Plan-it Law

Community Infrastructure Levy - we need transitional provisions

Although we will be submitting representations on the consultation, it is already clear that there is a real need for the Government to bring forward some transitional provisions. Because of the way the draft regulations are worded, liability for CIL could fall upon owners of buildings which have been developed well before CIL becomes effective in an area - if they were built under a permission under which further development may still take place (which may be after CIL comes in). For example, in a large development scheme permitted under a single outline permission, buildings A - F  may be built and even occupied well before buildings G-L come forward in a reserved matters application. If CIL comes in meanwhile, then, when the final reserved matters approval happens (which the regulations regard as the day on which the entire development is "first permitted") then CIL will be calculated for the whole development and will be due on the day when a material operation next takes place. Because the planning permission relates to the whole of the site, then liability will default (ie if the developer of buildings G-L does not pay it all) to all owners of the land (ie the land within the application site which was the subject of the outline planning permission) and will be apportioned among the owners according to value. This cannot be what is intended - investors and other owners beware. Now is the time to lobby for appropriate transitional provisions!

The Oxford Planning Law Conference and IPC

Last weekend's conference was time well spent. In addition to catching up with many colleagues in the world of planning it was a good chance to meet and hear about the new Infrastructure Planning Commission which opens its doors next week, on 1st October.  It seemed as though half of the commission was there led by its Chairman, Sir Michael Pitt, with support from some newly appointed commissioners.

There was a great deal of talk about the vulnerability of the IPC's decisions. Not only does it suffer from democratic deficit, but also all submissions and objections will be made in writing. The complexity of the issues involved in for example nuclear power or high speed rail links are likely to lead to huge submissions and one wonders how the Commission is going to avoid misunderstanding some vital aspect from time to time.  Most people present, not just fellow lawyers, agreed that the IPC is likely to face a series of challenges and that there are a number of weak points.  For example, it looks as though the national policy statements are not going to be ready when the first applications are made, but will be issued later, before the decision is taken. That is an obvious target for legal challenge.

Bob Neill from the Conservatives who gave the keynote after-dinner speech on Friday also had a word about the IPC and said the single consent regime would stay, but that national policy statements would need a positive vote in Parliament. He also said that decisions on national infrastructure would be made by politicians thus ensuring democratic accountability. And he promised that cross-examination would be allowed.

It is clear that we must take the new regime seriuosly. The policy statements are going to be very important and Parliament is the opportunity to put one's case. It is an opportunity to be seized.

Streamlining et al (!)- is it just me?

Every announcement from DCLG regarding planning that we read at the moment is pushing the "we must streamline the system/make it more transparent" button. Sounds good to me - but is this what is happening with the commencement, on 1 October 2009, of the first part of the "package of measures" we were told to expect? I don't know about you, but I think things are becoming more rather than less complicated, largely because of mixed messages and "overlapping" consultations.

By way of amendments to the GDPO, the main streamlining effect of this first set of changes appears to be twofold;

1 to introduce a new application form and procedure for s 96A applications (non material amendments - introduced by the Planning Act 2008). These, if granted, would result in the previous permission being amended - no new permission would result.

2 to make it easier to apply to "extend" the time on existing planning permissions. This is where things get complicated. Although the new prescribed form refers to an approval here as "replacing" the original permission, in fact what would happen would be that a second permission would be granted - but with a fresh time period running from its grant. The consultation paper recognised this fact, but both the form and the explanatory note with the statutory instrument (amending GDPO) speaks of "replacement".

Although we have read that this ability to extend only applied to permissions granted on or before 1 October 2009, it is legally possible to make the same application even though the permission is granted later. All we have in the amendment is a simplified procedure (reduced paperwork and no D&A) where the original permission was granted on or before that date (and is extant and not implemented). Otherwise - make an application in the usual way.

The proposed amendment to the GDPO to remove the need to submit a D&A with s.73 applications is part of the current consultation -  "streamlining ..planning applications".

Community Infrastructure Levy - will it work?

I saw an interesting piece in "Planning" today putting forward some views that CIL cannot meet our infrastructure needs. To raise the funds to meet the cost of infrastructure would render development unviable at least in the current climate. Of course, for too many years we have underinvested in infrastructure. CIL is not intended to pay for infrastructure deficit which already exists (although it may often be difficult to know where the line is between pre existing and new infrastructure) and to compare CIL with 106 and say "development won't be viable under CIL or CIL can't raise sufficient funds" ignores the fact that one of the reasons that many developments are stalling now, is that the cost of s 106 provision is prohibitive. Many developers are renegotiating s 106 obligations in order to make  their schemes viable - if they succeed, then to the extent of that success a "deficit" is created.

Under planning gain supplement, the forerunner to CIL, the idea was to cream off some of the increase in land value (on the grant of planning permission)  in order to pay for infrastructure. This focus on land values was fatal to the PGS concept because it drew such opposition. Now the focus is on cost of infrastructure (taking account of central goverment funding) being apportioned across development

 

But scheme viability (an important issue in CIL because the authority should not set a CIL charge which will render development unviable) is driven by a number of factors and a very significant one is the price paid for the land. it may be that for CIL to work, land values must drop/remain low (or at least deals already struck must be revisited) - but somewhere along the line everyone in the property industry (including landowners) must face the fact that the infrastructure must be paid for. Recently  I have seen much more cooperation between Councils/developers to bring schemes forward - it is to be hoped this can continue.

 

A practical problem with CIL (rather than a legal one) is that the payment of it is too front loaded. We need to see proposals for delayed/installment payments and this will assist on viability and help keep land values at an acceptable level for land owners. If land values fall as a result of CIL, many owners will sit on their land and wait for things to change - which may mean we have more CPOs by planning authorities

Validity of officers' decisions

Leeds City Council has got itself into serious difficulties by not being able to trace any lawful authority for the delegation of thousands of planning decisions to case officers. I wonder if this has worried any other local authorities or whether others are confident that they have got their documentation in order.

An objector has challenged one grant of permission in the High Court and the legal costs alone are said to amount to a six figure number. More worryingly, if the Council loses, all affected decisions will be invalid - and no doubt that will cause an administrative nightmare.

Whilst I am not aware that there is any indication that the challenge raises questions of deliberate foul play, it does highlight the need to ensure that all internal authorisation procedures are correctly in place.

Interestingly, the High Court has also made a protective costs order for this challenge, indicating a fairly high degree of public interest in dealing with the matter.

The substantive hearing is listed for late October - we'll be keeping an eye out for the judgment...

August's Conundrum - Whither the tariff?

The conundrum from August's Future Perfect? e-bulletin reads as follows...let us have your thoughts.

One of the most interesting points in the recent CIL consultation paper is the Government's proposal to amend section 106, in order to ensure that section 106 agreements can only be taken into account as a reason for granting permission for CIL development if the obligations they secure satisfy the requirements of Circular 5/05. The CIL consultation paper highlights the fact that LPAs can and do currently seek section 106 obligations that are not essential to allow permission to be granted. It may not be a coincidence that this point comes forward in the consultation paper only a few months after the Secretary of State's decision, in March 2009, at Knockhall Road, Kent. In that decision, the application, by the LPA, of a standard tariff was regarded as inappropriate in the absence of clear evidence that the relevant obligation was necessary. (See our April Future Perfect? for more on this decision.)

It is clear from the consultation paper that, for a number of reasons, the Government now frowns on the use of section 106 to secure "standard charges". This will encourage LPAs to look more seriously at CIL rather than lose the benefit of recovering charges in this "across the board" way. Where LPAs already use section 106 to secure standard charges, the proposal is that the ability to continue with this will be phased out in two years - the idea being that this gives the LPA time to bring in CIL.

So the conundrum for LPAs now is - do we carry on bringing forward emerging standard charge policies or do we immediately work towards CIL so as to make sure we have it in place within two years? And of course, particularly in light of the Knockhall Road decision, this consultation paper and its clear direction in terms of the use of section 106 in the context of pooled contributions, the opportunity is there for developers who are negotiating section 106s to seek to reduce their burden relying on the circular. The conundrum for them is - should I appeal to make the point?