Opinion: Planning Reform - `The Continuous Revolution` Meets the Legal Minefield

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The pace of planning reform is now so fast that it is hard to grasp the scale of the changes that the Government is pushing for. While many aspects of the Localism Bill remain controversial - such as the effective ending of strategic planning and the complex and unelected Neighbourhood Forums - there are now new changes to digest, emerging from the Budget and in new Government amendments to the Bill.

The Treasury's Plan for Growth' announced a wide range of measures on planning to make it 'fit for purpose' for business and paved the way for further outright deregulation. The Department for Communities and Local Government has issued a Consultation Paper on the Use Class Order, proposing the removal of the need to seek planning permission when converting commercial property to residential use.2 The social, environmental and legal implications of this measure have potentially profound and negative social impacts, leaving no opportunity to ensure that new homes would have enough green or play space and offering no way of imposing conditions on traffic impacts or securing sustainable low-carbon infrastructure. There will also no doubt be a flood of cases re-examining what constitutes 'operational development' as landowners seek to maximise their assets by changing office space into residential use.

In addition, a new clause (New Clause 124) was added to the Localism Bill and announced without consultation on 11 May3 This measure would fundamentally change the way in which local councils make decisions. The amendment would make direct financial benefits from central government grants the first among equals in material considerations when decisions are made. The measure is designed to ensure that payments from the New Homes Bonus have a significant impact on planning decisions, but the clause is so broadly drawn that it runs the risk of making any other cash payment to a local authority material to a decision. The proposed amendment to section 70 of the 1990 Act would give such payments a privileged status, since no other issue - such as housing or climate change - is specifically identified in primary legislation as material. The potential for legal challenge around the precise weight to be given to this new formulation and its relative weight to the development plan and 'other material considerations' will keep the courts very busy particularly when there is no up-to-date development plan.

In March, the TCPA, supported by the Joseph Rowntree Foundation, published a study4 which reveals the possible problems with the New Homes Bonus, not just in terms of its potentially regressive nature in the re-allocation monies away from low-demand areas, but in terms of its impact on sustainable development by encouraging growth on the most developable and profitable land rather than the most sustainable sites. However, it was clear from the work undertaken on the study that cash-strapped local councils need no additional hint to take the Bonus seriously.

The Plan for Growth also announced the Governments intention to introduce land auctions into the English planning system. This has been championed by the LSE academic Tim Luenig, as part of wider programme of free market measures arising out of a standpoint that sees planning as a barrier to optimal economically-efficient outcomes. The land auction idea, which is difficult to summarise briefly, involves three principal stages:

  • Landowners are asked by the local authority to sell options on a wide range of landholdings in the locality.
  • The local authority writes a plan, which allocates which land should be allocated for development, based partly on price maximisation.
  • Having allocated land for development, the local planning authority takes up the option to buy the land and grants planning permission. It then auctions off that permission to a developer and retains any difference in the price.

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