The Mango Blog

An irreverent look at some of the hot topics in planning


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  • No need, no go.

  • Has Welsh Government's love of the anachronistic retail "need" test finally killed the retail development market in Wales?

    The struggling retail development and investment market in Wales has been dealt another blow this week in the judgment of the Court of Appeal in Waterstone Estates Limited v Welsh Ministers and Neath Port Talbot County Borough Council [2018] EWCA Civ 1571.

    This judgment has brought into focus just how divergent, and comparatively difficult, national retail policy in Wales has become from that in England and brings into serious question whether there now is any future for retail investment and development in Wales.

    The case

    The case centred on the provision of roadside services adjacent a trunk road, just beyond the defined settlement limit of the village of Glyn-Neath. The proposal was refused by the local planning authority on various grounds and then refused at appeal by an Inspector on the basis, inter alia, that the identified need for new retail had already been met upon a backland site adjoining the village centre, well away from the highway.

    The decision and the case that followed brings into focus the concept of retail need in a development management context.

    In England, the need test was abandoned in 2009 following the2006 Barker Report into the Planning System commissioned by DCLG that concluded that a retail need test is not fit for purpose in a development management context. At Paragraph 1.31 of her final report, Ms Barker advised:

    “ Policy revisions are also desirable to ensure that developments are not turned down on
    inappropriate grounds. It is not the role of local planning authorities to turn down
    development where they consider there to be a lack of market demand or need for the
    proposal. Investors who are risking their capital and whose business it is to assess likely
    customer demand are better placed than local authorities to determine the nature and scale of demand. Imposing requirements to demonstrate need in this development control context, as presently occurs in PPS6 is unnecessary, as well as adding to costs (needs tests can cost upwards of £50,000 each on top of planning fees and other documentation).”

    She added at 1.13:

    “This is particularly important as the current system of needs tests in town centre first policy
    also can have perverse effects: it protects incumbents and gives preference to operators that have lower sales densities. These incumbents may be operating in out-of-town shopping centres, leading to the effect that if need is demonstrated and there is no impact on the town centre, an existing out-of-town shopping centre could expand while there is no application for a sequentially preferable site in the town centre. Furthermore, incumbents may find it easier to expand incrementally while prospective local entrants fail at any one time to demonstrate sufficient need for a one-off increase of space. The needs test should therefore be removed.”

    Despite this damning indictment of the need test, Welsh Government has persisted with including and indeed strengthening the weight to be afforded to this test through its revisions to Planning Policy Wales (“PPW”).

    The Court of Appeal’s judgment centered on two matters, but in terms of retail the key question before it was whether the need test was a “gateway” test that had to be satisfied before considering the sequential test and impact; or merely one of a number of tests. Lord Justice Hickinbottom concluded at paragraph 74 of the judgment (which was agreed by Lord Justices Davis and Singh): “In my view, those paragraphs clearly indicate that, in the context of planning applications, there is a discrete requirement for need to be established which, if not satisfied, is a breach of PPW policy.”

    He added at paragraph 77, in respect of PPW paragraph 10.2.12 which states “If there is no need for further development for retail and commercial centre uses, there will be no need to identify additional sites” applies equally to development management.”

    At paragraph 78 he added: “Looked at broadly and in its proper context, in my view paragraph 10.2.12 firmly indicates that, outside centres, need is a discrete requirement for planning applications; and, if it is not satisfied, then there is no requirement (or “need”) to proceed to consider whether there is any sequentially preferable site.”

    The judgment also considered the issue of what “need” the test referred to, since plainly the proposal was for a roadside services area that all parties accepted could not reasonably be sited at the allocated village centre site. He opined at paragraph 84 :

    “However, first, as Mr Buley powerfully submitted, “suitable” in paragraph 10.2.14 must mean suitable for general retail use because, in that paragraph, it is applied to plan-making as well as decision-taking on an application, and Mr Lewis accepts that, for in the context of plan-making, that is the accepted (and only sensible) meaning. It must have the same meaning in respect of each of those functions….”

    In this respect he then went further to distinguish this approach from that adopted in England and Scotland:

    “That meaning is clearly not the same as that used in the three English and Scottish authorities relied upon by Mr Lewis. I do not consider that those cases assist on the issue of construction of PPW: they concern the construction of different national policies that apply in England and Scotland.”

    In his postscript to the judgment he added in paragraphs 89 & 90:

    “As a result of the construction of the PPW which I consider to be true, it may well be that policy relevant to need on an application for planning permission for retail use in Wales is significantly different from that in England. That is not surprising, given the devolved nature of town and country planning. It is to be expected that, over time, planning policy and substantive law will increasingly diverge. The Planning (Wales) Act 2015, section 3 of which inserts a new section 60 into the 2004 Act requiring the Welsh Ministers to prepare and publish a National Development Framework for Wales, is only likely to increase the pace of change in Wales.

    I emphasise that Mr Lewis, who is highly experienced in planning matters in Wales, did not for a moment suggest that there should be an assumption that planning policy in Wales is the same as in England. This case is a further reminder as to how dangerous such an assumption might be.”

    Effects

    The overarching effect of this judgment cannot be underestimated for the retail development sector. Many Welsh local planning authorities have, recognising the “perverse effects” that Barker identified could arise when applying a theoretical need approach to development management, adopted a pragmatic approach of considering the need test “in the round” when determining retail applications. Such pragmatism is essential in a dynamic retail market and where many development plans are now either long in the tooth or entirely absent and local planning authorities have been reluctant to update their retail evidence base due to swingeing budget cuts.

    It seems that once again therefore, local planning authorities in Wales may be hamstrung in applying common sense by poorly drafted Welsh Government policy. This policy was, even when drafted by the boffins in Cathays Park, a clumsy attempt to jump on the populist bandwagon to stop the growth of large supermarkets in the early 2000s. As demonstrated in this judgment, this policy has simply failed to keep up with the retail sector’s changes, to the detriment of investment and new job creation.

    The retail development sector in Wales was on life support before this judgment. Outside of Cardiff, Wales has not been on the radar for substantive retail investment for some years. By having a planning framework now demonstrably more onerous than England, we are becoming even more of an investment backwater.

    It is beyond ironic that this policy does not apply, and therefore did not stop Amazon securing permission, in the same planning authority of Neath Port Talbot and apparently in under a month, for new warehouse to support its growing internet retail operations - Operations that now represent the biggest threat to the high streets of Wales.

    Unless Welsh Government steps up to the plate to change its approach immediately, I fear that retail developers and investors will abandon Wales altogether. Of course, when you take this approach together with draft changes to TAN1 for housing, it does seem that stopping development is perhaps Welsh Government’s underlying objective.

    The judgment’s postscript also underscores the need for those developers brave enough to still pursue retail development in Wales, and their advisers, to understand just how different the planning system here now is.



  • CIL - Time for a re-think?

  • When CIL was launched in 2010 it was fanfared as the substitute for Section 106 agreements. Councils would be both incentivised by the possibility of great riches to fund infrastructure and limited in the way they could use Section 106 agreements for such matters. Developers in return would have a clear understanding of the size of cheque they would be asked for by the local planning authority if consent were granted. However, ideas generated by the boffins in the ivory towers of Westminster and Cathays Park rarely pan out on the ground in the way they are intended. The need for CIL to follow the adoption of new development plans has delayed its introduction across much of England and Wales. While the rates are supposed to be set by an assessment of infrastructure costs, developers were never going to be able to fund everything; and with the scythe that the Government has taken through local government budgets, the prospect of CIL actually delivering big ticket items is now a pipe dream in many cases. The reality is therefore now in many cases that both developers and Councils try their best to bypass CIL and deal with contributions in other ways. Not allowed to ask for Section 106 contributions for infrastructure on the Regulation 123 list? Easy – just narrow down that list to exclude projects that you expect funding to cover. Worried about the pooling restrictions? Make sure each request covers a separate part of a project so that it can be differentiated from other contributions and not regarded as pooling. The most ridiculous skirt-around of CIL concerns highway contributions. The Regulations expressly restrict the ability to ask for Section 106 contributions towards highway infrastructure. However it is now common practice for Section 106 agreements to be contingent on Section 278 Agreements that themselves require a financial payment. There are then those non-infrastructure items such environmental management of Special Protection Areas, for which CIL just doesn’t work and the restrictions on pooling could prevent compliance with requirements of the Habitats Regulations. Councils are forced to agree Section 106s and assert that it isn’t really pooling when everyone knows that it is. These dodges, skirt-arounds and boundary stretches are not just the tools of cash strapped Councils. Even Inspectors and the Courts have been inconsistent in their approach towards the legitimacy of infrastructure contributions and tariff based contributions contained in Section 106 Agreements. The result is that CIL is now a confused mess that does not provide Councils or developers with certainty and seemingly (because of its rather patchwork implementation) does not generate the cash for infrastructure either. It does seem that rather than channel funds towards appropriate infrastructure, this particular levy (sic) has suffered a terminal breach.



  • Development Management Changes #2 -Validation and amendments

  • Following the recent changes to the Development Management system in Wales, there is now a requirement for LPA’s to notify applicants of any reasons why their application is considered invalid. The applicant can appeal against this non-validation of an application to Welsh Government (via PINS). The appeal must be submitted within 2 weeks of the notice, and Welsh Government will have a period of 21 days to reach determination. If allowed, the application must be validated with the start date backdated to the date of the notice. If refused, the additional information initially requested by the LPA must be provided. Although a welcome stick to incentivise LPA’s to process applications quickly, and introduce clear validation checklists, will this recourse to appeal ever be an option worth pursuing? The LPA retains the application fee throughout the appeal process, and based on recent experience the Inspectorate will surely struggle to cope with further appeal submissions to validate and determine appeals.

    A further change is that any amendments to a proposal submitted post-submission, and pre-determination will generate a fee payable to the LPA of £190 and an automatic extension of time for determination by 4 weeks. This applies, even if re-consultation of the proposal is not required as a result of the change. So whilst the evolution of a proposal to meet requirements is encouraged pre-application, the impacts of any changes, however minor, post submission result in further delay and expense to the applicant and slower decision making timetables. This seems somewhat contrary to the objectives that the Sir Humphreys in Cardiff set out for these changes.

    An additional requirement will be for developers to notify the LPA that they intend to start development on site. This will apply to all decision notices issued after 16 March 2016, and will require the developer to submit the attached notification to the LPA and display a copy on site for the time that the development is under construction. This will provide the LPA with the opportunity to confirm that any relevant pre-commencement conditions are discharged and planning obligations complied with. 

    These changes seem to deliver little more than additional red tape, cost and delay and it will be interesting to see what effect they have on the planning system in Wales.



  • Development management changes in Wales #1 - Time to make an exhibition of yourselves!

  • On 16th March a range of significant changes to development management procedures come into force in Wales.   These form one component of a wider raft of changes introduced by the Welsh Government in the Planning Wales Act (2015), all with the apparent overarching objective of encouraging growth in Wales, through delivery of a more effective planning system. Over the next few weeks we will be giving our take on the changes that the Act will bring about. 

     The first key change that will impact upon developers in Wales, and the subject of today's blog post,  are those in relation to pre-application consultation.  There is a clear emphasis from the Welsh Government that front loading applications is the way it sees planning decisions being made more quickly and efficiently.  

     From 16th March there will be a standard statutory process and fee structure for the provision of pre-application advice by Councils, requiring them to provide formal pre-app advice and creating a national fee structure (up to £1,000 for large, major development).   A written response to all enquiries must be provided within 21 days, unless an extension of time is agreed.   A good start, then.  Yes, there will undoubtedly be issues about actually getting a response from a Council within 21 days but it will at least curb the money grabbing pre-application fees that some Councils have tried to impose in recent months.  Key of course is the quality of the pre-application advice, and experience of that has been rather mixed.  Will applicants get value for money?  Only time will tell.

    A further addition to the red tape of planning in Wales is the requirement that, from 1 August 2016, all outline and full applications for major development (10 dwelling plus, over 1,000 sq m of other buildings) will have to be accompanied by the Pre-Application Consultation Report in order to be validated.

    This report will need to demonstrate that an applicants has met statutory pre-application consultation requirements, which essentially comprises putting up a site notice for 28 days prior to submission and making the draft application available for review.

    A site notice must be put up to advertise the intention to submit a planning application, which seems eminently sensible.  However, it is notable that unlike other forms of notice, there is no obligation for the period of display of this notice period to be proximate to the actual date of submission.

    The more onerous and complicated requirement is that a copy of the draft application must be available for viewing online and at a publicly accessible location for a period of 28 days.  This just illustrates the lack of real world planning experience that seems to exist in the annals of Cathays Park.

    Unlike local planning authorities, most applicants rarely have a ‘base’ close to an application site available as a public venue.  Is it really to be expected that applicants rent space and employ staff for a month so that this requirement can be met?  One option is to specify a location where the pre-application documentation may be viewed online, such as a public library.  However, with many towns losing these facilities, and with many smaller towns never having them anyway, this seems a poor solution for much of rural Wales.  The same applies to the suggestion by Sir Humphrey that maybe the local bank could house an exhibition.  Finding a major bank outside of the big towns these days is nigh on impossible.

    Applicants must also write to the owners and occupiers of adjacent properties/land and consult community and specialist consultees, with a copy of the application also to be made available for them to comment on.  Statutory consultees will need to provide a substantive response in 21 days (and their response during determination of the application should not deviate from this.)  There is no indication however how private applicants, without the access to public address databases of Councils, will be able to determine the owners of unoccupied land.  Again, this is a Sir Humphrey-inspired idea that could bring real difficulties on the ground.

    No-one disputes that there benefits to undertaking consultation prior to submission of major applications.  Indeed that is why pre-application consultation is done already for most major applications at the moment, without the need for a poking stick from Sir Humphrey. The feedback received through pre-application with authorities and statutory consultees or local public exhibitions can be very helpful in forming a scheme that responds to local issues and concerns.

    One of the important aspects of current, non-statutory pre-application consultation is that applicants choose for the form of consultation that is most likely to be effective in conveying the essence of the scheme to those affected by it.  This means distilling technical issues and language into words that non-professionals can understand and having staff on hand at exhibitions to answer queries.

    The formal consultation requirements do not require applicants to explain their proposals or to make any effort to exhibit them in non-technical language.  In fact, the requirement is for applicants to make the draft application and technical reports available for inspection only.   This in practice adds little to helping communities and residents to understand the proposals and find answers to concerns.

    It also seems rather defeating the purpose to force consultation with a technical application pack that is ready for submission.  It leaves little room for change when a scheme is so advanced.  It is more of a fait accompli rather than a genuine consultation.

    A further twist is that, as has been seen with other legislation drafted by Sir Humphrey that the Order does not account for multiple proposals on adjacent sites that individually would fall below the threshold but together would exceed it.  So if you want to dodge the requirements, splitting a scheme into bite size chunks would seem to be the way to go.

    As with all the changes that WG seem to introduce in the planning arena – and there are many - the new consultation requirements have not been well advertised and it remains to be seen how aware and prepared the development sector is for these changes.  This assumes of course that there remains a development sector in Wales for major development after this new raft of red tape makes planning in Wales even more complex than across the border in England.  



  • Going our own way... but in what direction?

  • An e-mail from a planner in England enquiring about the rules in Wales in respect of permitted development has brought to the fore just how different the planning system operating presently in Wales now is from that operating in England. 

    While we all operate a 1APP system for application forms, the similarities seem to end there.  Fees are structured largely the same but are in differing amounts.  So a change of use application in Bristol is £385 but is £380 in Newport.  For the discharge of conditions it is £97 in Gloucester and £95 in Bridgend.

    Then there are the use classes.  While England has A3, A4 and A5 use classes to distinguish between certain types of food and drink uses, Wales has stuck with just the one.

    Permitted development rights?  If you want to convert an office to residential use, then in most places in England this needs no more than prior notification.  Not so in Wales.  The same goes for vacant agricultural buildings.

     Then there’s policy.  Wind turbines on a strategic scale?  Yes please, says Carl Sargent.  Not on your nelly, screams Amber Rudd.  What about fracking?  Well, the exact opposite, of course. 

     The “needs” test for new retail development?  That was, sensibly, abolished in England following research that highlighted how it protected incumbent out of centre retailers and bore no relationship with the effect on the ground of new retailing.  In Wales? Reinforced through recent proposed changes to retail guidance.

    The forthcoming changes to Development Management in Wales that come into effect on 16th March will widen the gulf still further, particularly for major development.  What changes do they hold?  A forthcoming blog article by Nia Russell will reveal all! 

    Unhelpfully, the Welsh Government aren’t the best at publicising the changes or providing a consolidated compendium of planning law and procedure.

    Luckily, there are still a few of us Wales based planning consultants who are keeping track!