Introducing the consultation paper on 6 August 2020 with his characteristic colour, the Prime Minister promises:
"Not more fiddling around the edges, not simply painting over damp patches, but levelling the foundations and building, from the ground up, a whole new planning system."
The proposals are based on five broad principles:
- Shifting the balance of the planning process, with a greater emphasis on Local Plans and a reduced role for decision-making at the planning application stage.
- Moving from the current, paper-based system to a "digital-first" approach.
- Enhancing the focus on design and sustainability.
- Replacing the current system of planning obligations and the Community Infrastructure Levy with a nationwide, value-based flat rate charge, to be known as the Infrastructure Levy.
- Making more land available for development nationally, and speeding up construction where development has been permitted.
Under the proposals, digital map-based Local Plans will identify three different categories of land: growth, renewal and protected areas. Within growth areas, outline approval would be given automatically for developments meeting certain specified criteria. Local authorities would be subject to a statutory timetable for critical stages of the process, not to exceed 30 months, with sanctions for not meeting those deadlines.
The government's is proposing to move away from the current land value capture (land tax) structure of 'Section 106 Agreements' and the Community Infrastructure Levy, which are seen as complex and opaque, causing delay and discouraging small builders. These would be replaced by a centrally-determined Infrastructure Levy, based on a proportion of the development value of the land. The intention is to that the levy, which amounts to a development tax, is used to deliver more, badly-needed affordable housing. The risk is that local authorities facing other budgetary pressures may use this revenue for other purposes, while the government has not set out how new local schools, hospitals and parks will be delivered, if not through Section 106 agreements. A fine balance will also need to be struck to ensure that the Infrastructure Levy generates enough income for the purposes for which it is intended, but is not set so high as to affect the viability of projects. At the moment, it is not clear how these issues would be worked through without the ability for a Section 106-type agreement for individual projects.
Osborne Clarke comment
On the whole, the proposals have been welcomed by the property and construction industries. If the government is able to introduce greater certainty at the outset and streamline processes, this would help to deliver on the decades-old promise of governments to 'get Britain building', and provide much-needed economic growth. As with any ambitious plan, though, the risk is that the plans will take time to roll out. The good intentions may also come undone in the details, with the broad policies not addressing issues such as local highway infrastructure, flooding and site-specific environmental mitigation. These can be significant barriers to delivery, particularly on larger developments. While the government is intending to get rid of Section 106, there are other legal provisions (such as section 111 Local Government Act) that might just mean that 'planning obligations' re-appear, perhaps as Section 111 Agreements.
The other potential unintended consequence is that it is one thing to allocate land for development, but if landowners are getting less value from their land, they may be reluctant to sell. The consultation paper does not address whether local authorities should have wider powers to compulsorily purchase the best land if it is not otherwise coming onto the market.
While there is much to be said for the government's grand vision, this is just the first stage of a reform that has a long way to run. Those with an interest in the outcome may wish to contribute to that process through the present consultation.