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Thanks to Class E, do we now need Plan B?

The September 2020 changes to the Use Classes Order (“UCO”) as it applies to England took a scythe through the relatively settled system of managing uses.  It created a stripped-back system that, on its face at least, was intended to reduce the bureaucracy of changing the use of property or buildings, especially those in commercial use, with a particular focus on reinvigorating the use of vacant space in town centres.

The previous UCO regime has seen evolutionary rather than revolutionary change since 1997, with from revisions focused on housing delivery and the emergence of uses such as drive thrus, and there is no doubt that it needed some revision to keep up with the changing demands on our town centres . The covid crisis and associated economic impacts added, in the mind of Government, an urgency to the need for the shackles of the planning system to be released, especially on those uses creating and sustaining local employment.  

The 2020 UCO changes came into full effect on 1st August 2021 following a near year long transition process, so we have now had a reasonable period to see it come into effect. There is however no formal assessment of what it has delivered. One of the criticisms (by the Regulatory Policy Committee) of the policy when it was first proposed was that the Government had no plans to monitor its efficacy. Its February 2021 report described the Government’s impact assessment’s plans in this regard as “weak”. We are therefore reliant on anecdotal evidence as to how it has worked out.

Certainly, for those with existing buildings, in our experience there has been some theoretical easing of the bureaucracy associated with bringing space, especially in town centres, into beneficial use. Anecdotally, we have seen it become easier to release vacant (former) A1 units for restaurant uses where previously, antediluvian policies that sought to protect high streets from non A1 uses resulted often in a policy position that preferred landowners to keep it empty and undertake a pointless marketing exercise for two years, rather than to bring an unit into beneficial, job creating use.

For new floor space however, in our experience the picture has been less positive. Having included sub categories in Class E, we are seeing local authorities seeking to maintain control by imposing conditions limiting to a specific sub class. This has in many cases had the unfortunate effect of resulting in a use that is more restricted than might have been the case previously.

In our experience, few local authorities have embraced the open market spirit of the new Order, especially in town centres, perhaps seeing it as an assault on the controls they once held. This is perhaps unsurprising given that this change forms only part of a suite of changes that have already seen local authorities forced to relinquish control over building heights, changes to residential use and other free market ideological changes introduced by Westminster.

The picture has also been rather confused for transitional developments, i.e. those granted consent prior to the changes but not built or implemented at that time. This has resulted in anomalies such as, for example, where open B1 consent is granted but hasn’t been implemented. In the long term this is an unrestricted Class E consent. However, initially, that space cannot be used outside of Class E(g). While others have opined on this with legal authority, the general interpretation appears to be akin to the concept of “colourful implementation” introduced by the Kwik Save case many years ago i.e. you need to implemented the consented use properly before using any rights that come with that use.  There may be some sense in that, after all you ought not to be able to apply for one thing and build something else.  However it has simply added to the confusion that many in the property sector, especially beyond those in the planning and legal professions, have experienced with these new changes.

One of the most significant failings of the Order changes however has been that the Government has forgotten to consider fully the implications for permitted development rights that expressly linked to former use classes.

Take for example the right to change up to 500 sq m of employment space from B1 or B2 to B8 use, under Class I of the GPDO. Class B1 now does not exist and was expressly removed from Class I by Amendment Order (No.2) that sought to tidy up the GPDO to reflect the UCO changes. This took effect on 1st August 2021.

The probably unconsidered effect of this has been the loss of the flexibility to utilise small industrial units on an Industrial Estate for storage and warehousing now (for example, to meet the growing need for ‘last mile’ logistics) prima facie, requires permission where it did not previously.

Similarly, and evidently more on the radar of Government, is the right to change the other way, from B2 or B8 use classes to B1 (now Class E). The Government forgot about this in the Amendment Order and has belatedly realised that this could result in the loss of larger employment space to commercial uses, and so is planning on curbing such rights with further changes. While the intention is of course to stop the loss of B2 and B8 space to non-employment space, the potential effect is to further curb the historic flexibility to alternate between the traditional “B” class employment uses.

To add to the confusion, because the exercise of previous B1 to B8 permitted development rights did not require any documentation, we have already seen landowners with former B1 units who transitioned to B8 before the end of July 2021 being challenged to prove the lawfulness of that change. Again, the spirit of the changes has been ignored by such Councils reverting to a mode of development control rather than development facilitation.

It seems therefore that at the moment, the intention of cutting the shackles of existing floorspace in town centres has had a more mixed effect than perhaps intended. While it certainly has shaken up the High Street, it has not brought the same flexibility to new development and has had the unintended effect of imposing new and unhelpful restrictions on the flexible use of existing employment space between the traditional “B” classes.