Localism Bill

The drive towards community based planning is a long standing TCPA objective and we welcome the determination to reconnect the system to the people it serves. However, overall questions remain as to whether the neighbourhood planning framework in the Bill is both sufficiently inclusive and flexible to meet the needs of all communities. Questions also remain as to how, in the absence of regional planning, strategic cross border issues such as housing and climate change can be properly considered. The TCPA believes that the planning reform agenda should be shaped by inclusive processes, but also with a clear sense of a positive purpose in delivering the values of sustainable development.

3 . Key considerations

3 .1 The test

The TCPA has applied a series of tests to the planning reform agenda. These include the efficiency and functionality of the system in dealing with housing and climate change, but more profoundly the degree to which the new framework delivers a holistic vision of sustainable development. The TCPA believes that the new planning system must be socially just, both procedurally and in terms of outcomes.

3.2 The overall narrative of planning reform

While this briefing focuses on legislative provisions of the Localism Bill these provisions form only part of a wider package of changes. The introduction of the New Homes Bonus is designed to incentivise housing growth and the National Planning Policy Framework (NPPF) will contain the key national policy direction for planning. The TCPA is also actively investigating how changes to housing policy, such as housing benefit reform, will have on how we plan for housing.

3.3 National Planning Policy Framework (NPPF)

The Government is currently seeking views on a new National Planning Policy Framework with a consultation running until the 28th February 2011 [2] . The final version is expected in April 2012 and it will contain a key definition of sustainable development as well an indication of balance between local and national considerations. Our understanding is that document will be non statutory guidance and non prescriptive. It will contain a new policy of a presumption in favour of sustainable development (this presumption is not included in the Bill as initially stated in Open Source Planning). The NPPF will therefore require detailed attention on the nature of the sustainable development definition and its robustness.

The Bill leaves in place the duty to promote sustainable development under the 2004 Act (Section 39), but this duty does not appear, for reasons explained below, to apply to aspects of neighbourhood planning. There remains a very strong case for strengthening the duty on sustainable development and ensuring it applies not only to plan making (the current position) but to all planning decision making.

3 .4 The structure of the Localism Bill

The Localism Bill is in two Volumes and Part Five of Volume 1 deals with planning. Volume 1 also contains the key structural changes to the 1990, 2004, 2008 and 2009 planning Acts. However, the detail of the new neighbourhood planning process is contained in Volume 2 in Schedules 9 and 10. These schedules are inserted into the 1990 Act which means that they bypass the sustainable development and climate change duties (contained in the 2004 and 2008 Acts) placed on local planning authorities in relation to Local Development Frameworks (LDFs). The Bill, itself, is amending rather than consolidating existing legislation and so it can be hard to gain accurate picture of the final affect. The Explanatory Notes are useful in this regard [3] .

3.5 The abolition of the regional planning tier and new arrangements for strategic planning

As expected, Clause 89 of the Bill abolishes Regional Strategies. There are two measures which deal with the possibility of voluntary strategic planning. The first are the existing powers under the Town and Country Planning Act 1990 for joint planning boards where local authorities can agree to prepare joint development plan documents. The second is the new duty to co-operate.

Clause 90 of the draft Bill contains the new duty to co-operate in relation to the planning of the sustainable development of land. This co-operation relates to the preparation of development plan documents (DPD) and ‘other’ planning matters. This is a significant new duty which will partly be clarified in regulation. However, it is not yet clear that it will be meaningful because it introduces language which will need to be tested carefully. Subsection (2) sets out the scope of the co-operation.

Clause 90

(2) In particular, the duty imposed on a person by subsection (1) requires the person to engage constructively, actively and on an ongoing basis in any process by means of which activities within subsection (3) are undertaken.

While testing ‘constructive’ behaviour at law will be difficult, the degree to which the duty is significant will be dependent on the nature of the joint planning effort. For example, where a joint planning board or committee is established between authorities such a duty may be significant. Where two authorities prepare separate DPDs the duty may simply deliver an exchange of information. In fact, the heart of the duty is a passive requirement to respond if consulted and provide information to assist a planning process (see Clause 90 subsections 4a and 4b). Neither does the duty specify particular issues such as housing and climate change which have a fundamentally cross border character. It has been suggested that the Secretary of State may issue more detailed guidance on what kind of issues might be relevant.

3.6 The Role of LEPs in the Duty to Co-operate

There is already an active debate as to how LEPs will positively exercise their discretion in relation to the extent and form of strategic planning policy. However, it is interesting that the Duty to Co-operate does not apply to LEPs at present because the duty only applies to person or persons who ‘exercise functions for the purpose of an enactment’ (Clause 90 (6)). This means that even though more detailed regulation on which kinds of bodies might be subject to the duty is expected, this could not include LEPs. Therefore the LEP planning role remains entirely voluntary and informal, and they are not bound by any duty on sustainable development, climate change or equality. Nor would any output of a LEP have any statutory weight in planning beyond being a material consideration. It has been suggested that LEPs are the forum for co-operation so that the duty applies to each constituent member rather than the umbrella body. This position reflects the fact that the LEPs have no legal status as a body corporate in their own right. It is therefore very difficult to find a way of amending the Bill to create an effective, if voluntary, basis of joint strategic planning via the LEPs initiative (unless all LEP areas were obliged to have a joint planning board for some issues).

The net affect of the Localism Bill on the nature of strategic planning is therefore profound and poses questions as to how to deal with the wide variety of cross border planning issues. The only pathway for effective strategic planning now open is through the extensive use of joint planning boards to prepare shared development plans. It is as yet unclear how many joint boards may emerge, whether they will be aligned with LEPs, how long this process may take and what resource implications there are.

3 . 7 Neighbourhood Plans

3.7.1 The form of the Neighbourhood Development Plan and Neighbourhood Development Order

Schedules 9 and 10 of Volume 2 of the Localism Bill set out the details of the Neighbourhood Development Plan and Neighbourhood Development Order. The Neighbourhood Development Plan is a community based document which is initiated through a parish council or neighbourhood forum and ultimately adopted by the local authority as part of the development plan. It is a "plan which sets out policies (however expressed) in relation to the development and use of land in a particular neighbourhood area".

The Neighbourhood Development Order (NDO) is also initiated through a parish council or neighbourhood forum and ultimately adopted by the local authority. It is an "order which grants planning permission in relation to a particular neighbourhood area". The Community Right to Build Order is one type of NDO, and initiated by community organisations in relation to a specified site. Councils already have powers to make Local Development Orders under Section 40 of the Planning and Compulsory Purchase Act 2004, which once designated removes the need to seek planning permission if the proposed development is in conformity with the Order. There may be private sector interest in this new system because of the potential financial benefits such NDOs will have to landowners and developers.

3.7.2 The relationship between Neighbourhood Development Plan and the local authority LDF core strategy.

The Localism Bill states (Schedule 10 8 (2)) that the Neighbourhood Plan will have to be in ‘general conformity’ with the local development plan which leaves open the prospect of much local and legal argument. Some issues such as housing numbers will be enshrined in the core strategy and Neighbourhood Development Plans will not be able to overturn them. In one sense this represents a shift in the tension inherent in planning from between regional and local to between local and neighbourhood.

3.7.3 Does the local authority have to support a Neighbourhood Development Plan or Order?

Subject to the tests set out below the answer is yes. However Schedule 4B 3 (2) states that while the local authority must provide advice or assistance, it is not explicitly obliged to give financial assistance.

3.7.4 Who can initiate and prepare a Neighbourhood Development Plan or Order?

Neighbourhood Development Plans and NDOs will be undertaken by Parish Councils in areas where such authorities exist. It is not intended that any other body can initiate neighborhood planning in these areas. In areas without parishes (some 65% of the population), 'Neighbourhood Forums' with be the neighborhood planning body (Schedule 9 Clause 61F 5 a-d). The Localism Bill states that a 'Neighbourhood Forum’ must have a minimum of three people and must pass a series of tests before becoming a qualifying body.

Additional guidance and regulation is intended to ensure that the forum itself is ‘representative’. How this test will be carried out by local authorities in unclear and may be a source of significant delay.

The important outcome of this framework is that neighbourhood planning bodies for rural parished areas and urban areas are starkly different. Parishes are fully constituted lower tier elected councils with clear rules on the disclosure of interests and bound by duties applying to public bodies. They are also democratically accountable. The urban neighbourhood forum has none of these safeguards. It has been suggested that the local authority should take a stronger role in the formulations and support of the forum in order to ensure the legitimacy of the process. This would require significant amendment to Schedule 9.

3.7.5 The Neighbourhood Development Plan and Neighbourhood Development Order adoption process.

Neighbourhood plans have a powerful legal status which makes the process of adoption complex. This raises important questions about the accessibility of the system for some communities who may not have the social or financial resources to engage in the process. The timescales involved in the preparation of the plans may also be significant. An outline of the process is set out below.

Community Initiation and Proposal

· Parish or Neighbourhood Forum initiates the process for the purpose of requiring the LPA to make a Plan or Order.

· The local council would have a duty to provide support and to ensure compliance with other legal requirements

Community Compliance Requirements

· Parish or Neighbourhood Forum conducts SEA etc at their own cost

· Parish or Neighbourhood Forum submits draft Plan or Order

Local Planning Authority Consideration

· Local authority considers and carries out screening assessment on draft Plan or Order to ensure it is legally fit.

Examination and Inspector’s Report of Recommendations

· There will be a light touch examination of the plan by an independent assessor to ensure that it complies with legal requirements and national policy, and is aligned with neighbouring plans and the strategic elements of the local development plan. The assessor cannot be a Government employee or the Planning Inspectorate. This raises a very serious issue as to competence and independence of the assessor. There are legal issues in relation to independent tribunal. Examination will be by written representation only and the ‘right to be heard’ in person which is a key legal right in Local Development Framework system will be lost. The equalities issue of this move are very important. While the nature of the test does include compliance with EU Human Rights legislation it does not explicitly include reference to equalities legislation [4] .

· Non-binding report of examination based on test against the national planning policy framework and development plan

Local Planning Authority Consideration of Inspector’s Report

· The local authority tests compatibility with UK and EU legislation or other prescribed matters.

Referendum

· The local authority can set the area of the referendum to just the parish or whole district or somewhere in between.

· A referendum (with a simple majority in favour - 50% plus 1 vote) would ensure that the final plan had public support. Referendum would be paid for by the local authority.

Adoption

· The local authority will have a duty to adopt a legally compliant Neighbourhood Plan that has been successfully passed by a referendum.

3.7.6 The application of the existing sustainable development and climate change duties to neighbourhood planning

Schedule 9 of the Localism Bill, which sets out many of the requirements of neighbourhood planning, will be introduced by amending the 1990 Planning Act (the principle Act). Therefore the clauses on neighbourhood planning in the Localism Bill do not fall under the general requirements of the 2004 and 2008 Planning Acts in relation to the process of plan making (Part 2 of the 2004 Act as amended does not apply to neighbourhood planning. NDOs and NDPs become part of LDF by amendments to part 3 of the 2004 Act)

The result is that none of the duties placed upon LPAs in relation to LDF preparation on sustainable development, climate change and design would apply to the process of neighbourhood planning. It is the intention that the local authority has the opportunity to test the Neighbourhood Plan before adoption and could seek to amend it. This retrospective approach could make it more challenging to ensure that any plan is fit for purpose in relation to climate change because low carbon principles would, for example, have to be retrofitted at the end of the process. The counter argument is in two parts:

· First that applying the duties would complicate the neighbourhood planning process

· That the local authority would be able to advise on the importance of these issue in the preparation process.

This raises some important considerations. First, the local authority will have to apply these duties retrospectively, but before final adoption, in an honest and effective approach to ensure communities are aware of the obligation upfront. The duties are not severe, but designed to direct the decision-maker’s attention to embedding the core principles of planning from the outset in order to shape places which deliver high quality and inclusive places.

Second, the advice of a local planning authority on the importance of these issues does not equate to a legal duty on the primary decision making body making the plan (in this case the Parish Council or neighbourhood forum). The elevation of sustainable development, climate and design to legal duties was a signal from parliament as to their primary importance in the planning process.

Neighbourhood plans will have to have regard to the NPPF, which will contain the definition of sustainable development and other national priorities. However the NPPF cannot place any powerful legal duties on the decision-maker because its status is that of policy and guidance. Decisions must have regard to such guidance but this is not a legal duty. Indeed, the inclusion of the climate duty in the 2008 Act was a conscious attempt to remedy the failure of guidance to drive sufficient change in planning practice.

Amending the Bill to ensure the duties do apply to neighbourhood plans is straight forward. However, while other duties on equality do apply to parish councils as public bodies it is uncertain as whether they would apply to a neighbourhood forum. It is imperative that any legal plan making body is subject to the duty on equality and therefore the neighbourhood forums should have the same duties on them as the parish councils.

3.7.7 Excluded categories of development

Clause 61l of schedule 9 of the Localism Bill describes development which is excluded from Neighbourhood Development Orders. These include:

· Certain county matters such as all minerals development

· Schedule 1 projects for EIA including waste incineration

· Any major infrastructure projects defined in the 2008 Planning Act

This list should be read with the requirements for conformity with Local Development Framework (LDF) and NPPF which would remove debates over housing numbers and raise an interesting question as to whether such plans will satisfy many community expectations about the scope of neighbourhood planning.

3.7.8 Funding for Neighbourhood plans

A key issue is that communities will have to fund their own Neighbourhood Development Plans and Orders. Under the Neighbourhood Planning Vanguards Scheme, selected local authority will receive a grant of up to £20,000 to meet their costs of supporting the work [5] but this is not directly for communities. In addition, the Planning Aid budget (£3m) will be divided into £500,000 blocks and given to selected organisations to fund national advice services. A prospectus has been issued inviting bids. [6] This is designed to introduce competition into the market place for advice. The Department for Communities and Local Government now estimate the costs of Neighbourhood Plans as between £5,000 and £250,000. To give an example of the costs, communities will have to fund their own Strategic Environmental Assessment (SEA) of their plan depending on the level of its complexity.

The private sector is a potential source of funding for neighbourhood planning and is investigating ways to pay for community plans. Issues of impartiality and independence are key here. Much of the detail will be in regulation which will be issued on the day the Bill gets Royal Assent.

3.7.9 Improving the neighbourhood planning provisions

The TCPA has long track record in promoting community participation. The Localism Bill offers a route for communities that is procedurally complex but ultimately powerful in law. There are questions over access to the neighbourhood planning process for those communities who lack the social and financial capital to navigate the system. While the concern to ensure neighbourhood planning has a powerful outcome is a valid aspiration for some communities, it should not be seen as the only route to empowering people. There should be an active debate on how more informal plans and community visions, which might suit the needs of many places, can be properly integrated and respected in the planning process. These less formal expressions of community aspiration provide the flexibility to have differing kinds of ‘conversations’ about development with the diverse sets of communities which exist in many parts of England. The TCPA is actively considering how a fuller range of community empowerment options might be enshrined in the Bill.

3.7.10 Community Right to Build Provisions

The proposals for the Community Right to Build on a specified site are enabled by setting up a variation of a Neighbourhood Development Order. It will undergo a similar preparation process as the Neighbourhood Development Order. The local authority is required to assess the proposal for Environmental Impacts Assessment (EIA). With these issues considered, the Community Right to Build may be effective in some areas; however the number of homes planned and delivered through this route is not likely to be that significant compared to the scale of housing need in the country.

3.7.11 Changes to the LDF Framework.

The Localism Bill makes changes to the LDF preparation process in relation to the Local Development Scheme, Annual Monitoring Report and the binding nature of the inspectors report (See Clauses 90 and 91). Ultimately the effect of these changes is to give greater discretion to the local authority on how LDFs proceed. It is significant that local planning authorities will now almost exclusively be held to account by their electors for their planning performance. For example, it will be for local communities to ensure that housing and carbon are dealt with adequately with much less intervention from central government. This raises very difficult issues on how the sum total of local authority decisions can be accounted for in relation wider national imperatives for, for example, social housing.

4 . Initial Conclusions

This is a historic planning reform Bill with major implications for all parts of the planning system. Final judgement on the effectiveness and fairness of the new regime depends not just on the extensive forthcoming regulations, but on the impact of the NPPF and the new incentives regime for housing. However, it is possible to conclude that the new neighbourhood planning system is procedurally complex with consequent questions over who and how the costs of delivering such plans will be met. There also remain questions as to the degree to which the duty to co-operate can deliver effective strategic cross border working on housing and climate.

January 2011