Written evidence from Hogan Lovells International
LLP (ARSS 45)
on behalf of Argent Group Plc, Baker Associates, CJC Development
Company Ltd,
The Church Commissioners for England, Crest Nicholson Limited,
Fairview New Homes Limited, Gleeson Strategic Land Limited, Hogan
Lovells International LLP, Property Development Specialists and
Welbeck Land Limited
1. INTRODUCTION
TO THE
SIGNATORIES TO
THIS SUBMISSION
1.1 This evidence
is submitted by Hogan Lovells International LLP ("Hogan Lovells").
Hogan Lovells is an international law firm with 2,500 lawyers
operating out of more than 40 offices around the world. In London,
Hogan Lovells has wide experience acting on significant development
projects and the firm has a pre-eminent group of specialist practitioners
involved in the field of town and country planning.
1.2 Hogan Lovells
is submitting this evidence on its own behalf and also on behalf
of a number of other signatories who are listed at the end of
the evidence. These signatories represent property developers,
consultants and other advisers who are deeply involved in town
and country planning. In particular, they have had direct experience
of the consequences which have flowed from the abolition of the
Regional Spatial Strategies and the implications of that abolition
for the commercial property sector. On 1 September Hogan Lovells
hosted a discussion session regarding the abolition of regional
strategies and it is from those discussions that these representations
have been formulated.
2. EXECUTIVE
SUMMARY OF
THE SUBMISSION'S
MAIN POINTS
2.1 The following
is a summary of the submission's main points.
(a) The revocation
of regional strategies has created in some places a policy vacuum
resulting in uncertainty for the development industry, delay in
local development frameworks being progressed, delays in planning
applications being determined and some development projects being
put on hold or abandoned.
(b) These uncertainties
and delays are leading to a slow down in the delivery of much
needed housing development thereby frustrating economic growth.
(c) Regional
differentiations mean that the effects of the abolition of regional
strategies varies from one region to another and within regions.
The abolition of regional guidance and the housing targets in
particular is being used by those opposed to development as a
means of slowing down development approvals and the delivery of
new housing.
(d) In the absence
of guidance at a regional level, national policy (in PPS3 in particular)
is absolutely vital to housing delivery. Clarity is required on
how authorities should calculate housing need to achieve consistency.
(e) Some housing
markets cross local authority boundaries. It is essential that
a means of achieving co-operation between local authorities within
a region is put in place as soon as possible. The proposed statutory
"duty to co-operate" is likely to be too vague to achieve
the required levels of co-operation. More certainty is required
on this issue.
(f) Insufficient
detail currently exists regarding the proposed incentives based
system. However, financial incentives are open to abuse and are
unlikely to lead to better planning. There is a risk that local
authorities will be motivated by the amount of financial gain
on offer rather than ensuring that the right development is delivered
in the right place meeting appropriate need.
(g) If incentives
are to be introduced, the way in which they are distributed and
applied needs to be established. Incentive funding should be used
for purposes related to the development which has given rise to
the incentives being paid.
(h) Whilst the
focus on the effects of the abolition of regional strategies has
understandably been upon the impact for the delivery of housing
development, there are other important issues to be considered.
In particular, the delivery of important infrastructure which
underpins housing and other development is of deep concern.
3. THE SUBMISSION
3.1 This submission
addresses a number of the issues raised in the Inquiry terms of
reference. It addresses in particular (i) the implications of
the abolition of regional house building targets for levels of
housing development; (ii) the need to ensure cooperation between
local authorities on matters formerly covered by regional plans;
(iii) the likely effectiveness of the Government's plan to incentivise
local communities to accept new housing development; and (iv)
other issues.
(i) The implications of the abolition of regional
house building targets for levels of housing development
4. Uncertainty/Delay caused by the abolition
of targets
4.1 Within the
short term the revocation of regional strategies and the absence
of any clear interim guidance has created in some places a policy
vacuum resulting in severe uncertainty for the development industry.
That has manifested itself in various ways, including:
(a) a delay
occurring in relation to the progressing of Local Development
Frameworks ("LDFs") (particularly pending announcements
by the Government of further revisions to the LDF system);
(b) a delay
in planning applications being processed and determined; and
(c) certain
development projects being put on hold or even abandoned by those
promoting them. This has been particularly acute for large residential
schemes (eg 1,000 plus units) which relied heavily on regional
guidance to support and justify such proposals in the absence
of up to date adopted local policy.
4.2 The uncertainty
relates principally to the general policy context within which
all of the above issues need to be considered. Ultimately the
uncertainty/delay is leading to a slow down in the delivery of
much needed housing development.
4.3 There are
numerous examples of Councils delaying or withdrawing their Core
Strategies. The latest example is Aylesbury District Council which
on 8 September was considering a recommendation to withdraw its
Core Strategy from the examination process.
4.4 There are
also examples of developers facing delays in being able to progress
development schemes, particularly on large strategic sites which
rely upon the policy context provided by the regional strategies.
4.5 Some examples
of residential development sites which have been delayed are:
(a) Calne, Wiltshire—a
developer has been promoting a site for 200-250 units through
the Core Strategy. The site was considered favourably within the
Council's "Options" consultation in 2009. The Developer
envisaged a planning application in 2010 and had been working
up to this in 2009. However due to the uncertainty in policy and
changes to proposed housing numbers and distribution an application
has been delayed.
(b) Malmesbury,
Wiltshire—similar issues as (a) above on another scheme
of 200-250 units. Due to uncertainty over policy at a national
level the site is now to be promoted through the delayed Core
Strategy.
(c) Honiton,
Devon—a site for around 100 units within East Devon was
being promoted through the Core Strategy as a potential strategic
allocation. Since revocation of the regional strategies housing
numbers have been reduced and the quantum of growth attributed
to Honiton has been reduced. The submission of a planning application
has accordingly been postponed.
5. An opportunity for opponents of new housing
development
Supporters of the regional strategies and the housing
numbers which they contained saw them as providing a means of
ensuring that housing development would be delivered, particularly
within those areas where local authorities and communities are
resistant to additional housing development. The revocation of
the regional strategies is accordingly being treated as an opportunity
to slow down or even frustrate approvals for new housing development
by those who are opposed to it. However, in circumstances where
the "need" for new housing remains pressing no evidence
base has been established to justify this approach.
6. Regional Differentiations
6.1 In considering
the implications of the revocation of regional strategies, it
is important to understand the regional differentiations which
exist regarding the approach to new development generally and
new housing development in particular. Whilst it is dangerous
to generalise, it is often the case that opposition to housing
development is most acute in those areas which are under greatest
pressure in terms of the need to provide more housing and the
scarcity of land available upon which to provide it. It is for
this reason that the greatest resistance to the housing numbers
set out in the regional strategies was from those local authorities
and communities faced with the greatest challenges to deliver
the housing numbers. In assessing the implications of the abolition
of regional strategies it is therefore important to bear this
distinction in mind and to appreciate that, as a result, the implications
have been very different from one region to another. These regional
differentiations are also important when considering the question
of "incentives"—see section (iii) below.
6.2 Whilst the
focus of the inquiry is into the implications of the abolition
of the regional strategies in relation to house building targets,
it is also important to understand that there are implications
for other forms of development, particularly infrastructure delivery
(see section (iv) below). The abolition of regional strategies
and the "policy vacuum" and uncertainty which has been
created means that developers now lack the necessary planning
policy context to pursue many development projects. A combination
of the lack of confidence in the policy context and a lack of
confidence that important infrastructure which underpins development
will be delivered, has resulted in developers either delaying
or abandoning projects. That in turn will have adverse effects
for the economy and will jeopardise economic recovery and growth.
In short, development in general and house-building in particular
is critical to achieving economic growth, a particularly pressing
concern in the current economic and financial climate.
(ii) The need to ensure cooperation between
local authorities on matters formerly covered by regional plans
7. Co-operation between local authorities
7.1 In
the absence of "overarching" planning policy at the
regional level under which local authorities are obliged to pursue
clear targets and objectives, the issue of co-operation between
local authorities becomes absolutely fundamental. Co-operation
will be essential to ensure a co-ordinated approach towards the
delivery of development and essential infrastructure, which will
in turn secure economic growth. These issues are particularly
problematic where development and infrastructure has to be delivered
across wide areas including across local authority boundaries.
7.2 Until
their abolition, the regional strategies acted as a framework
within which the development and infrastructure required was reasonably
assured. In the absence of regional strategies going forward,
there should be an obligation on local authorities to put in place,
by a defined time, appropriate structures to achieve a replacement
framework. The proposed "duty to co-operate" has to
date been expressed extremely vaguely and is likely to be inadequate.
An analogy is the statutory duty contained in Section 39 Planning
and Compulsory Purchase Act 2004. Section 39 contains a statutory
duty on a person or body who exercises certain plan making functions
to "exercise the function with the objective of contributing
to the achievement of sustainable development." That
statutory duty has been much too vague to have any meaningful
effect. If it is proposed to create a similarly vague statutory
duty upon local authorities generally to "co-operate"
in relation to matters previously covered by regional strategies
no solution will be provided. Instead, local authorities should
be required to put in place structures within defined parameters
and by a defined point in time in order to address the vacuum
which has been created. If Local Enterprise
Partnerships are to be used for that purpose, their role needs
to be clearly defined. This will be particularly important where,
for example, cross-boundary housing needs assessments are required.
7.3 National
Planning Policy will have a vital role to set the context for
the new structures under which local authority co-operation will
be achieved. The relationship between national and local policies
will need to be clear. National policy and advice should help
to clarify the way in which housing need is assessed, to ensure
consistency of approach between local authorities and that Core
Strategies comply with national policy.
(iii) The likely effectiveness of the Government's
plan to incentivise local communities to accept new housing development
8. The New Homes Bonus—is the principle
of incentives a good one?
8.1 One of the
main objectives of the planning system should be to ensure that
housing is delivered on the most appropriate sites to meet the
housing need which exists. A system based on incentives risks
skewing the decision making process. Decisions on development
projects may, under an incentives based system, be taken not on
the basis of proper and balanced planning decisions in the public
interest founded on planning policy, but instead on the amount
of incentives and hence financial gain which would be generated
if a development project is approved. Indeed, the question arises
as to whether the amount of incentives which would be achieved
can and should properly be a "material consideration"
in the decision making process on a planning application.
8.2 An incentives
based approach also again raises the question of regional differentiations.
It is doubtful whether a "one size fits all" approach
in relation to incentives is appropriate having regard to the
different pressures in different parts of the country because
of the regional differentiations referred to earlier. It is entirely
possible that an affluent local authority will not be sufficiently
incentivised by any amount of financial incentives notwithstanding
a clearly established need for more housing to be delivered within
that authority, particularly in circumstances where the local
electorate does not welcome more housing development. Conversely,
a poorer authority may decide to approve new housing in order
to procure incentives, notwithstanding that the housing development
which would trigger those incentives is of the wrong type or in
the wrong place. In short, an incentives based approach is open
to a range of potential abuses.
8.3 The prospect
of the refusal of applications in areas where incentives are less
important is a particular concern in circumstances where the Government
has signalled its intention to restrict the right of appeal to
the Secretary of State on planning applications. In those circumstances
the "downside" for a local authority in refusing a planning
application is significantly less than at present where there
is a reduced risk of a decision being challenged on appeal. At
the same time amending planning legislation to provide that Inspectors'
reports on local development documents are no longer to be binding
upon local authorities would exacerbate the problems.
9. How will the incentives scheme work in practice?
9.1 It is not
clear how the incentive system will work in practice. Without
more detail, it is impossible to predict whether the system will
be effective. That the Government has so far revealed little of
this detail adds to the current level of uncertainty. There are
a number of specific concerns, including the following.
10. Funding the incentives
10.1 It appears
to be the intention that the incentives will be provided from
central Government funds. It is unclear, however, whether this
is genuinely new and additional funding or whether it is a "re-hashing"
of central Government funding which already exists. We would be
surprised if, in the current economic climate, genuinely new funding
is proposed.
11. Allocation of the incentive funds
11.1 There are
important questions to be answered regarding the allocation and
use of the incentive funds. At present, Council tax revenues are
split between District and County Councils. Will the same apply
in relation to financial incentives? If a District Council is
obliged to hand over part of the incentives to a County Council,
the incentive may be less attractive. On the other hand, it is
arguably appropriate that County Councils should receive part
of the incentives funding. The answer to this issue may differ
from one area to another, again indicating the difficulty of a
"one size fits all" approach.
11.2 Equally
important is the question of who will decide upon the allocation
of the incentive funds received and the purposes for which they
may be allocated? There is a strong case to suggest that the funds
should be applied towards matters which bear a relationship to
the development which has generated the funding. It would seem
perverse for an authority to be able to use the funding for matters
completely unrelated to the development. Will the local community
and the elected members be made aware of the use to which the
funding is to be applied when the decision is taken to approve
or refuse the relevant development? Will the decision to approve
or refuse based on the incentives be led and driven by employed
officers of the local planning authority or by the elected members?
11.3 All of
these questions demonstrate the complexity of any system of incentives
and the detailed considerations which will need to be grappled
with if the proposal is to be pursued.
12. Alternative approaches
12.1 A number
of alternative or refined approaches are possible. These include
the following.
(a) Successful
housing delivery could be rewarded with priority bidding status
for infrastructure funding.
(b) Local authority
performance tables could be created. Those authorities who deliver
housing at an early stage to meet identified need calculated in
accordance with national policy could be rewarded by enhanced
incentives to recognise the benefits of early delivery.
(c) The benefits
of regional planning include providing a policy basis on which
large scale and strategic development can be delivered. These
benefits have been seen in London, through the successful implementation
of the London Plan. London, with its elected Mayor of London,
is obviously in a different category from the other regions. It
would be possible to consider rolling out the London model, with
the elected Mayor, to other appropriate areas in England such
that a new system of regional planning can be put in place under
the control of elected Mayors.
(iv) Other issues
13. As noted
above, whilst the emphasis of concerns expressed regarding the
abolition of regional strategies has focused upon housing development,
other types of development also risk being delayed and prejudiced
by the revocation of regional strategies. For example, important
cross boundary infrastructure which was subject to policy in regional
strategies is now likely to be delayed and frustrated as a result
of the revocation of regional guidance governing its delivery.
It will be essential that there is proper co-working between the
relevant infrastructure delivery partners if the impetus on infrastructure
delivery is not to be lost (see paragraphs 7.1 and 7.2 above).
September 2010
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