Just to recap…
25 May (bash the big builders)
‘Get on and Build' Deputy Prime Minister urges housebuilders
Planning Reform Working Paper: Speeding Up Build Out - GOV.UK
Technical consultation on
implementing measures to improve Build Out transparency - GOV.UK
28 May (support the small ones)
Government backs SME builders to get Britain building - GOV.UK
Planning Reform Working Paper: Reforming Site Thresholds - GOV.UK
Reform of planning committees: technical consultation - GOV.UK
Summaries
These summaries may also be of assistance.
SMEs & Site Thresholds
First things first, a focus on the health of the SME sector
has to be good thing because, as is noted in the consultation material, a third
of SME developers have ceased operating over the last two decades.
This report from WPI Strategy suggests that their number has
actually collapsed from over 12,000 in the 1980s to around 2,500 today, and that
around half these businesses will be at risk insolvency by 2029.
I was struck during the near three years that I spend in my last role and just how many leaders of SME enterprises said that they would not be trading very soon if there was a not a material improvement in their operating environment. Why, it was frequently asked, would you deploy precious capital in such a volatile environment in search of such relatively meagre rewards? It is a good question.
Indeed I had an email just this week from the MD of a company that’s website, for context, states that it has been building homes for forty years and which has only one site listed under ‘current developments’ and only two listed under ‘coming soon’.“We are at a critical point. Significant delays in the planning process are putting our business at real risk — we’ve already had to make redundancies due to these delays, and unfortunately, we now face the possibility of more.
As an SME housebuilder, we already struggle to compete with larger developers when acquiring land, particularly in a market where opportunities are increasingly scarce and margins continue to tighten. Without large landbanks to rely on, we’re currently desperate to start on three sites that are stuck for various reasons — and the challenges we’ve encountered are systemic. Some of the key issues we’ve faced recently include:
- Pre-application advice proving unreliable – for example, there was a complete U-turn on unit numbers at one site, which led to a full redesign. The initial feedback turned out to be essentially worthless, resulting in wasted time and resources;
- Excessively long determination periods – 13-week timescales are completely unrealistic. Another site has now been in planning for 44 weeks for just 23 units, despite being a straightforward scheme;
- Late-stage issues being raised – matters that should have been addressed early in the process are instead surfacing at the final stages, derailing progress;
- Lack of experience and confidence among planners – decisions are being passed around departments repeatedly due to indecision, causing further delays;
- Highways department challenges – interactions with the highways team have been particularly difficult, and there is a general sense that they are uninterested in adopting future developments, which creates unnecessary barriers; and
- Increased pressure and inefficiencies – the process is placing significant and avoidable strain on everyone involved, in what is already a demanding environment.
Sobering is it not?
As well as making the case for change these experiences provide a prism through which this suite of reform proposals can be
viewed and a gauge against which their likely effectiveness can be
measured. Bluntly, will any of this make a meaningful difference to the person
who sent me that email?
The central plank of the new site threshold proposition is “removing and streamlining disproportionate requirements on small and medium sites”, which sounds so seductively simple as to set some alarm bells ringing. On the face of it, yes, of course, any national template validation checklist for very small, small, medium and large sites would all be different (statutory information requirements are mentioned in the consultation material in the context of NDMPs), it is also the case that very small, small and medium sites could be affected by the same issues as large sites and that those issues need exploring to the same degree.
Whilst, yes, the planning system is of course a challenge for SMEs and, yes, of course, it should be simpler, the planning system is a challenge for actors of all sizes and so issue might not be that the requirements on small and medium sites are
disproportionate. Rather it is that small and medium size builders are
disproportionately affected by these issues because they have less time, money
and energy than the land and planning teams within the larger builders.
So little land comes forward for development that, as you just read, SME builders can be competing with the larger ones for that which does. If SME builders had access to more land, and more land upon
which the principle of development was readily established, the time, money and
energy needed to secure a planning consent would not be subject to as much risk.
Strikingly, the consultation notes that the proportion of
planning permissions granted on sites with 1 to 9 units has steadily declined
over the past 13 years, falling from 21% in 2010-11 to 9.3% in 2023-24.
On the land front it is stated that Homes England will
release more of its land exclusively to SMEs (I feel sure that we have heard
that before…) and that a new pilot, the ‘Small Sites Aggregator’, is to be trialled in Bristol, Sheffield and
Lewisham to “bring together small brownfield sites that would otherwise not
have been developed, and attract private investment to build new social rent
homes and address temporary accommodation challenges”.
Wherever the site size thresholds end up being drawn (at
present very small is under 0.1ha, small is less than 10 homes and medium is up
to 49 homes, the most meaningful change that this could manifest would be a
requirement for LPAs to allocate land within a local plan sufficient to deliver
an identified percentage from each category.
Very small sites
There is succour
for proponents of a more codified planning system with reference to a forthcoming
consultation, which, it is stated, will include aspects of the proposals
contained in the previous ‘Brownfield Passport’ working paper as well as an
updated national Model Design Code that “could provide greater certainty about
what development is acceptable at the planning application stages in different
types of location”.
The Croydon
Suburban Design Guide (which you can find a link to in this blog of mine) is an example of how a codified approach can boost
supply, but also how that boost then rubs up against ‘the character of the
area’. Is there an appetite to take on that fight at a national level by way of
a NDMP?
Small sites
- “Streamlining” BNG requirements, including the option of a full exemption (“aligning with the proportionate approach taken to wider requirements including affordable housing”);
- “Clearer expectations” on reducing validation requirements to be expressed through NDMPs;
- Proposals of this size to be delegated to officers for approval; and
- Making use of proportionate guidance on relevant areas rather than a requirement to engage with stat cons, “which forms part of our review of statutory consultees”.
Medium sites
For applications
within this new medium threshold the proposals include:
- A simplified BNG metric;
- Exempting medium sites (as well as small sites from the proposed Building Safety Levy);
- Exempting medium (and small sites) from build out transparency proposals (see below);
- “Specifically tracking performance of these types of developments directly so SMEs can expect a better service”;
- Including the delegation of “some” of these developments to officers as part of the National Scheme of Delegation;
- Ensuring referrals to statutory consultees are “proportionate”; and
- Uplifting the Permission in Principle threshold.
Large sites
The only proposal
specifically relating to this category of site is the appliance by way of a
NDMP of a threshold for mixed tenure requirements on, as yet undefined, larger sites and
whether and how there should be some discretion for LPAs to
disregard it.
The fact alone that
there is reference to local discretion betrays a recognition of how difficult
it will be to predict what the future market for different types of tenure will
be in different parts of the country and adopt now a national policy for it.
Since that is so difficult (and since large sites will likely come forward with
a mix of tenures anyway), it might reasonably be contended, perhaps precious civil
servant bandwidth should be expended elsewhere. Reducing reliance on large
sites (the blog of mine that I linked to above also shows the greater predominance of larger allocations in recent years) by introducing the afore-mentioned requirement for LPAs to allocate
land within a local plan sufficient to deliver an identified percentage from
each site size category would naturally introduce more types and tenures of
housing into any given local market.
Streamlining section 106 negotiations
The areas of focus are as follows:
- Specific barriers facing SMEs in agreeing S106 obligations – including availability of willing and suitable RPs;
- The role national government should play in improving the process – including the merits of a standardised S106 template for medium sites; and
- How “the rules” relating to suitable off-site provision and/or appropriate financial payment on sites below the medium site threshold might be reformed to more effectively support affordable housing delivery where there is sufficient evidence that onsite delivery will not take place.
Planning Committees
Having taken
account of the responses to a previous working paper, a national scheme of
delegation based upon compliance with the development plan has thankfully been
eschewed and instead a scheme that neatly categorises planning applications
into two tiers is being proposed:
- Tier A would include types of applications that must be delegated to officers in all cases; and
- Tier B would include types of applications which must be delegated to officers unless the Chief Planner and Chair of Committee agree it should go to Committee based on a gateway test.
Absent from Tier A presently
though are applications on allocated sites or sites consistent with another
DPD. Development industry support for a
national scheme of delegation emerged from the frustration at having the principle
of development debated over and over again, and worse still, such applications
being refused and having to be contested at appeal. Reserved matters submissions are to be included in Tier A, which is recognition that the principle has been established and that the details can be left to professional officers. The same surely applies to outline applications on allocated sites. To not include such
applications within Tier A, having gone through the pain of getting this far
with the idea, is to not realise all of gains to be had from doing so.
The consultation asks whether, regardless of the principle
of development having been established, medium sites should be included in Tier
A, but to my mind site size or
dwelling numbers alone are not reliable indicators of whether a planning
application should be delegated to officers. A scheme of 50 dwellings may be
straightforward in one area but complex and locally sensitive in another.
The core
purpose of a national delegation scheme is to embed consistent practice across LPAs,
particularly the understanding that planning committees should not revisit the
principle of development where that principle has already been established.
However the scheme of delegation is ultimately defined it
will inevitably be the case that it will be higher or lower in terms of
delegated powers than an individual authority’s existing scheme. It should be
made clear that where it may be lower in terms of delegated powers, the
national model represents a minimum over which authority’s can delegated more.
Relatedly, it is noted that the RTPI is using the elevated
role of the Chief Planning Officer in the operation of a national scheme of
delegation to advance the cause of that role being a statutory one, which everybody
in the profession should be getting behind.
Elsewhere in
relation to planning committees, the Government does not intend to mandate for
strategic development committees and will instead use guidance to encourage LPAs
to adopt such an approach “where it would be beneficial”.
The Government will
however use the Planning & Infrastructure Bill (P&IB) to set out requirements on the
size and composition of committees. “Engagement and best practice indicate a
committee of 8-11 members is optimal for informed debate on applications.
We recognise that there is a need for
some local flexibility to take account of political balance requirements and
meeting abstentions. We are therefore, proposing to set a maximum of 11 members
in the regulations”.
In relation to
training, it is stated that “a recent survey by the Planning Advisory
Service shows that 45% of respondents indicate they do not have a good
understanding of planning and planning processes following a form of training,
which indicates that there is scope for a more consistent and qualitative
approach to training”.
The government’s
stated preference is for a national certification scheme “as it ensures
independence and reduces the burden on individual local planning authorities,
however it is likely to mean that the certification is based on national
content only. We are aware of different views on this matter and would like to
hear views before developing the training package with the sector”.
BNG
The ease at which BNG can be planned for does not seem commensurate
with how long it has been talked about. Despite being in place for around 18 or
so months now the system still feels like it is in its infancy, beset by a lack
of resources (ecologists and lawyers within LPAs as well as planners), legislation
and guidance being interpreted in different ways and a still immature offsite
credit market. I have even heard it suggested that navigating the BNG regime is
actually starting take longer.
On-site BNG is, by all accounts, less difficult to accommodate,
which again places a disproportionate burden on the SME sector because
typically on-site provision is harder on smaller sites; they have less
financial flexibility to deliver off-site solutions, especially in expensive
credit markets.
DEFRA’s proposals include:
- Reform of existing exemptions and introduction of new exemptions;
- Streamlining the small sites metric and considering whether this could apply to medium development;
- Relaxation of the biodiversity gain hierarchy and disapplication or amendment to the spatial risk multiplier for minor development; and
- Delivery of compensation for development on brownfield sites with open mosaic habitat, applicable to all development categories.
For completeness, the proposed changes to exemptions are
either:
- Targeted revisions to the existing exemptions for self and custom build development (option 1) and development below the ‘de minimis’ threshold (option 2). This includes an exemption for all single dwellings to replace the self and custom build development exemption and tests options for a higher de minimis threshold so more minor development would be exempt in practice; or
- A full exemption for all minor developments (option 3), which would remove the existing exemption for self and custom build development. The ‘de minimis’ exemption (potentially with a higher threshold) would remain to capture other developments which have no or little impact on habitats.
All of this sounds sensible and many will likely support the removal of the BNG requirement
for minor development. On-site provision is often prohibitive and often
off-site credits are required in denominations of less than 1 unit, which many
providers are unwilling or unable to sell.
Build Out
“Politics is politics” as Michael Gove said to me and the politics of planning manifests itself most often in relation to build out. Those who took legitimate umbrage at the suggestion that a LPA might be allowed to ‘decline to determine’ a planning application if they were being ‘unreasonably slow’ would do well to remember that for every moderate, reasoned, pragmatic Centrist Dad working to inform civil servants and politicians about the realities of development (recently by sharing this blog as widely as possible), there are at least as many if not more voices in the ears of civil servants and politicians telling them that the dastardly housebuilding industry is not building out the consents that they already have.
Those who did take legitimate umbrage would do well though
to just step back a note that the rhetoric of MHCLG’s press releases (“leaving
sites unfinished” and “gathering dust”) and
the more reasoned positions of the working papers betray different authors with
different motivations.
That being said, promoting multiple tenures and outlets is
one thing, punishing people for just going about their business is another.
In relation to the latter, the technical consultation sets
out proposals to require developers of 50 or more homes utilising powers
introduced in the Levelling-up and Regeneration Act 2023 to
provide:
- A build out statement with their planning application;
- A commencement notice when they commence their development; and
- An annual progress report tracking build out progress.
Firstly, and practically, these will either be so detailed
as to be unfeasibly onerous or so heavily-caveated as to be completely pointless.
Further, even if it was determined that a developer was ‘unreasonably slow’ over
there, how would a local authority ‘decline to determine’ work if said developer
applied for planning permission in somebody else’s name or by way of a
different corporate vehicle over here?
Secondly, and philosophically, if it accepted that the
developer of a 40 home sites just wants to get on build, and so is exempt from
such requirements, why is not accepted that the developer of a 400 home site
just wants to get on and build? Big builders operate in exactly the same way as
medium builders and small builders. A small builder might have one local office
and a big builder might have 25 local offices, but those offices are, by and
large, operated and managed in exactly the same way.
Politics-aside, this exercise may ultimately do more good
than harm if a build out statement includes the date at which a resolution to
grant permission was received by a committee (if an application had to go to
committee...), when the S106 Agreement was signed; when the decision notice was
issued; when all pre-commencement conditions were discharged; and any S278 Agreements
or similar with the highways authority were completed, because to do so would
shed some light on the actual delays in getting sites built out.
In relation to tenure, it is stated that “we are considering
a range of options to set the threshold at a level which balances increasing
build out rates, supports broader market diversification and increases supply
overall. The Independent Review of Build Out in 2018 recommended setting the
threshold at 1,500 units, but some NPPF consultation responses suggested a
lower threshold. As a result, we are considering several options for where to
set the threshold, including at 500 units.”
My sense for what it is worth, and it is emblematic of the paucity
of real time and useable data within the system, is that sites of over 1500 or
so homes will include a variety of tenures and sites of over 500 or so will
include at least two sales outlets because the promoters of those sites will
want to secure as much of the cost of the land as possible as early as possible
and that is achieved by bringing forward complimentary phases of development in
parallel to each other.
To reemphasise the point made above though, it will be nigh on impossible be to predict what the future market for different types of tenure will be in different parts of the country and to adopt now a national policy for it. A plurality of actors delivering a plurality of types and tenures into the market, be that RPs providing for the affordable market, housebuilders providing for the homeownership and build-to-rent markets, or giving a boost to the developers in the elderly accommodation sector, will only be achieved by providing a plurality of sites to the land market.
Summary
.png)
What a nostalgic and heartfelt piece! At Build Abode, we truly appreciate how places and architecture shape our fondest memories. Dormont sounds like a beautifully rooted community.
ReplyDeleteLoft Conversion Company in London