Reform of planning law is a sensitive area – especially for Conservative voters – but it is also essential to the government’s growth ambitions. Rachel Rothwell reports on a suite of looming reforms
The low down
Planning law is about balancing the pressing need for economic growth and the rights of local people. Everyone accepts that the current system is too complex and cumbersome. But following the failure of recent reform plans, the government is proceeding more cautiously with the Levelling Up and Regeneration Bill and further measures in this month’s mini-budget growth package. These reforms are a crucial pillar in the government’s plan for growth, but it is far from certain whether they will gain enough support from MPs worried about how their constituents will react.
For any government, setting planning law is the ultimate tightrope act. On one side is the pressing need for development to fuel economic growth and resolve a housing crisis. On the other lie the protection of the local environment and the rights of local residents. Finding a delicate balance between these two sides is no mean feat. As former housing secretary Robert Jenrick discovered earlier this year, getting it wrong can prove a political disaster. But all involved in the planning system agree that change is needed, with the current process slow and cumbersome. Meanwhile, many feel that the dial points too far towards local rights at the expense of economic growth.
In August 2020, Jenrick sought to tackle these issues head-on with what would have been the biggest shake-up of the planning system for 70 years. The radical plans contained in his Planning for the Future white paper took a zonal approach, with allocated ‘growth’ zones in which it would be far quicker and easier for developers to gain planning permission. The plans were dubbed a ‘developers’ charter’ by critics and prompted an uprising in the Conservative party ranks when it emerged that they would lead to many more homes being built in Tory shires and fewer in Labour-controlled urban areas. The death knell for the reforms sounded in June 2021, when the Liberal Democrats overturned a Tory majority of 16,000 in a byelection in Buckinghamshire’s Chesham and Amersham; a seat that had been held by the Conservatives since its creation in 1974. With the planning reforms blamed for the defeat, the white paper proposals were abandoned and Jenrick was sacked as housing minister.
Enter ‘the Lurb’
While Jenrick’s sweeping reforms were a step too far for voters, the problems dogging the planning law regime did not go away. In May this year a new set of changes burst on the scene when then-levelling up minister Michael Gove unveiled a Levelling Up and Regeneration Bill – or as planning lawyers like to call it, ‘the Lurb’.
‘“The Lurb” does sound rather like some sort of primordial soup,’ says Alex Minhinick, a director in the planning and compulsory purchase team at Burges Salmon. ‘It’s an extremely wide-ranging bill with lots of things in. Planning can be quite triggering for some MPs and constituencies, and it is attracting a lot of attention.’
Since Gove unveiled the bill, there has been a new prime minister, a new minister for levelling up, and a new housing minister. The latter – Lee Rowley – confirmed at this month’s Conservative party conference that the bill would continue its passage through parliament as normal; indeed, it has just emerged from the first committee stage of the Commons. Whether this weakened government will succeed in driving through reforms in such a sensitive area is far from certain, however.
So what is in the new bill and will it tilt the balance of interests in favour of development and economic growth?
Towards centralisation
One of the most striking changes contained in the Lurb relates to what some see as a fundamental shift towards greater ‘centralisation’ of planning policy. For the first time, aspects of planning rules will be set nationally rather than locally. As Iain Gilbey, senior planning partner at Pinsent Masons, explains, the change involves the introduction of ‘national development management policies’ (NDMPs).
‘It’s a bit of a boring phrase, but it’s actually quite powerful,’ Gilbey says. At the moment, local plans are very important – they have primacy in the planning decision-making process. But these new NDMPs will allow the government to impose a degree of consistency throughout the country in relation to aspects of planning. ‘For example, at the moment the government is concerned that there is no consistent approach to listed buildings and conservation. So this is one of the areas where it wants to set NDMPs,’ explains Gilbey.
This may sound uncontroversial, but much will depend on whether, once introduced, these national policies end up being extended into other areas. ‘The main point is that this has the potential to create a more centralised planning system,’ Gilbey says. ‘The government says that’s not its intention, but if you’re creating NDMPs, then you’re effectively centralising areas of planning and de-emphasising the local role. There’s a danger that if you centralise NDMPs, you end up with a more centralised system. There’s a tension between this government wanting to have a lighter regulatory touch and some of the proposals in the Lurb. This suggest a more centralised approach to some areas.’
Given the potential for national policies to spread beyond issues such as heritage and into new areas, voters in leafy parts of the south-east may have reason to be nervous about the proposal – particularly with a general election on the cards in the next two years. While a Conservative government would be unlikely to take advantage of national policies to push through, say, higher-density housing in Tory shires, a Labour government determined to solve the housing crisis might take a different view.
Combined county authorities
Tying in with the government’s ‘levelling up’ mission and its strong pro-growth agenda, the Lurb provides for greater devolution throughout the UK with the creation of a new tier of larger ‘combined county authorities’, potentially with an elected mayor.
At the moment, local authorities are viewed as being too geared towards the interests of local residents, which constrains development. Placing planning powers in the hands of larger, combined authorities that are a step removed from local objectors is intended to help development.
‘There’s a sense in government that if you can give more power to larger authorities whose desire is to drive growth, they will get less bogged down with local issues,’ says Gilbey. ‘We’ve seen that in Birmingham and Manchester.’
Street fighting
Of all the wide-ranging proposals in the Levelling Up and Regeneration Bill, one stands out as bizarre. The bill includes ‘street vote’ powers through which residents would be able to vote on whether to allow development – such as a neighbour’s home extension – on their road. A new development would need to achieve 60% of votes for it to go ahead.
As Iain Gilbey, senior planning partner at Pinsent Masons, explains: ‘The street vote powers would allow residents to bring forward proposals to extend or redevelop their properties in line with the local design approach. Then that would be put to a referendum of residents on the street, to determine whether they should be given planning permission.’
The concept seems a perfect recipe for neighbourhood discord. It also suffers from the obvious problem that if people are asked whether to allow an extension or development near them, they are likely to say no.
‘There was a collective scratching of heads about this proposal within the planning world,’ notes Gilbey politely. ‘I think that’s probably filtered through into civil service and government.
‘If you give local communities power to veto development, I suspect that’s going to be widely used. I think the street vote proposal will probably not find its way into the final version of the act.’
Careful what you wish for
An area of planning law where experts have been crying out for change is the levy charged on new developments to fund infrastructure such as affordable housing, schools, GP surgeries and roads. The current charge, the Community Infrastructure Levy (CIL), has been despised by developers since its 2010 introduction. While it was intended to be simple, its practical operation has been of nightmare complexity. The poorly drafted legislation had to be amended 10 times in its first 10 years.
Now the government plans a new charge, the Infrastructure Levy (IL), which again is intended to make things simpler. But will it? The CIL is a tariff based on the floorspace of a development at the time that planning permission is granted; and it is up to local authorities whether or not they wish to impose it. The IL will be very different. This new mandatory charge, which councils must impose, will be based on a percentage of the gross development value of the project. This is arguably fairer because it takes into account market fluctuation between the planning stage and the completed project. But the downside is that the extent of IL liability will not be known until much later in the process, creating uncertainty over the cost of a development. Calculating IL liability will also be more time-consuming for local authorities, adding to delay. Local authorities will probably outsource this task and pass the cost on to developers.
‘Many people feel that IL isn’t actually going to be less complicated than CIL,’ warns Victoria McKeegan, senior associate at Town Legal. ‘The government has committed to a “test and learn” approach to introducing this. This sounds like they’re acknowledging that it’s going to be difficult to reform and that they might not get it right first time.’
‘The problem is that we just don’t know the detail yet,’ says Victoria du Croz, head of the planning team at Forsters. ‘The idea is that IL is going to replace CIL, [but] it may work alongside CIL in some cases. It is focusing on the viability of a development, and so “back-ending” when the liability is paid. But by doing all this, is it fixing the real problem – which is that there isn’t enough affordable housing, and is infrastructure provided on time? A lot of people in the industry are saying that, actually, the IL has a real risk of not doing that.’
'The government has committed to a ‘test and learn’ approach to introducing [the IL]. This sounds like it’s going to be difficult to reform and that they might not get it right first time'
Victoria McKeegan, Town Legal
Under the new IL, while developers will have the option of meeting their obligations by, for example, physically building the required number of affordable homes, it will still be possible for the developer to make a financial payment instead – as they do in the CIL regime. The problem with such payments is that while developers dutifully hand over cash to local authorities to pay for roads, schools and homes, local authorities often cannot do anything with that money.
‘Local authorities are sitting on millions [in such payments],’ says du Croz. ‘The councils are so stretched that they don’t have the time to be able to work out and deliver these [infrastructure] projects themselves.
‘We act for a lot of developers. You’ll find that when you apply for planning permission, the local community will get so frustrated, saying that we can’t get access to doctors or school spaces, everything’s too overcrowded. They take their anger out on the developer, but the developer has paid contributions to the council, and [often] cannot force the council to deploy it.’
Zoned out?
Planning lawyers have spent months poring over the Lurb, getting to grips with its headline proposals and frowning over the missing detail, with yawning gaps left to be cemented in with secondary legislation. Then last month, a new set of broad-brush, headline reforms was thrown into the mixer.
Contained in former chancellor Kwasi Kwarteng’s now notorious mini-budget were proposals for new ‘investment zones’ to boost growth. Like the Lurb, the new investment zone concept is light on detail but would involve local or mayoral authorities putting forward sites where there will be ‘planning simplifications’ so that development can be fast-tracked.
Is this zonal approach a sneaky return to Jenrick’s controversial vision? McKeegan thinks not: ‘The growth zones in Jenrick’s white paper were more “top down”. The government was proposing different areas to be allocated by LAs in the local plan as being subject to weakened planning rules, and the whole local plan area was colour coded [according to whether it was an area designated for ‘growth’, ‘renewal’ or ‘protection’].
‘But the proposals in the mini-budget are more ad hoc. It’s about getting development going on some key sites and giving them bespoke rules, rather than trying to reframe the entire planning system.’
The government held background discussions with mayoral and local authorities ahead of its announcement. Some 38 of these have sites that may be suitable to become investment zones. The onus appears to be on the authorities themselves to say what rules they would apply to these sites. The government set a tight deadline of 14 October for authorities to submit expressions of interest.
There are plenty of unanswered questions surrounding the proposals. ‘Will a growth zone development have to comply with the usual requirements to provide affordable housing or the environmental impact process?’ asks McKeegan. ‘The government guidance [on the zones] refers to “mitigating” environmental effects rather than “avoiding” them. The clear intention is to speed up the delivery of important sites identified by LAs, by weakening the existing protections.’
Kwarteng’s mini-budget growth plan also trailed a new Planning and Infrastructure Bill to run alongside the Lurb, that would accelerate the delivery of ‘priority major infrastructure projects’ by speeding up planning consents. Meanwhile, the national press has reported on further planning changes being drawn up by new levelling up minister Simon Clarke. These include a proposal to exempt smaller developments from the need to build affordable homes. According to reports, an announcement on the controversial plans, which could prove difficult to get through parliament, has been put back until after the publication of the new chancellor Jeremy Hunt’s ‘medium term fiscal plan’ on 31 October.
Balancing act
With the government having thrown all its eggs into the basket of economic growth, it needs to create a planning regime in which development can proceed at pace. But if reforms are seen as too pro-growth at the expense of local rights, they will be unpalatable in the traditional Tory shires and beyond.
All Conservative MPs would agree that the economy needs to grow. But whether they will vote through this new suite of planning reforms will ultimately depend on whether the government has managed to calibrate the balance of interests at a level that their constituents will tolerate.
Rachel Rothwell is a freelance journalist
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