Planning regime influx in the UK
9 July 2010
The new coalition government has been crystal clear in its ambition to deliver a radical shake-up of the planning regime. From here on in, residential and commercial developers are likely to experience a planning regime in flux. Mostly, the issue will be one of knowing how to best manage, or avoid, the increased uncertainty of planning policy and risk to development.
The timetable for the introduction of legislation to support the government's proposed National Planning Framework is uncertain, but already the mood is shifting. The abandonment of the previous government's regional spatial strategies fulfils a policy objective to deliver greater "localism", ie, giving local planning authorities increased discretion over planning applications.
What's material?
The statutory development plan is the starting point for a local planning authority when considering a planning application, unless material considerations indicate otherwise. Regional house building targets or regional spatial strategies provided a useful, and legally valid, material consideration that a local planning authority could include in its assessment of a planning application. However, the secretary of state has made it clear that his letter should be seen as a material consideration. The uncertainty that this has created will not help local planning authorities in granting planning permissions that are robust to challenge.
As is often the case, material considerations can be finely balanced. Frequently authorisation for a development is only acceptable in planning terms, if a section 106 and/or section 278 Planning Agreement secure the delivery of sufficient public facilities to outweigh the impact of the development. Numerous planning applications for the development of housing will currently be subject to a resolution to grant planning made prior to the scrapping of the regional house building targets. These will subsequently be granted once a section 106 agreement has been concluded, and without a fresh consideration of the application by the planning committee, in the light of the scrapping of the regional house building targets. Planning permissions that are processed in this way are likely to carry increased risk of judicial review challenge.
Reducing risk
Developers facing this sort of situation will, rightly, place their trust in their professional advisers. But they can also reduce their risk by considering the benefits of legal indemnity insurance. Critically, bespoke indemnity insurance solutions to cover the risk of judicial or statutory review will help protect developers against any loss in land value if planning permissions are refused or revoked as the result of an inquiry.
There is huge benefit of these solutions for homeowners too. The mainstream media have revealed several cases recently involving homeowners who have been faced with financial loss that might have been avoided had they taken steps to mitigate the risks of adverse planning decisions. Sir Cliff Richard famously endured the pain of a seven-month battle to fight an enforcement notice to demolish a conservatory that had been constructed in good faith. Once the sale of the house was initiated several years later, it became apparent that the conservatory had been constructed in breach of permitted development rights. Sir Cliff's application for retrospective consent was unsuccessful and prompted the issue of an enforcement notice requiring demolition. An appeal was made to the Planning Inspectorate. The local council successfully argued on appeal that the conservatory ought to be demolished as required by its enforcement notice, on the grounds that the size of the extension contravened the council's green belt policy. In this case, size mattered.
Relying on permitted development rights (as in the case of Sir Cliff) can be fraught with difficulty and homeowners can frequently fall foul of the system. Not only can permitted development rights be opaque, but accurate measurement data isn't necessarily easy to find. Tackling planning due diligence and ensuring that your clients can develop, or use, their property without challenge often requires complex analysis of fact and law. The current state of flux in the planning system is set to muddy the waters further.
Paul Denholm, Senior Underwriter & Solicitor at First Title Insurance plc