Local planning authorities: recommended proposals for incentives, powers and flexibilities

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This page lists the specific policy and fiscal interventions the LGA would consider would provide support for a post pandemic recovery and a long-term resilience approach for planning. This is not an exhaustive list but presents a number of key issues and complementary recommendations. 

Decision making
Issues Recommendations

Planning fees

Planning fees do not cover the true cost of processing applications.

Taxpayers currently subsidise the cost at a rate of nearly £180 million a year. This is most apparent with smaller applications.

The fees should also help to cover the cost of wider planning functions to ensure that these can continue to support the decision making process.

 

Councils need the ability to recover the costs of processing applications, and therefore should be able to charge an appropriate fee.

 Council planning departments could become self-financing through allowing councils to set planning fees locally. In advance of this, the additional 20 per cent national planning fees increase consulted on in 2017 should be introduced as soon as possible.

Permitted Development (PD) Rights

Permitted development rights have removed traditional controls that would allow for a local planning authority to secure planning requirements on affordable homes or wider place-making standards. Over 13,500 affordable homes have been potentially lost through office to residential conversions under permitted development in the past four years.
 

The outcome has been uncontrolled, poor-quality residential units lacking in basic infrastructure requirements, including energy efficiency measures, with RICS finding that extending PD rights to office-to-residential change of use has allowed extremely poor-quality housing to be developed in comparison with schemes that required planning permission. Across the five study authorities, the inability to apply Section 106 agreements to PDs led to a potential loss of income of £10.8 million and 1,667 affordable housing units.

 

 

 

Remove nationally set permitted development rights giving councils and local communities the ability to shape the area they live in and ensure homes are built to high standards with the necessary infrastructure in place. This will also ensure that councils do not lose funding for much needed affordable homes.   

Incentivise the use of Local Development Orders (LDOs). LDOs are flexible and locally determined tools that councils can use to help accelerate the delivery of appropriate development in the right places. LDOs can help enable growth by positively and proactively shaping sustainable development in their area. They can play an important role in incentivising development by simplifying the planning process and making investment more attractive.

Local Development Orders (LDOs)

Councils support using LDOs but currently find them costly, resource intensive and time consuming. The response time can therefore be too slow and cause a disincentive to undertake them.

As set out above LDOs should be incentivised to become a more attractive planning tool. They are flexible and locally determined tools that councils can use to help enable growth by positively and proactively shaping sustainable development in their area. Coupled with greater Compulsory Purchase Order (CPO) powers and funding from other areas they could provide councils with the opportunity and control to lead and shape development proposals within their area.

 

The use of LDOs should be incentivised to include different forms of development with a focus on residential development in particular. This could include introducing new locally-determined permitted development rights for all projects related to public housing and public building projects such as schools, health facilities, libraries, and leisure centres.

The Planning Advisory Service has published technical guidance and case study research for councils who want to use LDOs in their area.

Digital planning and publicity

Before COVID-19 councils were required to advertise planning applications in local newspapers which has been temporarily changed. Councils already utilise their websites, social media and email notification systems which are free and much more instant than a local weekly paper. One council quoted a cost of £50,000 per year for advertising in the local newspaper. 

Currently, whilst many authorities encourage the submission of planning applications by electronic means it is not a requirement.  The electronic process for applications is faster than dealing with hardcopy applications.  

Local authorities should be given greater autonomy and flexibility to determine the best approaches to use to notify the public about planning applications, thus allowing them to decide whether to use local newspapers.

All planning applications should be submitted electronically. A digital planning application service would help reduce the time spent on validation of applications.

Virtual Planning Committees (VPCs)

VPCs were one of the most significant changes for planning departments to adjust to during the pandemic. Where the appropriate technology has been available VPCs have been beneficial and successful. Around 70 per cent of authorities have undertaken one or more virtual planning committees, with more planned.

Make the regulation permanent that allows to undertake Planning Committee virtually when the regulations expire 7 May 2021. Having the option of fully virtual or a hybrid approach offers opportunities for those involved to travel less and may encourage greater public participation.

 

 

Delivery
Issues Recommendations

2.1 Land Value Capture

Whilst we welcome the measures introduced in the NPPF on the approach, methodology and greater transparency on development viability there remains a concern that they have not gone far enough. Councils continue to be subject to challenge in the negotiation of individual planning applications on matters of viability including, but not limited to, the number of affordable homes a scheme can deliver.

Councils often do not have sufficient skills and capacity to evaluate viability appraisals and so outsource them to independent consultants for advice. In contrast developers are well resourced. There is a need to raise the skills and knowledge in councils and provide them with greater resources to negotiate effectively.

The Government needs to go further in addressing the challenges to councils on viability grounds to make sure that where land values are significantly increased as a result of the grant of planning permission the price paid for the land takes in to consideration all of the planning policy requirements for that site to ensure that development is sustainable and delivers all of the requirements set out in a local plan including necessary infrastructure.

2.2 Delivery of infrastructure

 

Timing and certainty

The infrastructure required to bring all development forward in a local plan is unlikely to be able to be funded entirely through the planning system. This is evident where councils bring forward a Community Infrastructure Levy (CIL) in their area as this is justified on the basis that there is a funding gap for the infrastructure that is required against the funding that is available, or that can be raised through the planning system. CIL is a tool to help meet some of this funding gap but it has never been expected to fully fund everything that is required as this is unlikely to be a viable option.
 

At the same time, during the consideration of individual planning applications officers often have to balance competing policy requirements to determine what can viably be secured as part of the planning permission whilst still ensuring that development is sustainable. This can mean that not all policy requirements are always achieved which in turn can impact the delivery of infrastructure that is required to support development in an area.

Viability constraints considered at the planning application stage are widely cited as a reason for this and there is a further concern that this will be exacerbated by the impacts of COVID-19 on development finance. Whilst Government has made recent reforms to how viability is considered through the planning system it is not considered that these go far enough to address the conflated negotiations that officers are subject to on individual planning applications.

A consequence of this is that necessary infrastructure is not delivered at all, or it is pushed back to an unspecified point in the future causing risk and uncertainty of delivery.

Some councils have raised that the lack of certainty over the delivery of infrastructure makes it difficult to gain local community support for development and this is considered by councils to be a major impediment to obtaining their support for development.

The delivery of necessary infrastructure can be critical to enabling development to come forward. Effective planning and delivery of infrastructure will become ever more important as we reflect and plan for the impacts of the pandemic as we continue to shape the places within which we live and work and what demands this places on existing, or the need for new, infrastructure. More certainty that the necessary infrastructure can and will be delivered is required to support planned development and the grant of planning permission.

Government changes to policy and guidance on how viability is considered in the planning process have not gone far enough and there are limited examples to demonstrate how they have

benefited delivery. Councils require the support and confidence in the process to ensure that decision making provides for sustainable development and is not undermined by delivery at all other costs.

Improved tools are required to enable councils to have greater certainty so they can secure the delivery of necessary infrastructure at the right stage. This could include more detailed national policy, fiscal incentives and grants (e.g. HIF), improved collaboration and establishment of delivery partnerships and improved skills and capacity training.

These tools must provide for the delivery of infrastructure up front to be considered and secured through all stages of the delivery process, including plan making.

Funding

Developer contributions Community Infrastructure Levy (CIL) and Section 106 Planning Obligations (S106) are, in most cases, not sufficient to deliver the infrastructure that is required to support development. There is also a real potential that these funding streams and development finance will be reduced, or in some instances delayed as a consequence of COVID-19. This lack of resource and certainty impedes the delivery of necessary infrastructure. Furthermore, current competitive grant bidding processes, like the Housing Infrastructure Funding (HIF), can be limited in application and to developments of different scale.

Provide greater fiscal certainties for the delivery on necessary infrastructure upfront and bring public investment projects forward. This could include:

  • infrastructure grants for developments of different scales;
  • low Interest / interest free loans granted over an appropriate period to plan and secure delivery;
  • expedite allocations;
  • removal of national exemptions for CIL as these cumulatively reduce the amount of funding to invest in critical infrastructure to facilitate development and should be instead set locally;
  • cash flow of delivery of infrastructure against future income including New Homes Bonus (NHB), CIL and S106;
  • provide more certainty that S106 can be used to reimburse upfront expended costs on necessary infrastructure;
  • enable pump-priming of funding direct to developers to deliver infrastructure to support their development; and
  • support on how funding streams can be coordinated to provide maximum value and certainty of delivery;
  • relax conditions so that councils can focus on delivery rather than the process (e.g. HIF).

 

 

Delivery agents

There are clear challenges for the different parties involved in the planning and delivery of infrastructure. The report A smarter approach to integrated infrastructure planning[1] published by the Royal Town Planning Institute in May 2019 acknowledged that infrastructure planning and delivery is highly complex. Interests include national and local government agencies, regulators, utility companies and service providers, as well as developers and investors. These stakeholders often work to different timeframes, across different areas, and to different objectives.

 

 

A more joined-up approach to infrastructure planning is needed and should be supported through the planning process. Incentives, guidance and good practice are required to demonstrate the benefits of good leadership and greater collaboration between all relevant interests. Councils require more support to facilitate and effectively lead their central role in the co-ordination and delivery of infrastructure. This includes encouraging and supporting the corporate ownership of this role and maximising access to multiple funding streams to enable delivery through robust corporate governance.

National infrastructure projects

Uncertainty over the delivery of strategic and national infrastructure projects can lead to significant delays in planning for delivery of development and infrastructure at a local level.  

Greater clarity and certainty over the delivery within specified timescales of national infrastructure projects is required to enable the planning for sustainable development and infrastructure at a local level with delivery within reasonable timeframes.

2.3 Developer Contributions – The Community Infrastructure Levy (CIL) and Section 106 Planning Obligations (S106)

 

Regulations and administration

Some councils have been reluctant to bring forward CIL as they are concerned about set up costs and time taken for the accrual of enough CIL receipts to deliver infrastructure. This is more prevalent in areas with lower development viability. Some councils consider the receipts levied through CIL would not cover the cost of administration.

The CIL Regulations 2010 (as amended) have been amended many times making them complicated to administer, and for some councils, the system to be incomprehensible as a funding mechanism. Administering exemptions of payment can also be cumbersome and expensive to administer.  

Consolidated CIL Regulations should be an immediate priority as should simplifying the mechanisms for grant of relief or exemptions.

The process should be simplified and more support should be provided to councils to help them understand the relationship of CIL and S106 and how they might operate independently as well as together. Training and resources for officers, such as those delivered through the Planning Advisory Service, should continue with a focus on increasing officers confidence and delivery in the area of developer contributions and viability.

Some councils have identified the need for a simplified regime overall of securing developer contributions.

Borrowing against CIL income

The CIL Regulations allow charging authorities to borrow against future CIL receipts to deliver infrastructure up front. However, this  depends on a number of conditions including the requirement for the Secretary of State (SofS) to set a percentage to calculate the amount of CIL borrowing that is permissible. This percentage is set against previous year receipts and the percentage is currently zero as no direction has been made by the SofS.

The CIL Regulations were amended in 2019 to allow only the Mayor of London to use CIL to repay money borrowed for Crossrail. This power and flexibility should be extended to all CIL charging authorities.

As an immediate response the Secretary of State should set a percentage, as allowed for through the current CIL Regulations

to allow all charging authorities to borrow against future CIL receipts.

This should be set at a level that is meaningful and would facilitate the delivery of infrastructure. This should also be set against a percentage of future receipts as being limited to a percentage of the previous years’ receipts would limit borrowing options in the early years of CIL charging when receipts are generally much lower. Interest rates should be kept low and not reduce the ability of councils to access borrowing. For example opportunities for use of the lower Public Works Loan Board (PWLB) rates should be considered.

Flexibility

S106 is a less flexible tool than CIL and for those councils that do not have CIL there is a need for greater clarity on how S106 can be used to forward fund infrastructure. The Planning Practice Guidance sets out that this approach can be used for education contributions through the reimbursement of forward funded school places.

Notwithstanding, it is not clear whether this approach can be used to fund other types of infrastructure. This is because each planning obligation must meet the statutory three tests and therefore this decision must be made on a case by case basis. This creates uncertainty and individual decisions subject to greater challenge.

Explicitly allow through guidance and legislation the use of future S106 funding for the reimbursement of expenditure where infrastructure delivered upfront is required to support a specific future development. This should include facilitation of borrowing capital against future S106 receipts.

Training and resources for officers, such as those delivered through the Planning Advisory Service, should continue to be promoted with a focus on increasing officers confidence and delivery in the area of developer contributions and viability.

Viability

Both CIL and S106 are undermined as effective delivery tools because of their consideration against the viability of development.

Councils require guidance, resource and best practice to help identify effective governance processes and good infrastructure planning. Further support for councils is required to understand how these mechanisms can work effectively together and how they should be considered in the context of viability. This should include helping guide their role as part of a wider package of fiscal measures that ensure the delivery of infrastructure at the appropriate time.

2.4 Major development

 

Delivery

The timeframe for delivering major development sites is an area that receives widespread critique with pressure to speed up the process. Councils cite a number of reasons for long lead in times including, but not limited to, the need for greater expertise and resource in this area. In August 2018 the LGA published the report Speeding up delivery: Learning from councils enabling timely build-out of high-quality housing. This recognises that planning can only influence certain parts of the housing delivery chain which are impacted by a range of issues – including the availability of finance, a lack of visibility on land ownership and options on land, and a myriad of wider economic factors. The report highlights both the potential and the limitations of the measures councils can take to enable timely build-out of high-quality development.

 

Councils needs support through resource and training to facilitate capacity building to enable the delivery of major development. This also links to the need for incentives that enable the delivery of infrastructure upfront and more collaborative and partnership approaches to delivery. Greater support and backing to the development of planning briefs and site-specific strategies to encourage joint consideration of individual sites could provide more certainty. There should be incentivisation for increasing build out rates once planning permission has been granted.

Standards that promote the use of modern methods of construction (MMC) and enable clearer consideration at the planning application stage would help.

 

Monitoring
Issues Recommendations

3.1 Land supply monitoring and tests

 

Five-year housing land supply (5YHLS)

The impacts of COVID-19 on the supply and demand of new homes is not fully understood and councils are concerned with how this will impact their ability to demonstrate a 5YHLS looking forward. House builders, landowners and developers are unable to commit to when developments will be brought forward.

Councils face penalties where they are unable to demonstrate a 5YHLS though they are not in ultimate control over the demand and supply of new homes. Granting more planning permissions is unlikely to be the correct response where land supply is not the factor undermining delivery.

The current requirement in the NPPF for “clear evidence” and “realistic prospect” of delivery to demonstrate a 5YHLS is a real challenge in the current COVID-19 circumstances. This may lead to more speculative development and appeal-led decision making with limited resources diverted to responding to appeals rather than proactively and positively planning for development.

Amend the definition of “deliverable” and “clear evidence”. Sites previously considered deliverable pre COVID-19 should only be considered non-deliverable where there is clear and available evidence that housing completions will not begin on site within five years as identified by landowners, developers and agents.

 

A suspension and/or roll forward of the five-year land supply arrangements should be allowed to acknowledge the lost supply during lockdown and to avoid a surge of speculative planning applications. This period does offer an opportunity to relook at new Office for National Statistics (ONS) releases and the standard methodology and how this should be monitored.

Housing delivery Test (HDT)

The HDT results for 2020/21 will be impacted by the cessation of construction during the COVID-19 pandemic, slowing of the supply chain and currently unknown impacts on demand for new homes. Councils stand to be penalised with a consequence of speculative development as a result of extenuating circumstances.

We have argued that the HDT is inherently unfair, in that it penalises councils and the communities that they represent when factors outside their control have limited housing numbers (for example unbuilt planning permissions). Under the current circumstances the HDT and the requirement to demonstrate a 5 year land supply should be suspended.

At the very least,

- flexibility in HDT for the 2020/21 period should be introduced to ensure that councils are not unreasonably penalised and subject to unplanned speculative development as a consequence of COVID-19. There will not be the ability for delivery to catch up as sites will not be fully operational for some time due to social distancing measures. The impact of the current situation is likely to be shown in Q1 & Q2 of 2020/21 performance allowing time for authorities to fully understand the impact whilst being mindful of any new approach to monitoring.

- The Ministry of Housing, Communities and Local Government (MHCLG) should consider the use of interim ‘planning freedoms’ that require authorities to demonstrate a 3-year land supply to give relief from associated HDT ‘consequences’, where progress on bringing forward up to date plans can be demonstrated. This is as envisaged in NPPF para 217 where the Government will continue to explore with individual areas the potential for planning freedoms and flexibilities, for example where this would facilitate an increase in the amount of housing that can be delivered. This will help reduce the resource and cost implications of likely increase of planning by appeal.

3.2 Streamlining reporting requirements

 
Timeframes
 

Statutory reporting and monitoring requirements are scheduled at different times throughout a calendar/financial year. This creates duplication and inefficiencies. This includes, for example, annual monitoring reports, housing flow returns and infrastructure.

Align reporting requirements and deadlines to provide for greater efficiencies in resource, data capture and presentation.

3.3 Infrastructure Funding Statement (IFS)

 
Resource
 

The Infrastructure Funding Statement (IFS) requirement places additional demands on available resource as it requires, for the first time, statutory reporting on S106 as well as CIL. The first IFS must be published by the end of December 2020 and will, in particular, place significant burdens on existing resource. MHCLG have yet to bring forward the promised guidance and templates to help authorities develop their IFS.

Provision of more training, skills and resource to enable councils to meet this requirement proactively.

Relationship to delivery

Information provided by key infrastructure providers, such as transport, water and health is often limited with agencies finding it difficult to engage fully with the planning system because they work to different timescales.

Infrastructure providers should be encouraged and incentivised to engage at all stages in the planning system to ensure that the requirements arising from development are properly planned for and met. Consideration of standard methodologies to help calculate demand and requirements should be encouraged.

Infrastructure suppliers should be required to work proactively and consistently with councils and to plan for demand over the life of a local plan. 

This can be supported by mapping infrastructure needs alongside financial measures/receipts and spend to give a clear picture. 

3.4 Digital Planning

 

Standardisation and resource

There are currently multiple digital platforms and inconsistent methods of data collation across councils. This creates inefficiencies and duplication across systems and in officer time.

Require resource, training and development of digital platforms that would allow standardised and efficient capture of data across councils.

 

Plan Making
Issues Recommendations
Plan Making
 

Plan making requires many important steps to be undertaken from start to finish, with the examination element generally outside of the control of the authority. The evidence base requirements for plan making are too onerous, inflexible and not proportionate. Councils spend much time and resource on developing an evidence base and often can be a delaying factor in the progress of a local plan. For example, the introduction of the Local Housing Need did reduce the need for some housing evidence base, but authorities still need to undertake a Strategic Housing Market Assessment to assess need and possibly more if considering unmet need.

Local plans are too slow to be produced which includes the period of examination and without policy and legislative change will run completely counter to the requirement for review and possible update every five years.

Once a plan is found sound then no time is allowed for the plan once adopted to ‘deliver’. A plan can be deemed a failure moments after being adopted. The review mechanism of five years should be allowed to run its course unless substantive change means it should not.

Give plans more weight earlier in their development to support authorities to ensure a plan-led approach based on most recent evidence. To make the process more time and cost efficient, update individual policies without the opening up the whole plan. Legislative change would enable plans to be updated proportionately and could be combined with a temporary change to the tests of soundness that allows councils to develop up to date plans. On the tests of soundness, apply a proportionate approach to certainty, deliverability and viability for large scale development that will take decades to be built out.

The Duty to Cooperate may be misleading and interpreted in different ways by individual Planning Inspectors which can lead to Plans being withdrawn from examination. There should be a significant reduction in the ability of statutory consultees to slow down the process for both policy making and decision making. If concerns are raised then these should be raised sooner in the process and actions agreed in a timely manner.

Local Plan Examinations
 

Further consideration should be given to the local plan examination process as it can often prove to be time consuming and very costly to a council.

The average time taken for a local plan to be found sound from submission was 18 months according to the last Lichfield’s ‘Planned up and be counted’ report.

Not all authorities have an up to date local plan in place and there are still a handful that do not have a post 2004 Act Plan adopted.
 

Reduce the cost of examinations to councils by being more flexible and light touch. Through undertaking more virtual examinations with greater document sharing and where possible use written representations.

Reduce the number of hearings so that they become the exception and not the rule. Particularly if a council is proposing to meet their Local Housing Need, then a hearing should not be required as the detail of how that need will be met will come through the site allocation hearings. If numerous hearings are required, then a two-step approach may be beneficial where the first part considers the strategic policies and the second part the non-strategic policies.

The Planning Inspectorate (PINS) should have greater accountability for the length of time taken for examinations to reach conclusions more quickly and allow authorities to have local plans in place.

Strategic Planning
 

There is an absence of specific guidance for strategic planning and how a plan should be examined by PINS. The same criteria (in the NPPF) is used for assessing strategic plans.

A Strategic Plan will be considering growth with an overarching vision for a large geographical area (including more than one Authority) and will generally be considering a longer time scale than the minimum 15-year period – sometimes up to 2050.  It isn’t possible (or sensible) for a plan that is considering such a long-term vision to be able to consider all details of delivery within a long timeframe.

The advantage of a Strategic Plan is the consideration of the longer term and the joining together of several authorities to consider the growth within their area. It will help to address unmet need where it arises through Duty to Cooperate in a more efficient way.

Greater detail for the delivery of Strategic Plans in the plan making section in the NPPF and guidance is required to aid delivery. Examples of this are the West of England failed Joint Spatial Plan and the North Essex Garden Villages Local Plan.

Longer term visions for an area can only be realised when no longer encumbered by a test of current viability and market conditions. No plan can therefore be considered viable for more than a 10-year period. This approach does not deliver good plan making on the ground nor does it allow communities to see how their community could be developed for more than a 5-10-year period.

Neighbourhood Planning
 

Like local plans, neighbourhood plans must be supported by the relevant and necessary evidence to justify the strategy and policies set out within them. This places significant resource requirements on local communities who often find it necessary to employ the help of a planning consultant to deliver the plan. This can make bringing forward neighbourhood plans less attractive for communities that are unable to raise the resources that they perceive as necessary to bring forward a neighbourhood plan.

The government funding that is in place to help communities and councils bring forward neighbourhood plans is insufficient to provide dedicated resource for this area of planning.

Councils should be supported with greater resources to help their communities bring forward neighbourhood plans.
Climate change
 

Authorities find that the Government is unclear about the ambition for achieving net zero carbon by 2050 and importantly what the planning system’s role will be in helping to achieve this. 

Climate Change needs to be at the heart of all Government policy including through changes to the NPPF. In its June 2020 progress report to Parliament, the Committee for Climate Change recommended that Government planning documents, such as the NPPF should be reviewed to ensure consistency against the net zero objective.