1st march 2007

TCPA Response to the Consultations on Changes to Planning Obligations, Paying PGS and Valuing Planning Gain

 

 

1.      The TCPA

 

We welcome the opportunity to respond to this consultation. The TCPA is an independent charity working to improve the art and science of town and country planning. The TCPA puts social justice and the environment at the heart of policy debate and inspires government, industry and campaigners to take a fresh perspective on major issues, including planning policy, housing, regeneration and climate change. Our objectives are to:

 

§        Secure a decent, well designed home for everyone, in a human-scale environment combining the best features of town and country

 

§        Empower people and communities to influence decisions that affect them

 

§        Improve the planning system in accordance with the principles of sustainable development

 

 

2.      Introductory comment

 

We have supported the principle of PGS provided it efficiently and effectively delivers infrastructure development and that the contributions are set at a rate that does not to freeze development output. We were also highly concerned that proceeds should largely be returned to the local authorities in which development takes place. We suggested, as reported by the House of Commons Select Committee, that 70% of revenues should be returned to the local authorities concerned. This figure has now been confirmed as the relevant percentage by the Government, which has provided some welcome certainty for local communities. There remains a question as to how PGS revenues should be spent to effectively deliver infrastructure. Since local authorities go to some lengths to set out their infrastructure and development plans in a statutory plan (which must accord with the Government’s own policies) the TCPA strongly recommends that the spending of PGS revenues by local authorities be primarily directed to realising those priorities set out in Development Plans.

 

We do not feel that PGS has become a political football: the published summary of responses to last year’s consultation reports generally supported the proposals, as did the Select Committee. There seems to be no political reason for Government to waiver in its general progress towards PGS provided the above criteria are met.

 

 

3.      Changes to planning obligations

 

Question One – Criteria Based Approach

 

We agree with the criteria based approach set out and agree in particular that contributions to affordable housing should continue to be matters for a Section 106 agreement (to ensure mixed income communities can be delivered). We agree that the current legal tests for Section 106 agreements should be used and suggest that the test of ‘proportionality’ will have to be used more clearly to ensure agreements do not become over demanding upon developments.

 

 

Question Two – Risk to EIA processes

 

We agree that EIA matters should continue to be covered under planning obligations, but further suggest that matters of environmental performance of a development should have been set out much earlier in the process in relation to the Sustainability Appraisal (SA) or Strategic Environmental Assessment (SEA) of the Plan concerned. Such matters should not be left to the EIA stage which may become increasingly redundant as SA/SEA processes become established. By defining environmental requirements upfront in the Development Plan, as on-site requirements, the Planning Value of a development for PGS purposes will be easier to determine.

 

 

Question 3 – Land for community public or community buildings

 

If provision of land (or indeed any other facility) is to be included as a part of the planning permission for development this factor would be reflected in the calculation of Planning Value (according to the consultation paper ‘Valuing Planning Gain’, December 2006). This effectively commutes part of what would otherwise be a PGS payment to an in-kind contribution which is later reflected in the calculation of Planning Value. Given that the land for, and the community facilities within, developments need to be planned in an integrated and sustainable way it seems necessary to retain this element within Section 106 agreements with the developer being effectively compensated for this when PGS payments are calculated.

 

 

Question 4 – Clear Legal basis for Housing Contributions

Question 5 – Common starting point for negotiations on social housing contributions

Question 6 – unintended consequences

Question 7 – Common Starting Points

 

We support a clearer and more widely shared approach to valuing contributions to affordable housing, the Plan provides the place to set out exactly what is required where this is not apparent through national guidance.

 

Local authorities should be permitted to advocate different proportions of social housing to be provided as part of a development since there will rightly be differing political priorities and market conditions pertaining in different parts of the country.

 

 

Question 8 - Contributions to travel plans

 

We believe that PGS revenue should be ring fenced at local authority level for spending on agreed Development Plan measures and as a consequence on agreed travel plan measures. If this is the case there should be no requirement for Section 106 negotiations to extend to local authority travel plans.

 

 

Question 9 – options for transport contributions

Question 10 – strategic transport matters

 

Section 106 contributions in relation to transport should be restricted to attaining access from the site to the nearest point on the transport network. Otherwise the objective of simplifying Section 106 contributions is unlikely to be achieved. It must not be assumed that investment in transport via PGS revenues will be slower and less effective than through Section 106. If Government cannot achieve an efficient transfer of funds raised to local authorities for expenditure on agreed Development Plan and travel plan objectives then the case for PGS will be severely weakened.

 

 

Question 11 – unifying planning and highways contributions

 

We agree that separate planning and highways contributions should be unified. Local authorities must be willing to present a unified position for developers to deal with.

 

 

Question 12 – presumption of using planning obligations where conditions are not are not possible

 

We support this presumption but believe it unnecessary to enshrine this as a requirement in legislation. Section 106 agreements can be indirectly appealed by applicants through appeals for non-determination.

 

 

4.      Paying PGS and valuing planning gain

 

We make the following summary points in relation to the consultation questions in these two consultation documents.

 

We welcome the decision to levy PGS on most developments and agree that thresholds pervert developer behaviour. This is evident in the practice of submitting multiple applications for housing that fall just below the threshold above which a contribution to affordable housing would be required. This would also be the fairest approach to ensuring that all pay their share of the new tax.

 

We would recommend, in relation to providing information and making payments exclusively by electronic methods, that a fallback is always available for those for whom electronic submissions and payments would be costly. This will be particularly important if PGS is to be payable on the ‘granny annex’ type development typically carried out by a householder.

 

Payment at the same time as filing a return should be allowed for the sake of simplicity even if this needs to be altered at a later date.

 

We suggest that local authorities and others in the development market should have access to entries on the register showing the PGS contribution paid and the responsible person. Entries should therefore be shown on the Land Register. Better information will better aid accountability, better enable errors to be identified and will also help inform the market for land and development. This would assist in efforts to bring sites forward for development, where this is desirable.

 

Given that, as the consultation paper makes clear, full valuation procedures are already set out by the RICS and by the VOA there appears little need for a pre-commencement agreement service to be provided. Especially given that its conclusions will nearly always be altered by the final grant of planning permission.

In relation to difficulties experienced by those becoming liable for PGS who may not have freehold vacant possession it might be worth considering making the freeholder responsible for payment in every case. Alterations to leases may then be necessary to ensure a freeholder can always recoup a fair proportion of liability from the tenant.

 

We observe that contrary to much speculation both current use (CUV) and planning value (PV) in the form of open market value is regularly calculated for a range of purposes (as set out in the RICS Red Book, for example). Therefore, we do not believe the proposals in the consultation present any major difficulties. 

 

We are supportive of the principle that hope value should not be included in CUV. In relation to allowing the value of demolished buildings (and possibly some established uses) to be considered as part of CUV we are concerned about a disjunction with planning law and newly proposed practice. It would be simpler in terms of operation if any previous use or previously demolished buildings were not considered as part of CUV. In circumstances where a previous use or previously demolished buildings remained in part, a Certificate of Lawfulness of Existing Use or Development (CLEUD) or a Certificate of Lawfulness of Proposed Use or Development (CLOPUD) would be granted. Indeed, the requirement for a CLEUD or CLOPUD would appear the more obvious precondition for taking account of existing use or development in calculating CUV where any doubt exists.

 

We suggest the time limit after which HMRC should no longer be allowed to intervene to alter a PGS notice should be contiguous with the time period after which the High Court by convention will no longer review a planning decision – approximately six weeks.

 

Please note that the positions we have set out here do not preclude us from raising concerns that may arise in the proposals at a later date.