Growth and Infrastructure Bill

Memorandum submitted by British Property Federation (GIB 28)

The Growth and Infrastructure Bill

Introduction

1. The British Property Federation (BPF) is the voice of property in the UK, representing companies owning, managing and investing in property. This includes a broad range of businesses – commercial property owners, the financial institutions and pension funds, corporate landlords, local private landlords – as well as all those professions that support the industry.

2. We welcome proposals in the Bill to bring greater speed and certainty to the planning process. These changes will, in turn, allow applications for sustainable development to be taken forward in a timely fashion without undue cost to local authority or applicant.

3. However, Clause 22 is of grave concern. This proposal has caused immediate and widespread concern from the real estate and retail sectors, most notably from those with interests in areas of the economy which have struggled since the last revaluation in 2008, particularly regional high streets. As indicated in our oral evidence to the Committee, we urge that this clause be dropped from the Bill.

4. We believe that there is scope to go further in relation to changes to the planning system. In particular, there are elements of the recommendations found in the Penfold Review still to be implemented. The Growth and Infrastructure Bill (as it is currently) touches on some of these areas, but more could be taken forward.

Clause 1

Option to make a planning application directly to the Secretary of State

5. This is one of the most contentious clauses, proposing that the Secretary of State can decide whether a local authority’s decision making function should be bypassed, and the decision taken at a higher level. In reality, we suspect it is most likely that there will be very few decisions removed from the hands of local authorities. Although this clause is hailed by many as the ‘death of localism’, we believe it is far more likely to be used as a threat to spur local authorities on to make decisions swiftly than as a tool to remove their decision making powers.

6. Some critics argue that this threat will result in slapdash decisions being taken, and that this proposal creates a message for local authorities and communities that growth is to be achieved irrespective of the harm caused. However, we note that the NPPF sets out clearly the need for sustainable development based on need, and trust that will inform the decisions of local authorities.

7. This proposal should, in theory, encourage local authorities to engage better at the pre application stages too. Pre application discussions can iron out many of the issues that may hold up decision making; this should be attractive to both applicant and local authority. Transparent, sensible fee-setting for pre application discussions would help this process become more effective.

8. We support the principle of the proposals; however, it will be crucial to ensure that the metrics used to calculate which local authorities are to be by-passed are clear and reasonable, and not susceptible to manipulation. Overly-onerous reporting mechanisms should be avoided so as to protect already over stretched planning departments.

Clause 5

Modification or discharge of affordable housing requirements

9. This proposal is causing some disquiet. It allows affordable housing provision to be reduced on application if the requirements make the proposed development unviable.

10. It has been suggested that this is unlikely to be utilised widely for a number of reasons. Applicants are often (quite rightly) reluctant to wreck their positive relationships with local authorities. Some may instead chose to engage with local authorities with regard to the Community Infrastructure Levy, as this poses a far greater risk to developments and in particular, large regeneration projects, or large complex sites.

11. There are already mechanisms by which conditions can be renegotiated. Currently, if all signatories agree and if the condition is entered into after 1991, the condition can be renegotiated. The crucial change is that at the moment, if the local authority does not agree to renegotiate or does not agree to proposed variations, the applicant has to wait five years from signing to apply formally to vary.

Clauses 9 and 10

Highways and public rights of way

12. We welcomed the consultation published earlier this year on reforming the application processes for stopping up and diversion orders for local highways. As we said at the time, applications made under S247, S248 and s257 of the Town and Country Planning Act 1990 can cause disproportionate delays to projects, and can involve considerable additional cost to the applicant. We are very pleased to see the proposals that applications would be able to run concurrently.

13. The practical effect of the proposed changes (in England, but outside of London) would be that an applicant who has applied for planning permission to the relevant local planning authority (LPA) would be able to apply to the Secretary of State for an order under section 247 Town and Country Planning Act 1990 even before the LPA has determined and granted planning permission. No order will be granted, however, until planning permission has been granted.

14. Although the extension of the power is a step in the right direction, it does not go far enough to address the main concerns of developers. There are a number of practical difficulties which the new process could throw up. More significantly, however, it does not fully address the main issues around delay (or potential delay), efficiency, cost and local decision-making. Having a process running in parallel with the planning application process runs the risks of:

· Duplication of costs, particularly for the applicant, but also for highway authorities and other consultees;

· Delay, not least because there will be no measures to link the timing of one process to the timing of the other;

· Inefficiency, because it would be far preferable that all issues are consulted upon, addressed and determined by one authority. All parties, including the applicant and those who are likely to have an interest in the process, would be better served by having a ‘one stop shop’.

15. In conclusion, we would prefer LPAs (as suggested in the consultation paper) to determine applications for stopping up/diversion orders at the same time as they deal with the relevant planning applications. We realise that the proposal in the Bill is "a 'quick win' first step" and that later stages will include full consideration of responses to the remaining options and proposals for other improvements to the process. It would surely be preferable, however, to present changes in one go so that the process can be made fit for purpose as quickly as possible. 

Clauses 11 to 14

Village Greens

16. Recently, a signification proportion of village green applications have involved claims for pockets of bad quality, functionless land often on the fringes of towns and villages. The motivation has often been to prevent new development, rather than to protect a community space. These proposals go some way towards lessening the issues, and should not be watered down.

17. Clauses 11 to 14 attempt to bring some control to the often vexatiously used village green designation process. At the moment, developers and local authorities are often faced with huge legal bills and immense delays in trying to fend off these claims. In addition, landowners fear the impact of these claims, and so take steps to seal off their land by forbidding the public entry to ensure that they will be able to recover control of the land should they want to at some time in the future.

Clause 21

Bringing business and commercial projects within the Planning Act 2008 regime

18. We welcome this proposal, although it is unclear whether it will indeed provide a faster system or whether delays will merely be shifted from local authorities to the IPC.

19. There is also concern that the drafting is not fit for purpose as it explicitly excludes projects which include "the construction of one or more dwellings". This would have the effect of excluding large mixed-use developments, which seems wholly illogical.

Clause 22

Postponement of compilation of rating lists to 2017

20. The surprise announcement that the 2015 revaluation will be delayed by two years prompted disappointment and chagrin across the retail and real estate worlds – an extraordinary outcome for a policy allegedly intended to give certainty to business. As we indicated in our oral evidence to the Committee, we urge Government to remove this clause from the Bill.

21. From a technical perspective, it is vital that any tax based on the rental value of property is subject to regular review in order to keep the tax in touch with local market conditions. Postponement will therefore impose unreasonably high rates bills on struggling businesses in sectors or regions that have underperformed in the UK since April 2008 (the last revaluation date).

22. Broadly, the losers will be those outside of London and particularly businesses in the North East and North West, who would have expected to see their rental values fall. Therefore this postponement will further exaggerate existing market imbalances and further harm England’s regional economies.

23. Elements of the retail sector will be particularly disadvantaged. The VOA has argued that overall, the retail sector would have expected a 1% rise in bills had the revaluation gone ahead. Notwithstanding the severe limitations of the data used by the VOA, this 1% rise will mask a sharp divergence in the fortunes of retail businesses since 2008. Supermarkets and retailers in London’s West End are likely to win from postponement, while high street shops in England’s regions are likely to lose, entirely counter to Government’s professed desire to support struggling high streets.

24. Localities that would have expected to see business rates fall on revaluation may face further negative consequences, as obliging occupiers to pay a tax that is out of line with rental values will also exacerbate the large challenges faced by investors who wish to invest in those areas.

November 2012

Prepared 22nd November 2012