The ODPM published a draft revised circular on planning obligations for consultation. Comments were sought by 25th January 2005. This was anticipated, but the story is on-going and tortuous. (The link is to a pdf document that can be downloaded from www.odpm.gov.uk.)
Sections 106, 106A and 106B of the 1990 Act presently deal with the creation, modification and discharge of planning obligations, and DOE Circular 1/97 currently sets out policy and guidance on their use. Section 120 and the Ninth Schedule of the 2004 Act make provision for the repeal of these sections. Additionally, sections 46 to 48 of the 2004 Act empower the Secretary of State to make regulations governing planning contributions. (It has to be said that the provisions themselves make it difficult to understand what they are intended to achieve.) That is the statutory background.
It was announced early in 2004 that regulations dealing with planning contributions would not be made until 2006. The waters were then muddied by the minister announcing that the government had accepted the recommendation in the Barker Report (The Barker Review of Housing Supply) that a national planning gain supplement should be introduced. This would be tied to the grant of planning permission, with the intention that part of the landowners gains would contribute to wider benefits for the community including the provision of social housing. The Chancellor of the Exchequer has said that he will make a decision on this by the end of 2005. We may therefore find that some new form of betterment levy will be introduced.
In the meantime, the government has decided to press ahead with identifying and implementing changes to the present regime for negotiated planning obligations by revising the advice contained in DOE Circular 1/97; hence the consultation paper. It has also said that it will continue to work up proposals in parallel for an optional planning charge, something mooted earlier.
The introduction to the consultation document states that the governments aim is to create a system that is faster, more transparent and accountable and which gives greater clarity and certainty to all concerned. (It hints at more major reforms following on from the Barker Report.)
It also highlights what might be described as a discrepancy between planning policy and law. DOE Circular 1/97 advises that planning obligations should only be sought where they are (a) necessary (b) relevant to planning (c) directly related to the proposed development (d) fairly and reasonably related in scale and kind to the proposed development and (e) reasonable in all other respects. Against that, the House of Lords held in Tesco in 1995 that a local planning authority would not be acting unlawfully by taking into account a planning obligation that did not comply with the Secretary of States policy tests provided that it was capable of being a material consideration. In order to qualify as such, the planning obligation simply required to have some connection with the development that was more than de minimis. As a consequence, the policy tests have therefore only been relevant in the case of developments that came under the scrutiny of the Secretary of State as a result of a planning appeal or a call-in. Many local planning authorities and developers have, for instance, simply ignored the necessary requirement.
These are the more important reforms proposed.
- The policy tests are to be retained, but the necessary requirement is clarified so that the planning obligation must be necessary in order to make the development acceptable in planning terms. The government does not view section 106 of the 1990 Act as the right mechanism for the capture of planning gain. It should be seen only as an impact mitigation or positive planning measure.
- The use of planning obligations to secure an element of affordable housing is clarified, and the policy is separated out from the policies governing impact mitigation and compensation.
- The use of formulae and standard charges, where they are designed in accordance with the policies set out elsewhere in the circular, is now to be encouraged to speed up negotiations and to give greater certainty to developers.
- Guidance is given on the use of standard documentation in order to speed up the process.
- The use of independent expert third parties (for instance, acting as mediator) in the negotiation process is addressed for the first time.
- Greater use of unilateral undertakings is encouraged.
- There is new guidance on the monitoring of the implementation of planning obligations.
The final version of the new circular will have published alongside it a separate good practice guidance to supplement it.
Article: For better and for worse by Martin Edwards and John Martin Planning obligations. (Estates Gazette, 11 December 2004, p 82).
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