Section 160 of the now enacted Housing and Planning Act 2016 fulfils the commitment made in the government’s Productivity Plan to legislate to allow an element of housing to be consented when development consent is granted for a nationally significant infrastructure project (NSIP) under the Planning Act 2008.

Section 160 provides for an amendment to the Planning Act 2008 so that "related housing development" can be consented as part of a development consent order (DCO) for a NSIP. In order to provide flexibility, the government proposed that further details on the circumstances where housing will be acceptable and the amount and type of housing that would be allowable should be set out in guidance rather than primary legislation.

A 'Briefing Note', containing draft guidance, was published by Department for Communities and Local Government in October 2015. We have received confirmation from the Department that the target date for brining section 160 into force is October 2016, and that it is anticipated that the final Guidance will be published to coincide with this.   

The amendment, when it comes into force, would permit the construction or extension of one of more dwellings in England to be consented as part of a DCO where:

  • the housing is in geographical proximity to a NSIP ("on the same site as, or is next to or close to, any part of the development")
  • the housing is required to meet a functional need ("development which (…) is otherwise associated with that development (or any part of it").

Can any NSIPs include an element of housing?

The Briefing Note published last year states that the government does not propose to limit the categories of infrastructure project that may include related housing; so any category of NSIPs, and any that are directed into the regime under S 35 Planning Act 2008, may include an element of related housing.

Will there be a limit on the amount of housing that can be included with a DCO?

The government's stated intention is to set a maximum amount of housing that can be consented through the DCO process because it does not wish to undermine the local planning process and the wider responsibilities for local authorities to plan for housing need in their area. It appears that the government's view is that prima facie up to 500 dwellings would not undermine the local plan process, but this remains to be confirmed with the publication of the final guidance, anticipated in the Autumn.

What does this mean for promoters of NSIPs?  

Any applicants for development consent who wished to include an element of housing now have the confirmation that they will be able to do so when the provisions are brought into force.  Any applicants wishing to include housing would need to factor this into their project and application programmes. While that may have a short term impact on the project programme there may be positive impacts on scheme viability that favour the inclusion of an element of housing with a DCO consent.

Subject to further guidance, where developers wish to include an element of housing, applicants are likely to be required to provide with their application:

  • an explanation for the inclusion of the housing element
  • "justification" for the location of any housing
  • the amount of housing
  • the basis for inclusion; either functional need (together with a justification) or geographic proximity (together with an assessment of impact in terms of local plan provision and local housing supply); and
  • evidence that the housing element has been properly consulted on, including the amount of housing and the type of housing.

Comments

Adding an element of housing to an NSIP is a positive step and, if the flexibility is retained in the final version of the guidance, this could be very attractive to infrastructure promoters and housing developers.

While housing is not one of the areas of economic infrastructure within the National Infrastructure Commission's (NIC) remit, the recently published Government Response to the consultation on the NIC (Government Response, 18 May 2016) states that the NIC will consider the potential interactions between its infrastructure recommendations and housing supply.

The Government Response states that information about the potential locations of strategically important housing allocations, such as new settlements and urban extensions when they come forward, will be an important component of the evidence base collected by the NIC, which it may use to assess infrastructure needs and make recommendations that co-ordinate the timing and delivery of new infrastructure with the delivery of new housing. 

We may see applications for development consent coming forward in the NSIP infrastructure categories, for example in energy and transport, including an element of related housing.

Using the NSIP process not only adds to the certainty of a successful consent but also provides compulsory acquisition powers that might unlock developments. While infrastructure applications have led the way under the DCO regime under the Planning Act 2008, housing developers will be less familiar with this consenting route as the DCO system is quite different to applications made under the Town and Country Planning Act. It is very robust and requires detailed property and planning expertise from day one. The process can also be costly so developers should ensure that they are advised by experts who are familiar with the system so that the risks involved in pursuing applications are properly evaluated.