Perhaps the two most important proposals for those concerned with the promotion of strategic land and the landowners themselves are the suggested replacement of CIL and Section 106 Agreements with a flat infrastructure levy and the modification of the local plan process. Each of these is explored briefly below.
In what would be a truly radical change to the planning landscape, it is proposed that both CIL and Section 106 are abolished and replaced with a universal, value-based, flat rate charge to be called the Infrastructure Levy. It is proposed that this will meet all infrastructure needs associated with the development and unlike Section 106, contributions will not be open to negotiation on viability grounds. Consultation is also taking place on whether the infrastructure levy should also form the basis for a mechanism to capture part of the land value uplift that planning permission for development creates.
Whilst the abolition of Section 106 may be welcomed by some, not least due to the perception that the negotiation of such documents is a cause of delay in the land promotion process, careful thought does need to be given to the proposed alternatives. Any significant land value capture is likely to have a knock on effect on prices paid to landowners and as a result impact the motivation for both landowners and promotors to play a part in the provision of land for development. In addition, the White Paper does seems to hint at an understanding of all that s106 achieves in mitigating the impact of development rather than being a money raising mechanism. Delivery of affordable housing and on and off-site infrastructure are fundamentals of good planning, as are new concepts such as Biodiversity Net Gain and Environmental Improvements. Having a document by which one can hold a variety of different parties’ ‘feet to the fire’ is far better in our view, than a sink-fund approach like CIL. The new levy proposals even suggests that the responsibility for infrastructure will fall squarely on District Councils, which might displease landowners, developers, County Councils and District Councils alike.
The second significant change proposed is a complete overhaul of the local plan process. The apparent motivation behind this is two-fold. First, to increase the speed at which local plans are adopted, with an ambitious target that all authorities will have a plan in place within 30 months of the process being initiated and second, to simplify the allocation of land by introducing three categories of allocation – Growth Areas, Renewal Areas and Protected Areas. It is proposed that where land is identified as a Growth Area (akin to a formal allocation within the existing plan process), this will have the effect of automatically securing outline planning consent in respect of that land.
Whilst such a step will be beneficial in reducing the lag between sites being allocated for development, and development taking place on those sites, we anticipate that this will lead to a greater front-loading of effort and expense as more information will be required during the local plan process to facilitate the effective grant of outline permission on identification within an adopted plan. The release of partially consented land on to the market in ‘one-hit’ may also have implications for prices, meaning that greater thought may need to be given to disposal strategies to ensure that ‘best value’ is secured. This will be something of particular concern to institutional landowners and those holding land in trust.
As a final thought, it is the Government’s intention that any reforms to the planning system that survive the consultation and legislative processes are implemented in time for new local plans to be in place by the end of the current Parliament (2024). Given the proposed 30-month timetable for those plans any changes to the system are likely to be in place within the Promotion Periods set out in many existing Promotion Agreements. Both landowners and promotors may wish to give early consideration to how these proposals may impact the operation of those agreements to ensure that there are no surprises further down the road.
The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at October 2020.