The Mango Blog

An irreverent look at some of the hot topics in planning


All commentary is given in good faith but does not constitute advice!

For specific help on planning matters, please contact Mango.

  • Retail policy in Wales... moving forward to the 20th Century

  •  

    WG has recently held a consultation into proposed changes to Chapter 10 of Planning Policy Wales and Technical Advice Note 4, relating to retail development in Wales.

    In recent times the retail sector in Wales has all but stopped.  The number of retail schemes in Wales that have been cancelled or abandoned provides evidence of this. The financial crisis has had a significant effect on the appetite of investors generally towards new development, particularly when it is outside of the major cities. 

    The response in England has been to simplify the approach towards new retail development; to give local planning authorities greater independence as to how they support their centres whilst encouraging jobs and investment.  While some LPAs try and ignore it, there is a presumption in favour of sustainable economic development in England. [1]

    It comes therefore as a significant disappointment and concern that this review of Chapter 10, WG has not simplified the Guidance or made it more positive.  It is instead more complex, more prescriptive and, worryingly, gives few words of comfort to those wishing to invest in Wales. 

    Bluntly, it does feel that the Guidance is academic and bureaucratic in character with no grounding in or acknowledgment of, the practical, real world of retail development and investment.

    At a time when Wales desperately needs to show that it is open for business, this is a missed opportunity to put a sign in the Principality’s shop window.  Indeed by failing to present a simplified, more responsive and more commercially informed Guidance, this Draft Chapter 10 and associated Draft TAN4 has the potential to signal to investors that Wales is moving backwards, not forwards.  

    The issues that the consultation raises are numerous, but three are of particular concern are efficiency and competition, the need test and disaggregation.

    Efficiency and competition

    In terms of efficiency, innovation and competitiveness, the current version of PPW Chapter 10 sets as a key objective at 10.1.1 to “secure accessible, efficient, competitive and innovative retail provision for all the communities of Wales, in both urban and rural areas”.  

    This is, inexplicably, deleted from the Draft Chapter 10.  It is not clear why this has been done, and its removal sends an extremely negative message to investors as to the way Wales will respond to a dynamic retail market.

    Need test

    With regard to the need test, the Draft Chapter 10 now devotes almost a page of the Guidance to this, adding to, rather than reducing, the focus on this test as compared to the existing Guidance.

    It was recognised as long ago as the 2006 Barker Report into the Planning System commissioned by DCLG that a retail need test is not fit for purpose in a development management context.  In response to this report, the test was removed from the Guidance in England.

    Unfortunately, in more recent Guidance reviews Wales has missed the opportunity to remove this anachronistic and bureaucratic test.  It is therefore extremely concerning that in this latest Draft Chapter 10 and overhaul of TAN4, the need test appears to be given more, not less, weight.

    WG appears through the Draft Chapter 10 to support the retention of the test without question, without asking whether it is in fact necessary. 

    What does it achieve, in practice? The key objectives of town centres first policy is to protect existing centres from unacceptable impacts and to support investment in appropriate locations.  As can be seen in England under the NPPF, these two objectives are well addressed by impact and sequential tests.  The needs test set out in the Draft Chapter 10 adds nothing more.

    While maintaining the status quo and retaining the need test may be the easy option for WG, it is far from a benign test.  Indeed, retention of the need test it has a number of seriously negative effects.

    Firstly, it has the anti competitive effect of offering protection to existing out of centre retailing.  As Barker notes, it protects not only in-centre incumbents but out of centre ones too.   This has the effect of:

    • Restricting competition between out of centre retailers, distorting the dynamic of the retail sector. 
    • Restricting range and choice for consumers (although I note that this is no longer an objective of Chapter 10)
    • Where a capacity deficit is claimed, limiting investment in locations that, while not within a defined centre, may represent investment capable of supporting such a centre e.g. appropriate edge of centre sites.

    Secondly, it adds significantly to the costs of preparing a planning application for retail development.  In a commercial retail market where profit margins can be very low, this additional cost relative to England does little to support and encourage investment in the Principality.

    Thirdly, it adds to the cost of processing planning applications.  As Genecon highlight, LPAs in Wales do not generally have the technical skills to understand the intricacies of the highly academic quantitative need test, leading to the expense of the appointment of specialist consultants.

    The lack of understanding of the topic is well illustrated at Paragraph 5.2 of the Draft TAN4, where ‘qualitative’ is used to describe a ‘quantitative’ issue.  If WG doesn’t understand what it is dealing with, it does beg the question how it expects LPAs to. 

    The quantitative need test is in my experience a particularly flawed planning test.  Its basis lies not in the real world but an academic assessment of capacity.  It purports to determine “what the market needs” but is based on the use of benchmark trading levels and data that are not used by and have no bearing on the real life decisions of retail businesses.  In my experience, commercial decisions to seek representation in a town are never informed by the LPA assessment of capacity. The only people who consider these need assessments to have any bearing on requirements are professional planners.

    That this obsolescent test is retained and given even further weight in the draft Chapter 10 is likely to be extremely harmful to the realistic prospects of drawing appropriate and necessary retail investment into the Principality.

    Disaggregation

    The concept of requiring applicants to consider ‘disaggregating’ their proposals to fit on sequentially preferable sites is another concept that was considered and abandoned in England, as indeed it has also been in Scotland. 

    In consideration of this issue, in his judgment in Tesco Stores Limited v Dundee City Council [2012] UKSC 13 Lord Hope held at Paragraph 39:

    “Here too the context indicates that the issue of suitability is directed to the developer’s proposals, not some alternative scheme which might be suggested by the planning authority. I do not think that this is in the least surprising, as developments of this kind are generated by the developer’s assessment of the market that he seeks to serve. If they do not meet the sequential approach criteria, bearing in mind the need for flexibility and realism to which Lord Reed refers in Para 28, above, they will be rejected. But these criteria are designed for use in the real world in which developers wish to operate, not some artificial world in which they have no interest doing so.” (My underlining)

    The sensible approach is therefore to require flexibility to the application proposal within any sequential assessment, but not to the extent that it creates an artificial outcome.

    It is disappointing that in updating the Guidance WG has not taken the opportunity to reflect on this judgment (and subsequent decisions of the Courts in England & Wales) that are consistent with its common sense approach and to provide guidance on this matter that has a genuine grounding in the realities of commercial retail development.

    Mango has submitted representations to WG to encourage a more commercial and realistic approach to the application of retail policy.  We await its response with interest!



    [1] (National Planning Policy Framework Paragraphs 197 and 14).

     



  • So, what's the use ?

  • We planners like things to be orderly.  Forget shades of grey – the majority of planners (and particularly those in local authorities) seem to see things as black or white.  To such people, then, the use classes order (UCO) is veritable manna from Heaven.  With one stroke, just about any activity can be classified into a simple series of categories, from where policy judgments can be made about the acceptability of said use. 

    An A3 take away use in a key shopping (A1) parade?  That’ll be in conflict with the policy to protect town centre frontages, then.  An A1 foodstore in an industrial estate zoned for B1, B2 & B8 uses?  That’ll undermine employment land supply and be contrary to employment policies.

    It sounds straightforward and logical, but alas as time has moved on, the use classes order in Wales has not kept up with those activities people want to undertake. 

    Trade counters are now a key element, and some would say critical element, of modern industrial estates yet often do not fit squarely into the B8 use class.  Since the change in the licencing laws, many pubs have evolved into drinking establishments with a dance floor.  It is left to fact and degree to determine at what point such a use becomes a nightclub or a mixed use.  These are just illustrations of where the UCO has failed to keep up with the modern Wales.

    In a pragmatic world, the application of sensible judgment to the slightly antiquated UCO ought not to present any problems.  After all, national guidance in Wales is now underscored by the objective that economic development ought to be supported, even if it means flexing a bit on other considerations.

    It is disappointing then that too many Welsh authorities continue to blindly apply the policies of their development plan to specific use classes, regardless both of national  guidance and the reality of the circumstances before them.

    Yes, that shop unit may be in an established parade, but it has been vacant for three years, detracts from the character and appearance of the area, costs the landlord empty rates and creates no local employment.  Is a café in such circumstances really something to be resisted?

    That industrial estate may be identified for traditional employment uses but isn’t zoning an area for employment all about the jobs, at the end of the day?  It doesn’t take a genius to see that major new industrial and warehousing investment in the Principality comes along about as frequently as Halley’s Comet, so perhaps the jobs arising from a supermarket ought to be given some weight in the planning balance?

    The current consultation on the new TAN for economic development in Wales presents an opportunity for the Welsh Government to underscore the need for a pragmatic approach towards use classes where jobs and investment are at stake.  More fundamentally, however, the Planning Bill presents a real opportunity to provide a use classes system in Wales that reflects modern day land uses.

    So will WAG show us that it is committed towards a flexible and responsive planning system that meets the needs of today?  If it does not, then it surely it ought to be classified as sui generis.  Of no particular use.



  • Let's hide.. It's The Bill...

  • The First Minister for Wales, Carwyn Jones AM has announced that the Planning Reform Bill will be published before the summer of 2014.

    The announcement was brief:

    “It will deliver a step change in our planning reform agenda and build on the established planning system. It will do this by setting out new roles and responsibilities for Welsh Ministers, local authorities, developers and communities.”

    Even this brief review of what is in store raises some eyebrows. There was a hope and expectation amongst many in the profession that Wales was going to have a completely new system that responded to Welsh issues and was not burdened by some of the cumbersome elements of the existing system. That the bill will “build upon” the established system suggests that it will be far less innovative and may simply be more cumbersome,not less. It is also a concern that the focus on new responsibilities implies even more red tape, not less.

    All in all, then, not a particularly illuminating or encouraging announcement. We must however give the First Minister the benefit of the doubt for the moment. There will be a White Paper sometime in the next six months, and that will be the true test of whether the Welsh Government is serious about change or just serious about being seen to be serious.

    Is this view too cynical? Judging by the other key ‘planning’ related legislation programmed for the coming year, there is perhaps some justification. The First Minister also announced yesterday that the Sustainability Bill was to be renamed. He said:

    “During this consideration it became apparent that the Government needed to better communicate the purpose of the Bill - calling it the Sustainable Development Bill did not provide that clarity of purpose. As a result, the working title for this legislation will now be the Future Generations Bill. “

    Only the bureaucrats in Welsh Government could see this as providing any form of clarity!



  • Is sewage infrastructure blocking the flow of new housing delivery?

  • The pro-development approach of the NPPF has helped to bring about rapid new growth in housing development in some parts of England. This resurgence is involving sites, more often than not, in locations that are not allocated for housing, or indeed any development.

    This can, in some places, put new pressures on infrastructure and the planning system has its ways and means, through CIL (for the moment!) and Section 106 agreements, to address these impacts.

    One area of infrastructure untouched by such measures, however, is the local sewage network.

    Section 106 of the Water Industry Act 1991 places a duty on water authorities to accept new connections to their sewage systems. Their ability to reject such connections is limited to very specific circumstances, such as where the connecting pipe does not meet the requisite standards.

    The practical effect of this is therefore that, on payment of a relatively low fixed fee, a developer may connect to a mains sewer regardless of whether the sewer system has the capacity to accommodate the additional flows.

    The water authority therefore has no means of stopping the system becoming overloaded. Of course, if it does get overloaded and foul water escapes from the sewage system, the water authority is liable of a criminal offence under Section 85 of the 1991 Act and European law.

    The duty to make sure that the system can cope with the demands placed upon it falls squarely on the water authority.

    Section 94 of the 1991 Act requires water authorities to provide, improve and extend the system of public sewers so as to ensure that the area is effectually drained.

    Unless drainage works are required to serve a single development alone (rather than, say, improvement of existing mains infrastructure) the cost of such improvement works falls on the water authority itself.

    Given that this almost certainly involves new infrastructure and considerable spending, forward planning of requirements is essential.

    In this regard, the development plan identifies anticipated housing growth and locations and the SHLAA will give some clear indication of likely housing pressures for the future. We are told that the water authorities take all of these into account in their infrastructure plans - so if housing is in the planning pipeline, then there should be the pipelines to accommodate it.

    The housing growth that we are seeing at the moment is however, to a significant extent, not in locations anticipated by development plans and so in many places the infrastructure plans are inadequate or out of sync with actual development.

    Insofar as the water authorities have no real powers themselves to stop or delay development, the planning system has, in some locations, stepped in to assist. This is typically done through Grampian conditions that require there to be sewage capacity to be demonstrated before new houses are occupied.

    Eminently sensible, one might say. Except of course that the effect of such a condition is in all too many cases, a ransom position in the favour of the water authority.

    They are described as “authorities” but the reality is of course that they are private companies with a duty to make profits for their own shareholders. They have no real interest in delivering new housing or the jobs that it brings or any particular desire to be forced into building new, un-forecast sewage infrastructure that will impact on forecast profit levels. They cannot be criticised for that – it is the logical effect of their privatisation all those years ago.

    What is more concerning is that the water authorities have become increasingly aware of the position of power they hold in respect of large planning applications and seem to be seeing this as a lucrative new revenue stream.

    Knowing that a Grampian condition is a real problem for housing developers, most water authorities now charge fees of several hundred pounds for telling you what existing capacity levels are at. One would really have thought they would have such data at the tips of their fingers.

    If that is not bad enough, if it is determined that there is a shortfall in capacity, they will charge many thousands of pounds to scope out what works are required to address it.

    In such cases the water authorities know that developers won´t and can´t just take a Grampian condition and sit and wait for them to undertake the necessary improvements to the sewage system. Instead, a simple choice is presented – the developer pays to get the improvements early, or the development can´t go ahead.

    At no stage does the duty under Section 94 of the Act, for the water authorities themselves to meet the local drainage needs, seem to come into play.

    To some, this is a pragmatic way of bringing forward new infrastructure at the cost of those who will benefit from it. To others, it looks like pure and simple cash generation by greedy water companies.

    Whatever your point of view, this disconnect between development aspirations and certainty of mains sewage infrastructure presents a major blockage to the actual delivery of much needed housing.
    Some local planning authorities have shown their mettle by refusing to impose conditions on new development requiring sewage capacity to be demonstrated.

    The stark choice for the water authority in such circumstances is to bring forward the necessary improvements or face overflow problems and the fines that will result. However, that local authorities should have to risk sewage overflow to get the water authorities to act is not exactly a vote winner with the electorate.

    It is clear that government has to take a look at this and find a more workable, efficient and cost effective means of delivering the sewage infrastructure required for this new wave of development that it is encouraging. Sewage is not something that one can brush under the carpet, Mr Pickles.



  • Development Plans - Is it time they joined the dodo?

  • The development plan has been the cornerstone of planning decisions for as long as most people can remember. As students we were always taught that the development plan and planning decisions were inseparable – a mantra reinforced by successive changes to legislation that have placed development plans as the starting point for all decisions.

    Yet in recent years the development plan seems in many places to have lost its place on the desk of development control officers. That's not to say that development plans have ever been a 'must read' for development control planners – in our experience, many planners outside of local plan departments have never really held much regard for the development plan. However, as development control officers have moved into a new era of development management, the disconnect has become more pronounced.

    The criticisms of development plans are well rehearsed, but still worth repeating. Despite protestations from the Clear English society, most plans remain woolly, cut and paste jobs of badly worded national guidance but with inferior grammar. Not current national guidance, of course. As development plans take an unfeasibly long time to prepare they are typically inconsistent with prevailing national guidance within weeks of being published.

    The strength of development plans ought to be in providing a clear steer on local development. However, all too often the assessments of employment land, retail need and housing numbers upon which they are based are woefully out of date. Even when they are not, they often display a dazzling ignorance of the real world. Almost every development plan zones vast areas of land for inward industrial investment despite the fact thateven our indigenous manufacturing is on the wane. Virtually no development planin the country identifies areas for trade counters and car garages even though they form a significant part of our traditional industrial areas. Large sites continue to be allocated for bulky goods retailing when anyone in the industry will tell you that in many regions of the UK there is now significant oversupply of space for such activities.

    The lack of commerciality indevelopment plans and in some development plan departments is truly astounding. Indeed, the only commerciality that seems to stray into the ivory towers of local plan departments these days seems to be where local authority land is concerned. That the local authority owns a site apparently makes it ideal for all sorts of valuable development.

    So where does the effort in preparing local plans go? I am sure that there are some officers working incredibly hard behind the scenes to put these documents together. However, one really has to question the balance of effort expended between the content and the branding, inane photographs and translating the index into multifarious languages. While there has always been a question mark over the realism of development plans, prior to the 2004 Planning and Compensation Act there was at least the opportunity to bring areality check to the plans through cross examination of local plan officers and objectors at local plan inquiries.

    The fear of having to defend policies at inquiry against the onslaught of a rabid QC was a sure-fire incentive to make sure that the policies and allocations of a plan were written with a semblance of sense. It was bloody and painful but the end result was a plan that, at least for the few months following its adoption, could be said to be reasonably realistic. If the Local Plan inquiry was Schwarzenegger then the LDF / LDP process that came in following the 2004 Act was Mr Muscle. On a bad day.

    The Local Plan system was a no holds barred investigation into whether the draft plan was the best that could be achieved. The LDF system (Yes I know it has been renamed, but it is still the LDF to many..) starts with the assumption that the draft plan is the best that can be achieved and challenges objectors to prove that it isn't "sound". Pure Sir Humphrey. With some limited exceptions, the choice for the Inspector is accept the plan, kick part of it out or kick it all out.

    In other words, the Inspector's role is now not to facilitate delivery of the best plan for an areabut to test whether the plan is bad enough to be binned. In my experience of the'new' system Inspectors and objectors do have a fair stab at scrutinising the local planning authority's case. It is however a poke with a tickling stick rather than the cleaving of the broadsword of the previous system.

    The result is that many of the plans coming through the system are not a sound platform for future development but glossy brochures of meaningless, anodyne drivel that is out of date the day it is published and woefully out of touch with either what business and developers or local people want and need. The yawning reality gap leftby development plans is now being filled, in England, by neighbourhood plans. Despite the requirement that a neighbourhood plan complies with the development plan for an area, in those areas where they are being progressed you would be forgiven for thinking that they are designed to replace it.

    It seems then that the development plan in its current form is an endangered species – and while development plans officers remain in their ivory towers oblivious to the real world around them, it is not a species that many people outside of local plans departments are particularly keen to protect. Unless something is done quickly to make the development plan system up to date, relevant and realistic, then it is surely headed the way of the dodo.