Memorandum by National Grid plc (AH 50)
EXECUTIVE SUMMARY
1. This submission is made on behalf of
National Grid plc, to the Inquiry into "Affordability and
the Supply of Housing".
2. National Grid plc is a group of companies
who own, operate and develop a substantial part of the national
gas and electricity transportation systems. National Grid Property
Holdings Ltd, as part of the National Grid group, manages the
Group's extensive estate portfolio. Its main activities are the
reclamation and disposal of formerly operational gas and electricity
sites and the provision of property services to Group companies
to meet their occupational requirements. In its property management
and disposal role, the Company becomes significantly involved
in the planning system.
3. Where operational land is no longer required,
National Grid seeks to promote the re-use of such redundant, usually
contaminated brownfield sites, and their regeneration by their
redevelopment.
4. The type, scale and balance of different
uses that can be promoted on any one site are critical to the
viability of contaminated brownfield sites. This is not always
accepted by Local Planning Authorities (LPAs), in terms of the
scope of redevelopment that they will be willing to support in,
or in the context of any Development Plan Document policy, a Supplementary
Planning Document (SPD) or existing "saved" Supplementary
Planning Guidance (SPG), in pre-application discussions and in
determining any planning application that might follow. In development
plans and non-statutory policies, it is often the case that where
an LPA is aware that the Company's operational land is to become
available for redevelopment, depending on a site's scale and location,
it is either entirely allocated for employment eg business use,
or for mixed uses, including housing, but still with a significant
amount of business floorspace. If unallocated, it is presumed
that the industrial use will be replaced by new employment uses.
5. The Company's sites are often adjacent
to and surrounded by long-established residential areas and within
built-up areas. In such cases, predominately residential re-use
is generally the most appropriate. In spite of this, some LPAs
persist in seeking a high proportion of employment uses inappropriate
to a site's location. Such uses are unlikely to be attractive
to investors, developers and occupiers alike, with the result
that the overall viability and feasibility of regeneration of
the site in question is called into serious doubt.
6. Where a National Grid site is in or adjacent
to an existing employment area, it is not uncommon for its allocation
to be as an extension to that area (perhaps including minor, ancillary
local service uses for employees). This type of "blanket"
allocation is totally inappropriate, as it can render a site's
redevelopment unviable when the high costs of remediation are
taken into account. If this happens and a LPA will not accept
mixed uses, including a high proportion of housing, National Grid
have no choice but to let such sites fall into disuse. This is
in conflict with Government policy prioritising the re-use of
brownfield urban land and against the Company's objectives for
managing their land and property interests.
7. Such narrow land allocations and policy
approaches to the regeneration and redevelopment of National Grid
land are contrary to up-to-date Government policy in PPS23, "Planning
and Pollution Control" (2004) and in the "Update to
PPG3: Housing: Supporting the Delivery of new Housing" published
on 24 January 2005.
8. In our client's experience so far this
year, this newly strengthened policy guidance to promote alternative
uses of contaminated industrially-allocated land or redundant
industrial sites—and particularly that advice in the first
and third bullet points of para. 42(a) of PPG3—is not being
taken on board by many LPAs. It should be being used in formulating
policy in Local Development Documents and in development control
decisions, to speed the re-use of National Grid's redundant operational
land for housing to meet the very considerable housing need identified
at regional and local levels, and where appropriate, for mixed
uses.
9. Given recent and fundamental changes
to the planning system, which will take time to "bed down"
and be fully understood, it is essential that there are no further
changes to the planning system to confuse users. The publication
of comprehensive, clear, consistent and concise guidance from
central Government on the new development planning and control
elements should be a principal objective now, to enable the development
industry and LPAs to work together, towards their mutual goals
of providing sufficient land for good quality housing in sustainable
communities. The awaited draft PPS3 should encourage a flexible
approach at local level for LPAs to re-consider industrially/employment-allocated
sites, prioritising their use for housing, particularly if they
are contaminated.
10. A further barrier slowing (and even
preventing) the development of National Grid's sites for housing
relates again to the high costs of remediation and the additional
burden these place on development feasibility and viability-but
this time in terms of s106 obligations. The Government and LPAs
need to recognise that overly onerous s106 infrastructure provision
requirements may prevent a site's redevelopment in such circumstances,
even if it is viewed favourably in policy and land allocation
terms.
1. INTRODUCTION
1.1 This Memorandum of evidence is submitted
on behalf of National Grid plc in response to the Committee Office
at the House of Common's invitation of October 2005 to submit
written evidence relating to the newly announced ODPM: Housing,
Planning and the Regions Committee Inquiry into "Affordability
and the Supply of Housing".
1.2 The issues which the Inquiry wishes
written evidence to address have been noted and in this Memorandum,
the following are discussed:
— "How the planning system should
respond to the demand for housing for sale; and
— The scale of housing development
required to influence house prices and the impact of promoting
such a programme on the natural and historical environment and
infrastructure provision."
2. BACKGROUND
2.1 National Grid plc is a group of companies
which own, operate and develop a substantial part of the national
gas and electricity transportation systems. National Grid Property
Holdings Ltd, as part of the National Grid group, manages the
Group's extensive, estate portfolio. Its main activities are the
reclamation and disposal of formerly operational gas and electricity
sites and the provision of property services to Group companies
to meet their occupational requirements. In its property management
and disposal role, the Company becomes significantly involved
in the planning system.
2.2 At the outset, we should explain in
more detail the character and nature of the Group's land and property
interests, and the importance of the viability and feasibility
of redevelopment schemes for contaminated, brownfield land. Where
operational land is no longer required, National Grid seeks to
promote the re-use of such redundant brownfield sites and their
regeneration—some have been vacant and unused already for
a period of time, whereas others will cease to be used and disposed
of as soon as possible thereafter. In all cases however, National
Grid aims to achieve the regeneration of these formerly operational
sites by their redevelopment.
2.3 The type, scale and balance of different
uses that can be promoted on any one site are critical to the
viability of contaminated brownfield sites. This is not always
accepted by LPAs, in terms of the scope of redevelopment that
they will be willing to support in the context of Development
Plan Document (DPD) policy, in any Supplementary Planning Document
(SPD) or in terms of existing "saved" Supplementary
Planning Guidance (SPG), in pre-application discussions and in
any determining planning application that might follow. In development
plans and non-statutory policies, it is often the case that where
an LPA is aware that the Company's operational land is to become
available for redevelopment, depending on a site's scale and location,
it is either entirely allocated for employment eg business use,
or for mixed uses, including housing, but still with a significant
amount of business floorspace. If unallocated, it is presumed
that the industrial use will be replaced by new employment uses.
2.4 The Company's sites are, however, often
adjacent to and surrounded by long-established residential areas
and within built-up areas. In such cases, predominately residential
re-use is generally the most appropriate. In spite of this, some
LPAs persist in seeking a high proportion of employment uses,
inappropriate to the location and unlikely to be attractive to
occupiers. This approach calls the overall viability and feasibility
of regeneration of the site in question into serious doubt. Where
a National Grid site is in or adjacent to an existing employment
area, it is not uncommon for its allocation to be as an extension
to that area (perhaps only additionally to include minor, ancillary
local service uses for employees). Once again, this type of `blanket'
allocation is totally inappropriate, as it can render a site's
redevelopment unviable when the high costs of decontamination
are taken into account. If this happens and a LPA will not accept
mixed uses, National Grid have no choice but to let such sites
fall into disuse, an inaction which is in conflict with Government
policy prioritising the re-use of brownfield urban land and which
is against the Company's objectives for managing their land and
property interests.
2.5 In both cases, such narrow land allocations
and policy approaches to the regeneration and redevelopment of
National Grid land are entirely contrary to up-to-date Government
policy in PPS23, Planning and Pollution Control (2004)
and in the Update to PPG3: Housing: Supporting the Delivery
of new Housing, published on 24 January, 2005.
2.6 Annex 2 of PPS23 refers to the development
of land affected by contamination. At para 2.28, the "legacy
of contamination" from industrial development is recognised,
with gasworks and power stations being two of the industrial uses
listed (Table 2.1) as historically having contaminated their sites,
or having had the potential to have done so. Para 2.28 refers
to the positive role that regional spatial strategy preparation
can have "in identifying strategies and priority areas for
regeneration", noting that "widespread concentrations
of previously developed land are likely to be regarded as high
priority for redevelopment". Para 2.29 refers then to LPAs'
Local Development Documents (LDDs) providing "a prime opportunity
to steer appropriate development onto previously developed land"
and to this helping,
" . . . within the context of the wider
planning policies within an authority area. As well as protecting
greenfield sites to bring about progressive improvement in the
condition of land as a whole, provided that any contamination
is identified and properly dealt with and the development is carried
out in an appropriate manner. In preparing and revising LDDS,
therefore, LPAs need to take into account any potential implications
of land contamination. They should include appropriate policies
for the remediation of contamination where it is known or suspected
to exist and for dealing with the implications of contamination
for other policies and proposals. In particular, LPAs should recognise
that the development process is often the most effective way of
achieving action to remove unacceptable risks arising from the
contaminated state of land. Where action area plans are prepared
that include significant tracts of previously developed land,
LPAs should consider the need for a phased approach to dealing
with potential contamination issues."
2.7 Paras 2.30 and 31 continue:
"Contamination may add to the difficulty
and cost of developing a site or even preclude certain uses. In
particular, the remediation of polluted groundwater can be expensive
and more time-consuming than the cleaning-up or removal of contaminated
soil . . .
2.31 Identification of potential problems
at an early stage can enable a more positive approach to bringing
forward development, thereby leading to a higher value land use,
which in turn, could better cover the costs of remediation. Early
attention to the contamination issues can help in locating development
that is less sensitive to contamination on areas where the contaminated
state of the land is likely to be more difficult to address. Proposals
for particular types of development in different parts of an authority
area need to take account of potential contamination alongside
other material considerations They need also to take into account
issues of sustainability, disturbance to existing occupiers and
environmental issues (dust, noise, odours etc.) which might arise
from the contamination."
2.8 New para 42(a) of PPG3 states:
"42(a) Local planning authorities should
consider favourably planning applications for housing or mixed-use
developments which concern land allocated for industrial or commercial
use in saved policies and development plan documents or redundant
land or buildings in industrial or commercial use, but which is
no longer for such use, unless any of the following apply:
— the proposal fails to reflect the
policies in this PPG (including paragraph 31), particularly those
relating to a site's suitability for development and the presumption
that previously-developed sites (or buildings for re-use or conversion)
should be developed before greenfield sites;
— the housing development would undermine
the planning for housing strategy set out in the regional spatial
strategy or the development plan document where this is up-to-date,
in particular if it would lead to over provision of new housing
and this would exacerbate the problems of, or lead to, low demand;
— it can be demonstrated, preferably
through an up-to-date review of employment land[107]
(refer to Annex D for practice guidance), that there is a realistic
prospect of the allocation being taken up for its stated use in
the plan period or that its development for housing would undermine
regional and local strategies for economic development and regeneration".
2.9 In National Grid's experience so far
this year, this newly strengthened policy guidance, to promote
alternative use of industrial, allocated land or redundant industrial
sites, is not being taken on board by many LPAs, whereas it should
be being used in formulating policy and in development control
decisions to speed the re-use of National Grid's redundant land
for housing, to meet the very considerable housing need identified,
and for mixed uses where appropriate.
3. THE PLANNING
SYSTEM'S
RESPONSIVENESS TO
THE DEMAND
FOR HOUSING
FOR SALE
3.1 The fundamental changes to the planning
system being introduced as a consequence of the Planning and Compulsory
Purchase Act 2004 are already posing very considerable difficulties
for the development industry, the general public and LPAs alike.
The new systems are seen to be overly complex, fragmented, inconsistent
and overall, as they all require so much consultation, they are
only lengthening the formerly experienced delays in policy formulation
and application determination. One undesirable exception to this
is the crude target timetable-driven criteria for Planning Delivery
Grant awards, leading to sudden and unwarranted refusals without
allowance for negotiation and, where necessary, amendments of
applications.
3.2 There is ongoing confusion as to the
best way in which to implement both the new development planning
and development control changes, especially as a consequence of
a plethora of policy and other guidance from central Government
which lacks clear direction. Many of the difficulties being increasingly
experienced by National Grid in relation to releasing its brownfield
land for development have been due to the recent changes to the
planning system, especially as LPAs navigate the course towards
Local Development Framework (LDF) adoption. It is important therefore
that in these times of change and uncertainty, the planning system
is allowed and encouraged to "bed-down", without any
new and further changes being proposed to the system, and with
a more concise and consistent policy direction from central Government
emerging, which will minimise the risk of misinterpretation.
3.3 The outcome of the Barker Review (2004)
[108]on
housing has been that it has placed considerable pressure upon
the Government and LPAs to increase the elasticity of housing
supply in the UK, by encouraging an increased responsiveness to
housing demand. For National Grid, it has been difficult to respond
to such increased housing demands by bringing forward more of
their redundant sites for housing more quickly, in view of the
constraints imposed by the infancy of the new development planning
system, LPAs not releasing industrially-allocated sites from employment
use and the limitations of `saved' policies in the interim, in
conjunction with other more site specific barriers relating to
feasibility and viability which prevent contaminated brownfield
land from being brought forward for development quickly, if at
all.
3.4 To ensure that LPAs are in a position
to respond to demand for housing for sale, National Grid considers
that the only further change that should be made to the planning
system should be new and clear policy guidance provided by central
Government in draft PPS3, Housing, to allay any possible confusion
over the future residential use of industrial land, including
sites currently allocated for employment in statutory and non-statutory
(adopted and emerging) policies. In this new policy document,
it will be vital that central Government prioritises and addresses
the barriers which prevent otherwise suitable brownfield but contaminated
land from being brought forward for housing development.
4. BARRIERS PREVENTING
BROWNFIELD LAND
FROM BEING
BROUGHT FORWARD
FOR HOUSING
FOR SALE
4.1 As outlined above, National Grid is
experiencing very considerable difficulty in developing its often
contaminated, formerly operational brownfield sites either for
housing, or for mixed uses where appropriate. Sites are often
allocated for future industry/employment use within development
plans or non-statutory policies. In many cases, future employment
use for these sites is not a viable option and if their future
use is not readdressed by the LPA with site specific flexibility,
the sites remain vacant and undeveloped, to the benefit of no
one.
4.2 National Grid sees the role of the planning
system as critical in helping to meet the housing shortage in
the UK. Prioritising and promoting contaminated brownfield industrial/employment
land to be redeveloped for housing should be unencumbered, to
encourage a steady flow of housing supply on such sites over the
coming years. Redundant former operational land provides an ideal
opportunity to contribute to the supply of land for this purpose.
4.3 National Grid believes that in the new
PPS for housing, the ODPM should encourage a more flexible local
policy approach to housing provision on contaminated and other
industrial land within Local Development Frameworks, to reflect
directly and specifically the local context and the new paragraph
42(a) in PPG3. LPAs should therefore be including in their emerging
DPDs and SPDs a policy stance, site allocations and site specific
policies promoting housing (and mixed use developments, where
appropriate) on land formerly allocated for industrial or commercial
use in saved policies, or on redundant land or for buildings in
industrial or commercial use which are no longer needed for such
uses. Despite this policy guidance being set out in PPS23 and
in revised PPG3, National Grid is finding that central Government
policy guidance is not being translated into local level policy
and decision-making, as this guidance is all too often not being
embraced by individual LPAs.
4.4 National Grid is aware that LPAs are
over-stretched in terms of resources at present and this, combined
with considerable pressure to ensure that the preparation procedures
for their DPDs are being correctly followed (particularly as regards
achieving community involvement), perhaps explains their current
"precautionary" approaches and their reluctance to break
from the "safe" trajectory of their saved development
plans and policies, and instead, look more flexibly at re-using
industrial land (such as National Grid's redundant but often contaminated
operational land) predominantly for meeting housing needs.
5. THE NEED
FOR BROWNFIELD
LAND TO
BE USED
TO MEET
HOUSING NEED
5.1 According to recent research by FPD
Savills (Land Issues—Autumn, 2005), the ODPM's National
Land Use Database identifies 64,000 hectares of brownfield land,
26,000 hectares of which are still in use and 38,000 of which
are vacant. What this database does not reveal is what proportion
of the brownfield land is contaminated and liable to high remediation
costs and what proportion available can then be developed for
housing. This research document suggests that a mere 27% (17,500
hectares) of the land identified, is currently allocated for housing.
This indicates that there is considerable scope for a greater
proportion of brownfield land to be considered for housing use,
but that this is being constrained by high remediation costs and
unsuitable land allocations in policy documents.
5.2 Some LPAs have taken it upon themselves
to commission employment and housing capacity studies to determine,
amongst other matters, the viability of losing employment land
for the purpose of housing. Such research is desirable if LPAs
are to be reassured that the re-use of redundant employment land
for housing is justifiable. In fact, many LPAs depend upon such
studies to decide the correct course of action in determining
applications. These studies can take several months to prepare
and given the already lengthy lead-in times associated with development
of brownfield land, it is clear that further delays awaiting the
outcomes of such studies will only serve to restrict housing supply
overall and lead to a failure in meeting housing demand forecasts.
5.3 A significant proportion of the employment
land allocated in development plans, and being referred to in
policies in emerging DPD Core Strategies is unlikely to be developed
for such use. Location is fundamental to ensure that businesses
keep abreast of economic performance, and the allocation system,
whereby land is set aside within policy documents for an intended
future use, whilst necessary, can fail to reflect market demand
sufficiently. It also fails to recognise the viability and feasibility
issues outlined above, when contamination has to be treated and
costly remediation works undertaken prior to re-use. This being
the case, it is likely that many of the sites allocated for employment
will remain undeveloped. Saved policies and emerging LDFs, if
produced without an understanding of market demand and the industries
involved, thus prove a barrier to housing and economic growth.
Housing as a potentially more suitable, economic and feasible
use for such sites should therefore always be considered by LPAs
as a matter of course in formulating development plan policies,
in reviewing/making site allocations and drafting non-statutory
SPDs, to demonstrate that a flexible approach to market demand
and the changing local contexts has been taken.
5.4 National Grid appreciates the importance
of allocating land within DPDs for LPAs and the business community
alike to make projections and forecasts. However, there should
be more flexible mechanisms in place to challenge those employment
land allocations which are "carried over" from saved
policies, or which are made afresh and which do not reflect changing
market and local conditions as necessary.
5.5 Mechanisms to provide this flexibility
should be implemented; where employment and housing capacity studies
have not been commissioned by an LPA, the LPA should acknowledge
and support private sector planning briefs and feasibility reports
which validate the need and case for housing on industrial land
either proposed in policy or allocated for employment. This would
prevent the precautionary approach currently taken by LPAs and
allow them to determine such applications on a site by site basis,
allowing for both objectivity and flexibility in the decision-making
process. The level of contamination should also be a consideration
in a prioritising system for sites being brought forward for re-use
for housing.
5.6 There should also be a presumption in
favour of applications supported by an analysis of feasibility
based on remediation needs which promote the use of contaminated
redundant industrial land allocated or proposed in policy for
employment, for housing instead, where up to date employment and
housing capacity studies do not exist. This was in fact a recommendation
in the Barker Review. Recommendation No 9 acknowledged that for
housing proposals, "developers should be able to submit applications
for any site allocated in the plan, subject to the conditions
of the revised sequential test being met". A sequential test
approach of the type suggested in the Review could include a "prioritising"
and contamination criterion, to help determine whether housing
use for employment-allocated land is acceptable. This would have
the effect of encouraging greater flexibility at the LPA level.
6. INFRASTRUCTURE
PROVISION
6.1 The formerly operational sites of National
Grid are often large. In some cases, mixed use development, including
a substantial volume of housing, may offer a more viable proposition.
Due to the fragmented nature and diverse content of mixed use
developments however, there is often an inherent and higher risk
attached to such schemes. This, combined with the constraints
of developing on brownfield sites which have their own costs attached,
such as remediation costs, can threaten the viability of development
more than with a smaller, solely residential scheme. This should
be noted by both Government and LPAs when considering the terms
of planning obligations and negotiating on infrastructure provision.
Infrastructure is often fundamental to the viability of a scheme
but the cost, which is increasingly being borne by the developer,
can pose an additional barrier to the development of contaminated
brownfield land.
6.2 LPAs often have little understanding
of the complex nature of redevelopment of contaminated brownfield
land and as a consequence, often demand overly onerous planning
obligations, the terms of which can jeopardise the viability of
a scheme whether for housing or for mixed uses. The holistic value
attributed to the local area in the redevelopment of a redundant,
contaminated brownfield site, may it be for housing or mixed uses
including residential, should be considered at the time of negotiation,
so as to ensure that ensuing infrastructure or other "requirements"
do not pose a further barrier to implementing any planning permission
for redevelopment and achieving regeneration.
107 "Employment Land Reviews: Guidance Note"
ODPM 2004. Back
108
Barker, K: Review of Housing Supply Final Report-Delivering Stability:
Securing Our Future Housing Needs. HM Treasury, 2004. Back
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