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The new Class E Use: Beware the dangers of swinging a scythe with blurred vision….

July 23rd, 2020

Sir Humphrey has been busy!  Dominic Cummings’ fingerprints are all over the latest change to the Use Classes Order (UCO) in England.  In one stroke, all uses previously considered “town centre” uses, so those within Use Classes A1, A2, A3 and B1 but also indoor sport, recreation and fitness, health facilities and creche facilities now fall within a single Use Class – Class E – from 1st September.

The UCO has been getting rather long in the tooth and has been blamed for at least some of the perceived problems of the decline of traditional high streets in some parts of the country.  Various tweaks to it, to allow temporary changes and remove some of the red tape from planning applications, have had perhaps limited effect; partly because some of the measures, such as Class V flexible permissions, are largely still not known and understood by the property sector.

The introduction of Class E is hailed as a turning point for town centres.  Announcing the changes, Robert Jenrick said “We are reforming the planning system and cutting out unnecessary bureaucracy to give small business owners the freedom they need to adapt and evolve, and to renew our town centres with new enterprises ….”

The reality is that this particular package of changes is, for the most part, not about town centres at all.

The problems of town centres run far deeper than planning use classes.  (One might question whether town centres are in fact a hangover of the past and something we should be protecting at all, but that is the subject of a different blog.). Excepting a notable few luddite authorities, most in our experience have supported securing the change of use vacant units to other town centre type uses.  Small tweaks to the current system have already given landlords greater flexibility to let vacant space.  There is no reason why further small tweaks, focused on town centres alone, would not have sufficed.  As a practice focusing on commercial development, fundamental changes to the UCO with regard to the high street has not been at the top of the “critical” list for institutional clients and landlords.

No, this fundamental change is not about town centres, it is about free market ideology.  Laissez-faire, if such blatantly europhile language is still permitted.  Its changes are not limited to town centre development but to all development.  Consequently, its effects will likely not be felt on the high streets of England so much as the retail parks, industrial estates and local centres of the suburbs.   

The most obvious implications are for retail policy.  This change pretty much bids farewell to the role of the “sequential approach” introduced in PPG6  some 24 years ago.  What value is there in a test that directs retail uses towards main town centre uses if, for example, a B1 starter unit on an industrial estate or any out of centre gym, creche or health centre may now be used by a retailer, service outlet or cafe operator; and bar any specific restrictions on use, would be free to sell any types of goods or offer any services that they wished.   

This also means  that the preference for any such development will be brownfield locations where there is no need to secure planning permission and therefore no risk of Councils imposing conditions limiting the freedom to move between uses within the broad church that is Class E.  The “impact” test could also fall by the wayside in such circumstances, removing what has been a stalwart of town centre protection for even longer than the sequential test.

Ironically, the only real existing “town centre use” typologies that do not get greater flexibility to relocate out of centre will be the current Classes A4 and A5, i.e. pubs and hot food takeways – facilities that for years many Councils have sought to keep out of the retail core.  These now fall outside any use class.

Perhaps, taking a generous view,  it is the Government’s plan that by opening wide the curtains for the commercial and retail development market and taking away the market distortions that a ‘town centre first” approach generates, it will support town centres by serving as a pinprick that lets some of the hot air out of inflated rents and rates, opening them up to businesses that could not otherwise go there.  Of course there are, in the mid/post-covid world, many smaller centres that are already fully deflated and need no further degassing.    Either way, retail agents must be reeling at the prospect of having to undertake rent reviews.

Read alongside other changes to the planning system, such as permitted development rights to change small retail units to residential, perhaps this is a complex and cunning plan to fundamentally change town centres from a retail focus to a genuine mix of uses, in the vision of Jane Jacobs.

There is however much that leads us to doubt that there is anything approaching a well thought out vision and strategy here, let alone a grand plan to revive town centres.  There is simply too little consideration of the mechanics of the changes.  It is a crude swinging of a scythe to the system.

Take the development plan, the starting point of all planning decisions.  What good is an existing development plan which specifies positively a Class A1 retail use in a “prime retail frontage” when that class no longer exists and any proposal for a shop could (once implemented for more than a colourful period) change to something far different?  Moreover, what would the Government’s response, or that of an Inspector at appeal, be to a Council that sought to continue the use class distinctions that the new Use Class is at pains to break down through the imposition of conditions?  There is little assistance to those at the sharp end of planning to understand how to marry the old system and the new.

The same applies to the application and interpretation of CIL.  In some locations the drafting of CIL documents is already so woolly that it isn’t clear whether a use is liable or not.  Some Councils have adopted the existing UCO to determine which uses are liable.  Will CIL that applies only to, say, an A1 use now be applicable to an application for a proposal defined simply as a  “Class E” use?

There are also more nuanced issues relating to uses that have fallen in, or fallen out of, existing uses.

Do we really need to wait for the Courts to decide on such important points?  Confusion and delay while we make sense of these significant and wide ranging changes is hardly going to speed up development in the short term. I am sure Wales, Scotland and Northern Ireland are watching with amused interest.

We have only scratched the surface of the issues that these changes will bring.  I am sure that legal minds will be giving us valuable insights over the next few weeks on the wider implications of these changes and perhaps the “vision” that Sir Dominic is trying to impart.  I hope his vision with this has improved since his drive to Barnard’s Castle.  Was that in an E-Class, perhaps?