The Housing and Planning Bill published on 13 October 2015 provides the Secretary of State with the power to grant development consent for housing which is linked to an application for a nationally significant infrastructure project. On 30 October the Department published draft guidance that the Secretary of State must consider in granting consent which includes housing. 

Once the legislation is in place, schemes of up to 500 dwellings linked to major infrastructure projects will be able to be consented without the need for planning permission issued by a local planning authority. The development consent also provides for developers to use compulsory acquisition powers to help with land assembly. It might therefore prove to be a useful power for both house builders and infrastructure promoters where infrastructure is able to be combined with housing.

The current position

A Development Consent Order (DCO) must be obtained under the Planning Act 2008 for development which is, or forms part of, a nationally significant infrastructure project (NSIP), or for any project that the Secretary of State directs into the regime. 

Development consent may also be granted for associated development (section 115(2) Planning Act 2008). This is development which is intrinsically linked to the infrastructure project or needed to support it. The 2008 Act does not currently permit any housing to be consented. Housing does not fall into any category of infrastructure for which development consent is required and associated development is defined to exclude the construction or extension of one or more dwellings. 

Consequently the only accommodation that development consent can be obtained for currently is temporary accommodation. Developers which wish to include even the smallest element of permanent housing are forced to seek planning permission from the local planning authority (LPA).

Housing and Planning Bill

Clause 107 provides for an amendment to the Planning Act 2008 so that "related housing development" can be granted development consent. A new section 115(4B) defines "related development".  As currently drafted the amendment would permit the construction or extension of one or more dwellings in England to be consented as part of a development consent order where: 

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

Projects that only consist of housing will not be able to seek development consent.

The draft Guidance

The draft Guidance is based on the assumption that clause 107 as introduced will achieve royal assent. Section 115(7) would give the final guidance the status of statutory guidance so that the Secretary of State must take it into account when deciding an application for an order that includes related housing development.

Infrastructure categories

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, may include an element of related housing. The draft Guidance states that the ability to include temporary accommodation (as associated development) is unchanged.

Restrictions on the amount of related housing

The government will 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." From this it appears that the government view is that a number of dwellings up to 500 would not undermine the local plan process. 

The draft Guidance also states that in locations where specific policies in the National Planning Policy Framework (NPPF) indicate that development should be restricted, a lower number of dwellings, or no housing at all, is likely to be appropriate. Examples of such locations included in the draft Guidance are: European sites, SSSIs, Green Belt, Local Green Space, AONBs, Heritage Coast, within National Parks (or Broads Authority), designated heritage assets, and locations at risk of flooding or coastal erosion. 

Geographically proximate related housing

The maximum amount of permanent geographically proximate related housing that could achieve consent would be 500 permanent dwellings. It would be very unlikely that for a single NSIP the Secretary of State would grant consent for more than 500 dwellings. 

Where housing is being provided on the basis of geographical proximity it will need to be located:

  • on the same site as the infrastructure; or
  • next to the infrastructure; or
  • close to any part of the infrastructure (“close to” is defined as up to 1 mile away from any part of the infrastructure for which consent is being sought").

We believe that the 1 mile distance starts from the red line of the infrastructure itself rather than any associated development as part of the project. Also, whilst not entirely clear it is thought that the whole residential scheme does not need to sit entirely within the 1 mile gap provided part of the scheme does so. 

Affordable Housing and Starter Homes

Where inclusion of housing is based on geographical proximity (not functional need) the Secretary of State expects any housing consented to include a percentage of affordable housing in accordance with any local plan policies. The draft Guidance goes on to state that any consented housing should also include an element of Starter Homes. Both should be secured through a section 106 agreement between the developer and LPA.

We believe that the 1 mile distance starts from the red line of the infrastructure itself rather than any associated development as part of the project. Also, whilst not entirely clear it is thought that the whole residential scheme does not need to sit entirely within the 1 mile gap provided part of the scheme does so. 

Related housing on the basis of functional need

The maximum number of permanent dwellings would be 500. The draft Guidance suggests that there may be circumstances in which more than 500 dwellings may be considered for the construction phase with subsequent conversion to permanent dwellings, provided the final number of dwellings would be 500 or less. In such cases the requirement for conversion should be written into the DCO. 

The draft Guidance states that the expectation will be that the housing will normally need to be located close to the infrastructure project, but that in the case of e.g. a large amount of housing for construction workers, which may become permanent at the end of the project, it may be more appropriate for this to be in a location that is not in the immediate vicinity of the project. In such a case it may be "more sustainable in overall terms for the housing to be provided in a local town", provided it is "within reasonable commuting distance". The location would have to be justified as part of the application.

The application

The information on the housing element in an application should provide the same level of detail as if an application for full planning permission were being sought, (i.e. not an outline application). 

In addition to meeting the requirements set out in existing regulations the draft Guidance states that developers will be expected to include in their application for development consent where this includes an element of housing:

  • a "justification" for the location of any housing (paragraph 25);
  • a "simple one page summary of the housing element of their application" (paragraph 35); 
  • the amount of housing; 
  • the basis for inclusion (functional need or geographic proximity), and 
  • if provided on basis of functional need a justification for that need;
  • if provided on the basis of geographic proximity an assessment of the impact of the housing proposed 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. 

Section 35 Direction

Where a request is made under section 35 of the Planning Act 2008 for a direction from the Secretary of State that a project should be placed within the NSIP regime, such as for large scale business or commercial projects, then the Secretary of State will consider whether the infrastructure is of national significance. The draft Guidance states that housing will not form part of the assessment of national significance and, therefore, will not influence whether a direction is given by the Secretary of State or not.

Examination

The draft Guidance anticipates that the housing element of any application is likely to need examination as a discrete entity in order to assess the acceptability of the housing proposed in planning terms. 

In the absence of a national policy statement (NPS) on housing, the draft Guidance states that the examining authority will need to assess the housing against policies set out in the NPPF and matters set out in supporting planning guidance. It also states that the NPPF is also likely to be an important and relevant consideration for the Secretary of State. Policies in any development plan "may also be relevant" in terms of the examining authority's assessment.

There will be no change in the way that the Examining authority reports to the Secretary of State. However, it will be open to it to recommend that related housing development should not be granted consent, in the same way that it is currently open to it to recommend that a part of the proposed development or associated development should not be granted consent. Equally, when the Secretary of State makes a decision as to whether or not to grant development consent he may grant consent for the infrastructure but refuse consent for some or all of the housing if it is considered that "the adverse impact of the housing outweighs the benefits of the development as a whole".   

The draft Guidance anticipates that where changes are made to a development consent order after it has been granted, if those changes include a significant amount of housing, where there was none or very little before, then it is likely that a fresh application for development consent will be needed.

Our thoughts

Kevin Gibbs, Partner in the Planning and Infrastructure team comments:

"Adding an element of housing to an NSIP is a positive step and, given the flexibility in this draft Guidance, could be very attractive to both housing developers and infrastructure promoters. For instance road and rail transport NSIPs which might not have met business case requirements for DfT funding, may now do so if a scheme for 500 dwellings was jointly promoted with a housing developer. Large scale business and commercial NSIP projects might also become more viable.

Using the NSIP process not only adds to the certainty of a successful consent but also provides compulsory acquisition powers that might unlock developments. Therefore, once implemented, we may see these powers being used to provide housing in areas around commuter transport hubs, which the Government's Productivity Plan published back in the summer, stated offered significant potential to deliver new (and potentially higher-density) housing development.

The status of the draft Guidance is also significant in that the Secretary of State must take it into account in granting consent. The way the draft Guidance is worded provides for the housing element of the project to be assessed against policies in the NPPF. Whilst policies in the development plan may be relevant, NPPF policies will be critical. Also, the government's view in paragraph 15 is that development of up to 500 dwellings is unlikely to undermine the local plan process. At first sight therefore there appears to be a slightly different weight accorded to the development plan for NSIP applications which include an element of housing.

"However, any charges that the process will circumvent local determination may be met by noting that promoters will need to consult fully both on the amount and type of housing. It will also be open to local planning authorities as statutory consultees to provide a local impact report and to include any specific impacts arising from the housing."

"Finally, 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."

What happens next?

It is proposed that a final version of the guidance (amended as necessary) will be published once the Housing and Planning Bill has been enacted. 
The general principles of the Bill were debated on Monday 2 November at Second Reading, but the inclusion of housing in the NSIP process received very little attention. Draft clause 107 received two endorsements and only one substantive comment raising with the Minister the issue of appropriate compensation where land is compulsorily acquired at current use value to be used by the acquiring authority to build houses. 

The Committee stage, which is yet to be scheduled will see detailed scrutiny of the Bill's clauses.