Real Estate IHL Forum: All Change! Planning: Panacea or Part of the Problem? 

June, 2021 - Shoosmiths LLP

The COVID pandemic has catalysed the decline of traditional retail as the dominant offer in our town centres. There is a growing consensus that a significant part of most town centres needs to have a greater focus on the local community, be experimental and better address local needs.

Alongside this, we have the government agenda to ‘level up’ and to ‘build back better’.  Various pots of money have been identified in order to facilitate this, such as the Levelling Up Fund and the UK Shared Prosperity Fund.

No option is ruled out for getting the economy back on track.  We must all play our part, including the planning system.  Therefore, it’s perhaps no surprise that the planning system was a key feature of the Queen’s Speech which was delivered on 11 May 2021.

Planning Bill

A new Planning Bill is part of the government’s forthcoming legislative programme.  The Bill will extend to the whole of the UK, but the majority of its provisions will apply in England only.

The overarching aim of the Bill will be to create a simpler, faster and more modern planning system.  Its principal provisions will include: (i) a shake-up of Local Plans; (ii) S106 & CIL reform (via the introduction of a National Infrastructure Levy – a value based, fix rate charge); (iii) the introduction of a simplified Environmental Impact Assessment process and a mandated requirement for development to deliver Biodiversity Net Gain; and (iv) a more pronounced role for Local Development Corporations.

It is perhaps the proposed shake-up of the Local Plan system which promises to be the most controversial feature of the Planning Bill.  It signals a move away from a discretionary planning system to one which is based on zones, i.e. designated growth areas and protected areas.  Growth areas will benefit from automatic consent which is tantamount to an outline planning permission.  The political fallout from this proposal in particular suggests that the road ahead for the Planning Bill is going to be a rocky one.  Conservative back benchers have already expressed concerns that the Bill’s measures will turn the garden of England into a building site and, furthermore, will limit the opportunities for public participation in the planning process.

A zonal planning system based around the designation of growth and protected areas will require a step change in the approach to public consultation.  Rather than engaging with specific planning applications, members of the public will have to get involved much earlier in the process when Local Plans are being formulated.  This will bring additional pressure to bear on a process which is already under-delivering, with many Local Plans taking years to be adopted – some considerable way of the 30-month limit advocated by the Planning White Paper.

Right to Regenerate

The government announced its consultation on the ‘Right to Regenerate’ on 1 January 2021.  The consultation closed on 13 March 2021 and the government’s response is awaited.

A relaunch of the ‘Right to Contest’, the ‘Right to Regenerate’ allows members of the public to request that the government directs the disposal of unused or underused land which is owned by public bodies including local authorities – CPO in reverse if you will.  Only one direction to dispose has been issued since 2014 which is perhaps why the need for an overhaul has found its way onto the government’s agenda.

Reforming the application process – making it simpler and more transparent – is one thing.  However, if the ‘Right to Regenerate’ is to become an effective tool in delivering development, much more meat on what can only be described as the bones of the government’s consultation is needed.

Applications for directions to dispose will need to be incentivised (proposals include a presumption in favour of disposal and a right of first refusal for applicants); detailed guidance will be required so that applicants, public bodies and decision-makers have a clear understanding of the case which must be made in order to justify a direction to dispose; and the power to impose conditions on a direction to dispose must be utilised in order to ensure that a direction results in the actual delivery of development.

Further, development constraints and viability issues remain a significant challenge and a very real obstacle to securing successful regeneration.  Whilst a reformed ‘Right to Regenerate’ has the potential to assist in this regard, it’s only one part of a much larger and complex picture.

The consultation paper and the questions posed by the government can be accessed here.

Extension to Permitted Development Rights

A new PD right – Class MA, i.e. which will permit a change from Use Class E (commercial, business and service) (i.e. the former A1, A2, A3, B1, D1(a), D1(b) and D2(e) Use Classes (“the Former Use Classes”)) to Use Class C3 (dwellinghouses) without obtaining planning permission – will be available from 1 August 2021.

Class MA will replace Class O (office to residential) and partially replace Class M (retail to residential).  Therefore, in order to rely on these PD rights, it will be necessary for an application for prior approval to be made before 31 July 2021.

Before beginning development under Class MA, an application must be submitted for a determination as to whether prior approval is required in respect of a variety of matters including (but not limited to): the transport impacts of the development; contamination and flooding risks; impacts of noise from commercial premises on prospective residential occupiers; the provision of adequate natural light and, where the building being converted is in a conservation area, and the development involves a change of use of the whole or part of the ground floor, the impact of that change of use on the character or sustainability of the conservation area.

Further, the development under Class MA must be completed within a period of 3 years beginning with the prior approval date.

Development is not permitted under Class MA (including but not limited to):

  1. where the floorspace for conversion exceeds 1,500 sqm;

  2. unless the building being converted has been vacant for a continuous period of at least 3 months immediately prior to the date of the application for prior approval; and

  3. unless the use of the building fell within one or more of the Former Use Classes for a continuous period of at least 2 years prior to the date of the application for prior approval.

Given all of the above, and the fact that: (i) the PD right will not authorise any associated operational development (for which planning permission will still be required); and (ii) any dwellinghouse granted permission by the General Permitted Development Order (GPDO) having to meet national space standards, the question must be asked whether the use of Class MA will be attractive to the market and whether developers will consider it more straightforward to go down the line of submitting a planning application and to by-pass the GPDO altogether?


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