The Levelling-up and Regeneration Bill was published in May 2022 and it is huge. The PAS team have done an initial run-through of the planning parts of it - expect to see some updates to this as our thoughts develop.
Introduction
The Levelling-up and Regeneration Bill (LURB) is best thought of as the scaffolding for a new planning system. The Bill itself is not easy to read or to understand, so we recommend that you start with the policy paper that summarises the steps that Government is taking to deliver their programme. Our initial thoughts on the Bill follow the same structure as the policy paper.
A genuinely plan-led system
A set of National Development Management Policies (NDMPs) will be introduced. These will set policies on issues that apply in most areas and will sit alongside local plan policies in decision-making. It is hoped that this will contribute to making plan production more efficient by taking out duplication between national and local policy. Local plans will focus on policies for local issues.
The LURB will introduce legislation so that decisions will need to be made in accordance with Local Plan policies and (the new) NDMPs. In the event of conflict between the local plan policy and NDMPs, NDMPS will have primacy.
Current planning legislation allows departures from the development plan where material considerations indicate that the departure is warranted. The LURB is changing this so that decisions must be made in accordance with the development plan and national development management policies, unless material considerations strongly indicate otherwise. This introduces two changes: consideration of the NDMP at the outset and a judgement on how strong a contrary material consideration is. The key word here is ‘strongly’ and how it will be defined or interpreted.
The LURB will introduce new wording into legislation that details what can be included within a Neighbourhood Plan. The primary things that a neighbourhood plan can do are:
allocate land for development in the neighbourhood area, setting out the amount, type and location, and timeframe for delivery of that development. include other land use or development related policies detail any infrastructure and affordable housing set specific design requirements contribute to the mitigation of, and adaption to, climate change. not be inconsistent with or repeat policy that already exists in NDMPs not prevent housing which is proposed in the development plan not propose less housing
Where the take-up of neighbourhood plans is low the government are introducing a new simpler neighbourhood planning tool called a “neighbourhood priorities statement”. This will allow communities to identify their key priorities for their local area, including their development preferences, and will provide a simpler and more accessible way for them to participate in neighbourhood planning.
The Duty to Cooperate is to be repealed and replaced with a more flexible alignment test (that is yet to be defined/described). There is no information yet on how this will work to encourage cross-border planning between local authorities.
The LURB creates a new power for at least two local planning authorities to produce a Spatial Development Strategy (SDS). These will be known as participating authorities. The power is available to all local planning authorities that aren’t Combined Authorities, Mayoral Combined Authorities or part of Greater London. The power is optional and can be used in a similar way to mayoral powers.
Supplementary Plans are a new type of document that may be prepared by a local planning authority. They will replace ‘supplementary planning documents’ which do not have the weight of the development plan. Supplementary Plans are independently examined. There are certain limits on the allowable scope of supplementary plans (either by subject matter or geography). Supplementary plans address site-specific needs or opportunities which require a new planning framework to be prepared quickly (like a new regeneration opportunity), or to act as a vehicle for setting out authority-wide or other design codes.
The LURB retains the concept of a public timetable for the development plan, set out in a document prepared by a local planning authority, and retains the existing intervention powers. It is unclear at this stage if Local Development Strategies (LDS) will remain. Plans will be required to be produced within a statutory 30 month period. The intention is to achieve a shift from a document-based requirement to one that will make the relevant data publicly available in a prescribed digital format. This will ensure the timetable is clearer and simpler for local planning authorities to update.
The principle of independent examination is being maintained and ‘soundness’ will remain the objective test of the Inspector. Inspectors can pause examination for further work and withdrawal will only be an option if the examiner or SoS recommends it. New system’ Local Plans will be required to be produced in 30 months and updated at least every five years. Local Plan Commissioners and Gateway Reviews will be introduced to help council's keep plan production on-track leading up to examination.
The LURB does not include any information on timing or transitional arrangements.
Councils will be asking themselves: ‘should we continue working on our local plan?’
This is what we know:
- The December 2023 deadline for getting a Local Plan in place was not mentioned within the LURB.
- The government is encouraging councils to get (‘current system’) plans in place asap, acknowledging “….that work will be valuable work anyway”.
- To support this they have said that alongside the Bill:
“To incentivise plan production further and ensure that newly produced plans are not undermined, our intention is to remove the requirement for authorities to maintain a rolling five-year supply of deliverable land for housing, where their plan is up to date, i.e., adopted within the past five years. This will curb perceived ‘speculative development’ and ‘planning by appeal’, so long as plans are kept up to date. We will consult on changes to be made to the National Planning Policy Framework.”
Questions about how to proceed will reflect where you are in the plan making process. There are 4 main transition scenarios and questions facing local planning authorities as we see it:
Scenario 1 - The Local Plan has been submitted for, or is at examination right now
Key questions:
- If found sound, will our plan be 'up to date' in terms of not requiring a 5-year housing land supply?
- Are we facing any increased risks due to the proposals in / statements made about the LURB e.g. our plan being withdrawn from examination or not being adopted even if it is found sound?
- Will we be required to do an immediate review of our plan under the new system?
- How will we be affected by the new data standard requirements?
- When should we begin preparing our LURB local Plan?
- How will the 'weighting' of National Development Plan Policy operate for us?
Scenario 2 – Local Plan production / update is advanced (e.g. at least at Reg 19 stage) and aiming for December 2023 adoption:
Key questions:
- Is there any advantage/incentive (outside of simply having an up to date plan in place) for continuing to work towards getting our plan adopted by December 2023?
- If found sound, will our plan be classed as up to date in terms of not requiring a 5-year housing land supply?
- Are we facing any increased risks due to the proposals in the LURB e.g. a challenging timetable, Duty to Cooperate challenges, examination issues – could the plan be delayed in favour of the ‘new, simpler, quicker’ system?
- How will we be affected by the new data standard requirements?
- When should we begin preparing our LURB local Plan?
- How will the 'weighting' of National Development Plan Policy operate for us?
Scenario 3 - Local Plan production / review advanced, adoption planned for 2024
Key questions:
- Will there be a transition period that allows us to continue preparing our plan under the current system post December 2023?
- How much of the work we have, and are preparing to, undertake will not be required or not fit for purpose post reforms e.g. when will data standards and new Sustainability Appraisal (Environmental Outcomes Report) requirements affect the work we’ve already done?
- The Infrastructure Levy will change the way we plan for affordable housing and other infrastructure requirements to support development through planning policy. How do we take account of this in the absence of any detail?
- What is the risk of us pausing to enable us to prepare a plan under the new system?
- How will the 'weighting' of National Development Plan Policy operate for us?
Scenario 4 - Not currently reviewing the Local Plan / early thinking.
Key questions:
- How much work do we do while we await the transitional details?
- What can we start doing now?
- How do we work with Government to engage in the “Test” and “Learn” approach to some areas of reform?
Delivering Infrastructure
The Levelling Up and Regeneration Bill (May 2022) (“LURB”) sets the framework for government to introduce a new Infrastructure Levy (“IL) that would principally replace the current system of developer contributions (The Community Infrastructure Levy and Section 106 Planning Obligations) as a charge on development for infrastructure.
Whilst the Bill sets out the framework for the new Levy “IL”, the detailed design will be delivered through regulations.
Further details on the “IL” can be found in the LURB, the accompanying explanatory notes and the Policy paper “Levelling Up and Regeneration: further information” published on the 11 May 2022.
Compared to CIL, the focus is shifted for rate setting towards the capture of land value uplift. The levy will be charged on the value of property when it is sold and applied above a minimum threshold. The rates will be set as a percentage of gross development value rather than based on floorspace.
Yes. Levy rates and minimum thresholds will be set and collected locally, and local authorities will be able to set different rates within their area.
The Bill sets out a non-exhaustive list of infrastructure that IL could be applied to and which, unlike CIL, includes affordable housing. Facilities and spaces that preserve or improve the natural environment; and for the mitigation of, and adaption to, climate change are also included.
IL will be applied to supporting the development of an area by funding the provision, improvement, replacement, operation or maintenance of infrastructure. This is the same as CIL, however it is worth noting that the Bill would enable regulations to be made to provide for minimum spend on specific types of infrastructure, additions to the infrastructure list, and spend on non-infrastructure items.
Yes. Section 204B of the LURB provides for it to be compulsory for charging authorities to charge IL, and for local planning authorities (LPAs) to ordinarily be the charging authorities with limited, defined exceptions.
It is intended that IL will be introduced over time, to allow a ‘test and learn’ approach to IL regulations. The Bill gives a power to the Secretary of State to set a deadline date for the introduction of IL in a particular charging authority’s area.
Yes. The Secretary of State must allow a 12-month period between giving written notice that a local authority must issue a charging schedule, and the point at which they must issue it. Provisions are also made for when the Secretary of State can appoint a person to prepare or issue the charging schedule on behalf of the charging authority.
Not completely:
- CIL will be retained for the Mayoral CIL in London.
- CIL and S106 will continue to operate in a charging authorities’ area until such time as an IL is brought in to place. Don’t forget though that the Secretary of State can direct when this might be.
- Sites permitted before the introduction of the new Levy will continue to be subject to their CIL and S106 requirements.
- S106 planning obligations are likely to be retained but only for use in specific circumstances and with greater controls (see below).
With the above in mind, local planning authorities could put in place, or revise, a CIL Charging Schedule in advance of introducing an IL.
The Bill allows for the Secretary of State to regulate on how IL will relate to Section 106 planning obligations, to secure funding from developers to deliver mitigations to the impact of development in the area where such development occurs. The retained role for Section 106 is likely to be to support delivery of the largest sites. In these instances, Government have indicated that infrastructure will be able to be provided in-kind and negotiated, but with the guarantee that the value of what is agreed will be no less than will be paid through the Levy.
Government have said that they will still require developers to deliver infrastructure integral to the operation and physical design of a site – such as an internal play area or flood risk mitigation. Planning conditions and narrowly targeted section 106 agreements will be used to make sure this type of infrastructure is delivered.
Yes. A charging authority must issue a charging schedule in respect of development in its area. This schedule would set out for the authority’s area IL rates, or other criteria, which will determine the calculation of the amount of IL that will be payable.
Yes, and many of the existing provisions for CIL are replicated in LURB.
The exact method of charging IL will be set in regulations. It is currently intended that IL will be charged based on the final gross development value of development, whereas CIL is charged based on the floorspace of development when planning permission is granted.
Some CIL provisions will be replicated however, in setting rates or other criteria regard must be made to some additional matters including those relating to:
- the economic effects on land value of various aspects of the planning and development process.
- levels of IL revenues in an authority’s area.
- an authority’s infrastructure delivery strategy (see below), if published.
- the desirability of ensuring that the supply of affordable housing is maintained at a level which delivers the same amount of affordable housing as over a previous specified period, which can include under the current system of S106 obligations.
Further details are likely to be set out in regulations.
Government have said that local authorities will be able to set different rates. Further details will be set through regulations which are likely to allow charging schedules to adopt specified methods of calculation. For instance, charging schedules could operate based on descriptions of the type of development or according to the location of the development, or determine a threshold below which IL is charged at a nil or reduced rate.
IL regulations are likely to include provisions for authorities to permit or require any threshold below which IL is charged at a nil or reduced rate. The minimum threshold could be set out on value per square metre basis, with the Levy being charged on any value above the threshold.
This is not clear however reference is made to future regulations potentially permitting this. In the explanatory notes Government give an example of setting stepped rates, which increase at specified future points. This could provide charging authorities that are cautious about not making development in their area unviable with a buffer to ensure that rates are not set too high in the first instance. This buffer could be decreased over time using stepped rates. This would allow rates to be found that capture more land value uplift.
The definition of development is expanded to more explicitly include material changes of use to an existing building, or part of a building, in order to ensure that IL can be charged on permitted development.
Liability occurs on commencement of a development however calculation and collection of the payment will be on completion or in instalments leading to completion. Different payment requirements would apply under enforcement conditions.
It is likely that a charging authority will be required to provide estimates of IL chargeable in respect development of land. This is because the final liability will not, in most cases, be known until a development has been completed and/or sold. It could be considered reasonable for developers of land to be given estimates of IL chargeable ahead of receiving notice of their final liability.
Government proposes to introduce through regulations an ‘in-kind routeway’. This will include provisions for payment of IL in-kind rather than in money, for instance through the delivery of infrastructure (including affordable housing) or through making land available. This will enable the delivery of onsite affordable housing as an in-kind payment of IL. It is intended that a substantial portion of the value captured through IL will be delivered in this way.
Yes. LURB provides regulation-making powers for requiring charging authorities to pass funds raised through IL to other bodies to spend and where there are no such bodies for them to apply IL receipts in the same manner.
Provision is explicitly made about exemptions to or reductions in IL for charities. IL regulations may make provision about other exemptions from or reductions in liability.
Unlikely. Many of the existing provisions that set the legislative framework for CIL are retained. The powers required to operate IL are substantially similar to those that exist for CIL, but there will be some differences.
This is a new requirement for charging authorities to prepare and publish an infrastructure delivery strategy. This document will set out their approach to infrastructure planning and will include a strategic plan for how IL money will be spent. There will be a requirement for the infrastructure delivery strategy to be independently examined. Regulations will set out the form and content of an infrastructure delivery strategy, how it should be published, any procedures that should be followed for its revision or replacement and who should be consulted as part of the preparation process.
Powers are included to permit IL to be used for the reimbursement of expenditure already incurred and for the giving of loans, guarantees and indemnities. We are yet to see though whether this will require the Secretary of State to publish a percentage on what can be used to repay borrowing as is the case with the current CIL regulations.
Regulations may require the separate accounting of revenue from IL and require its use to be monitored and reported on by anybody which holds IL revenue. This is important and highlights the need for strong and effective corporate governance of collection, allocation and spend of IL revenue.
LURB provides for regulations that would have similar provisions to CIL.
Creating beautiful places and improving environmental outcomes
Every local authority will need to produce design requirements that should be met for planning permission for development to be granted. This will be part of the local plan or as a new supplementary plan document. This whole area level of design requirement will not need to cover every aspect of design or every description of development.
It is proposed in the Bill that the Secretary of State will be able to direct a local planning authority to prepare, adopt or revise their local plan or supplementary plans to include the required area wide design requirement.
Yes, the council or local communities can produce more detailed local area, site or neighbourhood design codes that build off the overarching area wide code.
Design codes both local and area wide will have full weight in planning decisions.
It is not clear at the moment whether design codes will have a different test to assess whether they are "provably popular".
There isn't a timetable at present but it will require changes to regulations, national policy, and guidance and wider support for local councils, communities, and applicants.
The National Model Design Code (NMDC) will continue and the NMDC will sit behind the local versions of design code.
The Office for Place will have a role to support LPAs and communities to deliver design codes and "better design outcomes". They are working with 39 LPAs in the design code pilot and pathfinder project and DLUHC & Office for Place will be sharing templates and learning from the pilot and pathfinder authorities.
It is not clear whether there will be other interventions or training to help increase capability and capacity for design skills in LPAs and elsewhere.
Heritage Assets will receive the same planning protection as already received by conversation areas and listed buildings.
Yes it is proposed that it will be a statutory requirement for all LPAs to maintain an Historic Environment Record for their area.
It is proposed that LPAs enforcement powers are enhanced to protect listed buildings through the use of temporary stop notices, issuing Urgent Works Notices, and making it easier for LPAs to get cost recovery for required work.
No, the environmental effects of plans and projects will assessed through the new Environmental Outcome Reports. This will include Nationally Significant Infrastructure Projects.
No, there will be a duty on Secretary of State for this new Environmental Impact Assessment approach to not reduce the overall level of environmental protection. Land designated as Green belt, AONBs and high risk flooding area will continue to be protected in planning application decision making.
No, BNG will still be implemented in late 2023.
They build on last years Environment Act. Changes to the NPPF will make sure that the Environment Act’s reforms are introduced into planning policy and decision making.
Regeneration
The Bill is seeking to empower local leaders to regenerate towns and cities so that local pride is restored in places. To do this, it includes a number of practical measures for local authorities to apply, or seeks to speed up and simplify existing measures.
The Bill includes many measures to encourage investment and development in towns and cities, but some specific initiatives stand out for land assembly and regeneration:
- simplifying the process for compulsory purchase orders, to reduce the time and risks involved
- a new form of locally led urban development corporation, and increased freedoms for New Town Development Corporations
- new powers to force landlords to find tenants for vacant high street buildings
- making the temporary changes to pavement licensing permanent in order to encourage outdoor dining
Measures are intended to speed up the delivery of projects where a CPO is needed and clarify local authorities’ powers. The Bill ensures that local authorities have the powers to compulsory purchase land for regeneration purposes, similar to those currently used by Homes England and the Greater London Authority. It gives greater discretion to the acquiring authority to use the most appropriate procedure for considering objections - ie a public inquiry or representations. It also includes a provision for the CPO to be "conditionally confirmed", which aims to encourage acquiring authorities to make a CPO earlier in the delivery process alongside other consenting and funding processes and before all impediments to delivery of a project have been overcome. Linked to this, the Bill increases flexibility of the date an acquiring authority becomes the legal owner of land so that it can be postponed should circumstances change.
Rather than additional grants or public funding, the Bill intends to introduce reforms so that the valuation of land is more akin to a normal market transaction and therefore the costs of CPO are more realistic. It will ensure that the value attributable to prospective planning permission (ie ‘hope value’) is included in valuations and make sure that the planning assumptions in the Land Compensation Act 1961 are more realistic.
Alongside the Bill, the Government intend to update their guidance on the compulsory purchase process and update the Model Claim Form to make it more user friendly. The government will also look at how expertise on compulsory purchase can be accessed by local authorities and is exploring a review of compulsory purchase law with the Law Commission.
The Bill will enable any local authority (or group of authorities) to request that the Secretary of State designate a regeneration area and establish a development corporation. These new locally-led UDCs will then be accountable to local authorities, rather than the Secretary of State, and have all of the planning and development powers available to centrally led development corporations including local plan making, neighbourhood planning and development management. This follows the Mayoral Development Corporation model, enabling all local areas to set up a locally accountable development corporation.
The Bill makes some small but signficant changes to the process for establishing locally-led New Town Development Corporations. Similar to UDCs, New Town Development Corporations will receive local plan making, neighbourhood planning and development management powers. The Bill will also remove the cap on the number of board members on a corporation and the aggregate borrowing cap, subject to agreeing borrowing limits with HM Treasury on a case-by-case basis.
The Bill will give local authorities the power to ensure that landlords auction empty shops or commercial premises to find new tenants. These "high street rental auction" powers will apply to vacant commercial properties in town centres or high streets which have been vacant for more than one year. Following a two-month notice period during which landlords can evidence a signed lease, an authority will be able to serve a final rental auction notice to trigger a two-month auction period for bidders to come forward to take a lease on the property.
The aim of the Bill is to give local authorities some ability to bring vacant units back into use and tackle landlords that allow buildings to remain vacant. However, councils will want to consider short and long term opportunities, and to avoid creating adversarial relationships with landlords that jeopardise collaboration over longer term regeneration ambitions or potential new investment partners.
To support the implementation of rental auctions, the Government will work with local authorities and the property sector to develop and publish clear guidance for how rental auctions will work in practice. Tools like a model lease, as well as guidelines for a cooperative process between local authorities, landlords and tenants will be published.
The Bill makes permanent the existing temporary measures to pavement licensing. These measures were introduced in 2020 in response to the Covid pandemic in order to streamline the process of applying for a license to put furniture on the highway as well as reduce the costs of this for businesses like cafes, pubs and restaurants. The Bill makes these changes permanent.
Market reform
The Bill introduces the means for Government to collect and publish data on landownership as well as potential or recent land transactions. This should increase transparency over landownership and provide open data on the value of land being purchased. The details of how this will be achieved will be subject to further consultation.
The Bill introduces a new process of 'commencement notices'. Commencement notices will be needed when a scheme with planning permission starts on site and will contain a timescale for building-out the development. If development doesn't come forward in-line with that timescale then planning permission can be revoked. There will be further consultation on how this will work in practice.
Yes there are. The Bill signals the intention to bring forward legislation which would clarify what a "suitable permission" is. The term "suitable permission" is contained in the Self-build and Custom Housebuilding Act and has resulted in an inconsistent approach to how plots of land granted permission are monitored as self-build, particularly where a CIL is not in place. This has caused confusing over whether consents for small scale development could or should be classed as meeting the duty under the Self-build and Custom Housebuilding Act. The legislation, when brought forward, will provide clarity for the monitoring of permissions.
Recent years have seen an increase in second home/holiday home ownership and a rise in 'staycations' and short-term lets. These factors have reduced the availability of housing stock in some areas quite severely. The Bill proposes introducing a new discretionary council tax premium of up to 100% on second homes and homes which have been empty for longer than one year (rather than two years as currently).
Wider improvements to DM procedures
At present the maximum period to take enforcement action varies depending on whether it is for carrying out works or change of use. The Bill proposes that there is a single maximum time period of 10 years.
There will a new notice called an enforcement warning notice. The new power will enable LPAs to serve an enforcement warning notice asking the person concerned to submit a retrospective planning application within a specified period.
Yes they will increase where there is a failure to comply with a breach of condition notice or a failure to comply with a S215 untidy land notice.
Yes the fee will be doubled in price.
Yes they will be increased from 28 days to 56 days.
The Secretary of State will have a new power which will allow them to dismiss an appeal in relation to an enforcement notice or an application for a lawful development certificate, should it appear to them that the appellant is causing undue delay to the appeals process.
Yes there will be a number of changes outlined in Clause 104 to restrict appeals against enforcement action and restrict an applicant to only one opportunity to obtain planning permission retrospectively.
Yes there is a new power for the Secretary of State to instruct local planning authorities to not take enforcement action over a condition or restrict action that might be taken. Examples of where this might be lifted include construction and delivery time conditions.
There will be a requirement for applicants on certain applications to consult with local communities, and specified persons prior to submitting a planning application. This will include the types of applications where pre-applications are already mandatory and include new types of applications, details of which will follow.
There will be new powers to vary an existing planning permission to allow greater flexibility for making non-substantial changes to planning permissions and this is detailed in section 73B of the Bill.
Yes Planning Inspectors will have the power to change the procedure for determining a planning appeal if an alternative would be more suitable and timely.
There will be two new routes to apply for planning permission for the development of Crown land:
- Where the development is considered to be of national importance and where it is necessary that the development be carried out as a matter of urgency
- Where development is of national importance but not considered to be urgent.
Details of these provisions are outlined in S293 of the Bill.
It is the intention to charge applicants for the time taken by consultees external to the Council to comment on development proposals. The details of how this will be achieved is subject to further consultation.
Yes new legislation is intended to fast track the consents for priority projects including shorter examination times. Alongside this will be powers to set a timetable to agree non-material changes to Development Consent Orders.