, is covered later in the report.
Elegant graffiti on the issue at hand, 2022
DESIGN & THE ENVIRONMENT
In 2018, Conservative ministers placed a renewed emphasis on the concept of ‘beauty’ in the development process when it established its Building Better, Building Beautiful Commission.
The Levelling Up and Regeneration Bill aims to bring forward some of the recommendations from the commission, including the requirement that all local areas should produce a design code to inform planning decisions. Whether or not local authorities have got the resources to do this is another matter entirely – and this is our main bone of contention, as explored below.
Developers will also be required to produce ‘environmental outcome reports’ when submitting new planning applications, replacing previous reports mandated by the European Union. The exact detail of these will be subject to further consultation.
Infrastructure gain for more health services? Don’t bet against it….
REGENERATION & MARKET REFORM
To support the regeneration of brownfield areas, the bill included changes to compulsory purchase powers. This includes allowing compulsory purchase orders to have an expiry period of more than three years and increasing the flexibility on the date an acquiring authority becomes the legal owner of land.
The bill also makes provision for a new type of locally led ‘urban development corporation’, which will be accountable to local authorities rather than the secretary of state.
DEVOLUTION
As first promised under the Levelling Up White Paper, the government intends to make sure every area of England that wants one can have a devolution deal, including a long-term funding settlement, by 2030.
The bill paves the way for this by creating a new type of combined authority model – ‘combined county authorities’ – to be made up of upper tier local authorities (county councils and unitary authorities) only. The process for establishing and amending new and existing combined authorities will be simplified in a bid to speed up the process of devolving new powers.
Our View
The PM is under pressure on the Environment (amongst other issues)
As this is a bill, it is still subject to extensive parliamentary debate – likely to take six to nine months as a minimum – alongside a large proportion of its contents being the subject of consultation. The detail will therefore change but the bill in its present form provides a pretty telling insight into where Government thinking is on regeneration. In our view:
– Who exactly is going to implement these changes? The practical ramifications of what this bill proposes is enormous, with the weight of (principally planning) changes falling on local authority planning teams. These are the same Councils that have experienced an enormous reduction in their budgets since 2010 owing to a reduction in Central Government spending in the name of ‘austerity’; this in turn, as Sam Stafford’s excellent 50 Shades of Planning blog points out, has led to a near 40% reduction in the budgets of local authority planning services. This is entirely unsustainable without further changes to the planning system being introduced! Whilst it sounds fantastic in theory for local authority Design Codes to be recognised ‘in law’ as a result of the bill, they need completing first….
Design codes generally work well if implemented – but do local authorities have the resources to institute them?
The Government clearly knows there’s an issue in funding local authority planning teams, as proposals for changes to planning fees are to be consulted on in 2022 alongside the bill. Simon Gallagher, Director of DLUC, confirmed that the Government was looking to increase charges by 35% on small applications and by 25% on large applications, but with the key proviso that ‘increasing fees must lead to a better service for applicants’. It is a brave move for the Government to commit to this; to get the sort of local authority system that the development industry wants requires BOTH a fee increase and a long-term financial settlement from Government for local authorities that allows them to staff their planning teams at full capacity. Without it, a number of the changes that the bill wants to see in practice – particularly in respect of design – will remain theoretical.
– We think the detail on the infrastructure levy will be the most debated part of further consultation. The Government has for some time been under significant pressure to push for developers to ‘pay more’ for new infrastructure and community facilities alongside new development. Whilst the Letwin Review parked the idea of land value capture for now, the Government has doubled down on being seen to ‘be harder’ on master developers and housebuilders, as this text from the Government’s own press release on the bill shows:
A simple, non-negotiable, locally set Infrastructure Levy will ensure that developers pay their fair share to deliver the infrastructure that communities need.
There isn’t such thing as a simple levy however. IL is to be set and charged as a property value, and this detail has not been fleshed out – as Town Legal’s excellent summary points out here. With early talk of differentiated levies dependent upon brownfield or greenfield status, we see this being a minefield of deliberations and interpretations. With consultation due on the levy later in 2022, keep your eyes peeled on how this plays out in the press amongst politicians and practitioners….
– Ditching the requirement for those with local plans to demonstrate a ‘five year land supply’ doesn’t address the main issue – to get a five year land supply everywhere else! We think this is classic whataboutery from the Government, designed to appease certain groups whilst not actually tackling the problem of out of date plans. Neither further carrots in the shape of additional resourcing or support, nor sticks in the form of beefed up enforcement action or staff, made its way into the bill. If the Government is serious about making places level, this is a curious omission….
– Finally, more devolution is welcomed – but the chance to beef up current arrangements has been missed in this bill. We’ve argued in a number of our reports that genuine self-determination on issues such as housing, transport and decarbonisation is the way forward, and it is excellent to see the opportunity for rural areas to make their own arguments to Government for deals by 2030. In our view, existing regional Mayoral powers do not go far enough – and we agree with the findings of the Housing, Communities and Local Government Select Committee for further powers, including wider revenue raising powers, as espoused here. We will continue to make the case to Government on this basis as a central part of levelling up.
Regional devolution as things stand today (source: Centre for Cities)
What’s next
We’ve called this blog ‘The saga begins’ as this is the first of many stages of deliberation and discussion of the bill’s detail. Of the bill’s key details, the Government has said:
“We will continue work on the detail of regulations, policy, and guidance, and will consult on how a number of important provisions could be taken forward. These include: Technical consultations on the detail of the Infrastructure Levy and changes to compulsory purchase compensation; and a consultation on the new system of Environmental Outcomes Reports which will ensure we take a user-centred approach to the development of the core elements of the new system, such as the framing of environmental outcomes as well as the detailed operation of the new system.”
This is alongside a raft of parallel consultations on related issues, including:
– A technical consultation on the quality standards that Nationally Significant Infrastructure Projects will be required to meet to be considered for fast-track consenting and associated regulatory and guidance changes to improve the performance of the NSIP regime.
– Proposals for changes to planning fees.
– Its vision for the new National Planning Policy Framework (NPPF), detailing what a new Framework could look like, and indicating, in broad terms, the types of National Development Management Policy that could accompany it.
The Government expects the bill to get royal assent by 2024. Expect two intensive years of deliberation, public fall-outs, dedicated conferences and events and invective from all sides given the subject matter. Get in touch with us if you want to gauge how this affects any of your live or proposed projects.
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