A quick fix for planning?
A radical shake-up of the system could help to simplify and speed up the planning process
Planning minister Keith Hill's recent announcement* of a new regime for 'planning obligations' (Section 106 agreements under the Town & Country Planning Act) is intended to be slipped into the proposed planning reform legislation early in the new year; the consultation deadline is 8 January.
Developers are to be offered a choice of paying a fixed, predetermined 'charge' - a payment meant to cover all obligations relating to the development including community facilities, infrastructure improvements and affordable housing - or to negotiate with the planning authority as now. The developer will retain the choice of reverting to the fixed charge if it does not like the way negotiations are turning out.
Hill said: 'The planning system has the potential to deliver so much for the community, from affordable homes to health centres to parks and open spaces. The problem is the system is simply too slow and fails to deliver what's needed when it's needed. We need a radical solution to simplify and speed up the process.'
Under the proposal, local authorities must set out details of the charge (for example, cost per unit of housing or square metres of retail floorspace) in their local development plans.
This would ensure that all the parties involved would know the cost of the charge before an application is submitted.
Kelvin MacDonald, director of policy and research with the RTPI, said: 'The new spatial planning system must focus on delivery, and this change adds to its ability to do so. The RTPI is particularly concerned that the government's own policy objectives for affordable housing may suffer as the list of potential uses for the funding gained through the new system grows ever longer.'
British Property Federation planning director Christopher Morley commented: 'The concept seems to be a good one. If this upfront charge is a 'one-hit fee', it is likely to be the preferred option for developers whose overriding requirements in making development happen are for speed and certainty. If the local authority's upfront expectations are unreasonable, or unviable, the developer can opt for negotiation instead.'
However, Morley was concerned that the devil would be in the detail, and discussion with the government will be needed to ascertain how it intends to ensure that these charges are pitched at a reasonable level, reflecting the precise nature, location and viability of any proposed scheme. Furthermore:
lin that respect the formula adopted for arriving at the charges will also be key;
lthere must be flexibility to ensure that in instances where marginal developments need to be encouraged for purposes of regeneration, no charges are levied;
lthe upfront charge must be a once only payment;
lthere must be safeguards in the system to ensure that developers are not penalised by local authorities for not accepting the charge option and for choosing instead to negotiate; and lit will be vital that local authorities are able to start negotiating and agree figures with developers reasonably efficiently.
Provided that it is not unreasonable in the circumstances of the proposal, the fixed charge will be a brake on an authority's demands in a negotiated alternative, particularly since the government has cleverly allowed the developer to maintain both options through negotiations.
The most remarkable aspect of the new policy is its inevitable impact on affordable housing. When first introduced by PPG 3 in 1992 and elaborated in Circular 6/98, authorities were quick to agree payments into their designated housing funds in lieu of on-site provision of affordable homes. Planning officers were able to take into account empirical issues such as the desirability of bringing a long disused site into use, or the cost of converting a listed building.
Despite widespread predictions that the policy would 'kill the golden goose', policies soon evolved that demanded not only on-site provision but how it should be distributed within the development and the proportion of different tenures called for.
The consequence has been to increase the deterrent value and to create inordinate delays in the granting of permissions.
The government now seems to understand that the affordability of housing depends on ramping up supply and that the current process is having the opposite effect. Its announcement does not acknowledge the vacuum that will be created in the provision of sites for affordable housing and the fact that authorities, having established sometimes complex policies on mix of size, tenure and disposition of affordable homes, will now have to think afresh. One possible outcome is the designation of sites for such developments, which will be off-limits for private house building.
The new policy will make more transparent the intended reduction in land costs for all housing but fails to recognise the distinction between the charge (an upfront cost payable once development commences) and a tax on profits, which can only be assessed once a profit has been achieved. It will not happen anytime soon. First the details have to be written into the new Planning Act; second the LPA has to formulate its policy within the rules that may be laid down; third the Development Plan has to be agreed/adopted; and fourth the developer has to work out whether they can afford to pay the charge.
Brian Waters is principal of the Boisot Waters Cohen Partnership, contact brian@bwcp. co. uk * 'Contributing to sustainable communities - a new approach to planning obligations', see www. odpm. gov. uk