So, at last we have the Localism Bill. We have all trawled through it, with an eye on those aspects which will affect the planning system - there are a few important issues tucked away under other headings - and have picked out those issues which we think are the most relevant. We set out our evidence - based thoughts below. This month's FuturePerfect? is entirely Bill-related and is slightly longer than usual. We will revert to other topics next month.

The emphasis is of course on giving power to communities and local government and the idea behind the Bill really is a fundamental change to the current planning system, but is this a set of changes that will really deliver? Indeed, was the system really broken enough to need fixing? With the economy still in a precarious position, are these changes going to create effective incentives to develop or just cause delays and confusion? We have seen a lot of commentary from industry experts over the last couple of days expressing concern about whether neighbourhoods will have the skills and resources to develop effective plans. If nothing else, there promises to be much more collaboration between authorities, communities and developers. That is, for the main part, to be welcomed although does rather assume that proposed financial (and other) incentives will encourage more of a "development-friendly" culture than we are used to. That will be vital in a system that relies on local referendums.

As well as the strictly planning points set out in our articles below, there are others which will impact on the system. Most notably the financial provisions, which will impact heavily on the resources available and the end to challenges based on accusations of bias or predetermination if a councillor has expressed a view on an application before making a decision.

Of course, much is left to be dealt with in regulations and development orders and it would be foolish to draw too many conclusions until we have seen all the detail. It is interesting, however, that there were a few things that we were expecting in the Bill which do not seem to have appeared and others which we are still awaiting from other sources. We've included those in this month's conundrum.

If you would be interested in us coming to talk to you and your colleagues about the implications of the Localism Bill for you, please do let us know.

In this issue:

  • The democratisation of planning for nationally significant infrastructure projects
  • Community Infrastructure Levy (CIL)
  • Neighbourhood planning
  • Diversifying the supply of public services
  • Housing and Regeneration in London
  • Local Referendums
  • Abolition of Regional Strategies
  • System tweaks - consultation and enforcement
  • Mayoral Development Corporations
  • Conundrum - the missing issues

The democratisation of planning for nationally significant infrastructure projects

The Bill reverses the two issues about the new regime for permitting nationally significant infrastructure projects which led it to be characterised as suffering from "democratic deficit". These were that decisions were to be taken by the Infrastructure Planning Commission (IPC), a body with no democratic accountability beyond the requirement to send an annual report to the Secretary of State which he laid before Parliament; and that National Policy Statements on nationally significant infrastructure were settled by the Secretary of State with no requirement for a vote in either House.

It does this first by abolishing the IPC and transferring its powers to the Secretary of State. The plan is for the change to take place in April 2012 and meantime the IPC and Planning Inspectorate - which will absorb the IPC's work and personnel as the Major Infrastructure Planning Unit - are working together on the transition, itself no mean feat. The Bill promises regulations on how to deal with applications not decided by the time of abolition.

Second, all National Policy Statements are to be subject to either the positive or negative resolution procedure in the House of Commons.

There is a raft of other technical changes drawing on the (limited) experience of the new system. I am acting for the local authorities involved with Rookery South, the first NSIP to be considered by the IPC and appeared before the CLG Select Committee on the Energy NPSs and those experiences have certainly showed me that some technical changes are to be welcomed.

Community Infrastructure Levy (CIL)

The Government is officially very keen on CIL - and my prediction is that local authorities will move quite quickly to bring forward charging schedules in their areas. The reason is quite simple - funding is being drastically cut, and CIL is one of the ways in which local authorities can improve their financial position (the others include Tax Increment Financing which we are to expect in a bill next year and the New Homes Bonus which is currently on consultation). CIL in the localism world will not be wildly different from what currently exists in the Planning Act 2008 and the CIL Regulations 2010. However, many local authorities and developers will not have had CIL in the front of their minds - this will now change given the value CIL can bring. We will be updating our CIL guides and reissuing them once the Government issues its proposals for amending the regulations, which we expect to see in the New Year.

So what are the changes in the Bill? The Regulations will be amended to require some of the CIL receipts to be handed over to third parties - no doubt to allow for the transfer of that "meaningful proportion" of CIL which must go to the community where the development, which generates the CIL, is to happen. As a consequence, the regulations will be able to prescribe a tougher regime for the monitoring of CIL expenditure by third parties. In addition, CIL can be used to fund ongoing costs, not only initial provision, and there are changes to the powers of the Inspector on examination in order to give the local authority more control.

Neighbourhood planning

From a planning point of view this is the localism aspect of the Bill. Neighbourhoods will be able to create neighbourhood development orders, neighbourhood development plans and community right to build orders. The orders can grant planning permission (similarly, for example, to a special, general or local development order) for most development but with certain exceptions. The neighbourhood plan will become part of the development plan and therefore the presumption in favour of the plan will apply.

Who can make an order? The parish council or a neighbourhood body initiates the process which (after some trials) culminates in the order being made by the local planning authority. In the case of a community right to build order, a community organisation begins the process. There are tests to be a neighbourhood body, which centre around neighbourhood links and social, economic and environmental wellbeing. The wellbeing criteria apply to community organisations as well, but for them there will be other criteria in regulations.

The procedure is similar to the examination of a development plan under the modern Local Development Framework (LDF) process with two major differences. First the examination is primarily by way of written representations, drawing on the new process used for nationally significant infrastructure projects. Second, if the order passes the examination it must then be put to a referendum. It must achieve more than 50 per cent to be adopted.

Neighbourhood plans can be initiated by a parish council or neighbourhood forum (ie, a body designated by the local planning authority (LPA) to act in relation to a neighbourhood). They go through a similar process including the referendum. The range and limitations on their content will be in regulations but they obviously have the potential to contradict development plans made at district level.

LPAs initially bear the cost of neighbourhood planning but there is an ingenious device for recovering costs. Under a neighbourhood version of CIL the cost of exercising neighbourhood planning functions is recoverable on the commencement of development. Liability for payment is similar to CIL, so in the last resort the landowner is likely to be liable.

Diversifying the supply of public services

The Coalition Government says it's time to break open public sector monopolies and let the people decide how their local services are run. To this effect, the Bill includes provisions giving communities a right of challenge to run local authority services and a community right to buy. But what does this mean?

The community right to challenge will allow specified local bodies (eg parish councils) at any time (or at a time specified by a local authority) to express an interest in providing or assisting the local authority with a local service. The local authority must then consider whether an acceptance of this expression of interest would promote or improve the social, economic or environmental wellbeing of the locality. It can only be rejected on grounds to be specified by the Secretary of State. If accepted, the local authority must carry out a procurement exercise relating to the provision of that service. This idea is potentially beneficial to the efficiency and quality of local services which local community bodies may well be best placed to run. The minutiae of how this system will work are yet to be prescribed.

The Bill also obliges local authorities to maintain lists of land "of community value" in its area and a nomination system is proposed to place land on this list. However, we are left gasping for a proper definition of "land of community value", which we are told will be determined in accordance with regulations. The effect of being on this list is that the owner of that land cannot dispose (ie, sell the freehold or deal with a lease granted for more than 25 years) without first meeting three conditions. The details of these conditions will be prescribed at a later date but in essence they require the owner to notify the local authority of their intention to dispose of the land and wait until a specified period (to be prescribed in regulations) has passed in order to allow community interest groups to make a bid for the land. No details are yet provided of this bidding system but the moratorium period may be many months if community interest groups are allowed time to draw up business plans and obtain funding.

Landowners may well be concerned by these provisions which restrict their right to sell their land when market conditions are optimum. On the plus side, compensation may be available to an affected landowner. However, there is no automatic right to this compensation and no guarantee it will be considered satisfactory.

Housing and Regeneration in London

The final substantive section of the Bill legislates new powers for the Greater London Authority. It allows for the devolution of housing, regeneration and economic development policy and powers from existing central government bodies.

The Bill provides for the abolition of the London Development Agency and the transfer of property, rights and liabilities to the Greater London Authority (or a London Borough Council, the City of London, or other applicable body). The Mayor of London will take on management of EU funding. In the future, the Mayor will be responsible for an economic development strategy for London. The Bill introduces legislation for establishing Mayoral Development Corporations (MDCs), similar in form and function to existing urban development corporations. The object of an MDC will be to secure the regeneration of its area and will be given extensive powers in relation to land and the provision of infrastructure and full planning powers.

The Bill also provides for the transfer of the functions of the Homes and Communities Agency in London to the Greater London Authority together with responsibility for the London Housing Strategy.

The Mayor will become responsible for a new London environment strategy to address biodiversity, waste management, and climate change matters among other issues.

Local Referendums

In an attempt to make local authorities more accountable to the community, a provision is proposed to give the local electorate the right to petition the local authority to hold a referendum on any local issue be it social, economic or environmental. Clearly, this could be a tool used by objectors to contentious planning matters.

In order to do this, a two-pronged test must be satisfied. First, the petition must meet the requirements specified in section 40, including being signed by at least 5 per cent of those entitled to vote in that local area. If the first limb is satisfied, the local authority must then determine whether or not it would be appropriate to hold a referendum.

There are only certain grounds on which the local authority can decide not to hold a referendum. Such grounds include that the petition is vexatious or abusive or the question to be put in the referendum does not relate to a local matter over which the authority has an influence. If a referendum is deemed appropriate, then sections 48 to 51 of the Bill provide the procedure to be followed.

Interestingly, the outcome of the referendum does not appear to be binding on the local authority. Instead, they are only under a duty to consider what steps could be taken to give effect to the outcome of the referendum. The local authority could decide not to take any action at all as long as they give reasons for their decision. Given this, it is hard to see whether these provisions will achieve the aim of making the local authority more accountable.

Abolition of Regional Strategies

This has, of course, been the most trailed element of the Bill from a planing point of view. Clause 89 (assisted by consequential amendments contained in Schedules 8 and 24) does what it says on the tin in this respect but, as ever, it is not quite that simple. The question everyone has been asking for the last few months is "how do you ensure proper planning across boundaries in a way which ensures development is carried out in a sustainable way?". With Regional Strategies (RS) consigned to the history books, all we will have outside of London are the local level of development plan documents.

That is where the proposed "duty to co-operate" comes in. Clause 90 will impose a "duty to co-operate in relation to the planning of sustainable development". This will apply to local planning authorities and other bodies to be prescribed (but who are expected to be other statutory bodies like the Highways Agency, and neighbouring authorities). Interestingly, the duty includes the obligation to "(give) a substantive response if consulted" (now there's an idea!).

Although I think we were given to understand that there would be a presumption in favour of sustainable development, this is not quite how it comes out in the Bill. The starting point for decisions will still be the development plan (which will not include RS) unless material considerations indicate otherwise. Quite what weight the rest of the development plan will have once the RS upon which it was predicated, and against which it was assessed has gone I wouldn't dare to say, but I expect there will be some interesting times ahead.

On the local side, the Bill gives the local planning authority more control - another move away from the ability of the Inspector to determine the final outcome.

System tweaks - consultation and enforcement

These points may not be in the headlines but nonetheless are important and will have an impact.

The Bill inserts a statutory requirement to hold pre-application consultation, although this will only relate to applications for certain development (to be set out in a development order). Regard must then be had to any responses received. Pre-application consultation, to some extent, happens for larger applications now, but will widening this and giving it a statutory footing slow the application process down? Developers may have to work harder to make the economic and community benefits of their proposals clear, especially if the end of predetermination challenges means councillors campaigning against the more controversial proposals.

From an enforcement point of view, and in an attempt to simplify the system and prevent numerous different applications slowing down effective enforcement, it will no longer be possible to apply for deemed planning permission in an enforcement notice appeal if, at the date that the enforcement notice was issued, there was a live application for retrospective consent for the same alleged breach of planning control. Presumably any subsequent refusal of consent will need to be appealed separately. The flip-side to this is that the planning authority can refuse to determine an application for retrospective consent for development already covered by an enforcement notice.

More alarmingly (although we all know the reason behind this), if a planning authority becomes aware of an apparent breach of planning control after the end of the usual four or ten year period, it may, within six months of the evidence coming to light, apply to a magistrates' court for a "planning enforcement order" which will effectively extend the right to take enforcement action for a further year (plus 22 days) following such an order. The court may make the order if it is satisfied on the balance of probabilities that there has been concealment of the apparent breach (which can include simple "inaction"). This may have significant repercussions when considering whether you can rely on the four or ten year period having expired.

Mayoral Development Corporations

This is a big point. In London, the Mayor, who is taking on a much enhanced role as "enabler of regeneration" (think London Development Agency/Homes and Communities Agency plus Mayor all rolled into one, as explained in Christine's article) will have power to designate one or more areas of London as "Mayoral development areas". The Secretary of State would then be required to establish a development corporation (an MDC) for that area with the powers requested by the Mayor eg, the powers of a local planning authority. Property, rights and liabilities may also be transferred. The object of the MDC would be to secure regeneration - but it potentially has a wide array of powers at its disposal including the provision of infrastructure, developing land including providing buildings, carrying on a business and providing financial assistance (which includes incurring expenditure for others).

Conundrum - the missing issues

There are a few things that we were expecting to see in the Bill but that don't seem to have made the cut and others that we must wait for further sources on.

A few examples are:

  • third party rights of appeal (no big surprise although its absence will disappoint many - for more on this issue see David's article in January's issue of JPL);
  • Tax Increment Financing (which will have its own legislation in early summer 2011);
  • detailed changes on CIL (we must await the amended regulations in the New Year); and
  • an unequivocal presumption in favour of sustainable development.

The latter in particular will come as an unwelcome suprise to some. Weren't we told to expect that? Have you found any other suprises in the Bill?