Localism Act 2011

The Localism Act 2011 (“the Act”) received Royal Assent on 15th November when parts came straight into force.

Localism is a key Government policy, devolving power from Whitehall. In the case of planning, the aim is to give communities more say over the planning of their areas, helped by abolishing regional strategies and with them housing targets, and introducing neighbourhood planning. But the Government also has a growth agenda, and already the two are showing tensions.

This short guide highlights the main planning points of the Act. There are important practical implications for all involved in the development process.

The Localism Act contains many of the tools to make localism happen. Knowing how the Act works and being ready to use it is vital for planning and those working in it. For those who like a speed read, the big points to keep in mind (at the risk of cherry picking) are the need to participate in the preparation of neighbourhood plans and orders, the wider use of CIL and the new duty on applicants to react to the results of public consultation. But no-one should ignore the parallel policy changes – the battle over the powerful presumption in favour of sustainable development and the National Planning Policy Framework.

Regional strategies

The Government at last has its power to revoke these. However, as a result of the litigation in the past year it has agreed that it will first do a voluntary strategic environmental assessment. That is under way.The revocation, when it happens, will leave a policy gap, and the challenge will come when planning applications are submitted; what statistics should be used, what assumptions should be made, for example about housing need, growth and where it should be provided? It will be vital to come to rational and defensible conclusions if plans and planning applications are to be upheld. This is a challenge for applicants as much as for councils.

Neighbourhood Plans and Development Orders

Neighbourhood planning is central to the Government’s idea of localism and the Act allows communities to make neighbourhood development orders (“NDO”s) and to draw up neighbourhood development plans (“NDP”s) as set out below.

Parish councils and neighbourhood forums (“qualifying bodies”) are empowered to initiate the process for making NDOs. Local authorities must make an NDO if there is a referendum vote with more than half voting in favour (unless it would be incompatible with an EU obligation or the European Convention). The NDO can grant permission for any development (other than “excluded development”, for example minerals and nationally significant infrastructure projects) without the need for a planning application within all or part of the relevant neighbourhood.

Qualifying bodies are also entitled to propose Neighbourhood Development Plans. These allow local communities to draw up their own set of general policies in relation to the development and use of land in their neighbourhood. Once made, NDPs will become part of the development plan for an area. As with NDOs, if a majority has voted in favour of an NDP in a referendum, a local authority is under a duty to make it (subject to the same EU restrictions as for NDOs).

The process for drawing up an NDO or NDP is new. Councils in the pilot have £20,000 of Government funding to assist in obtaining professional advice, which they will need to spend wisely. The Government has invested a lot of political capital in the new neighbourhood planning arrangements and is likely to encourage councils and developers to use them. Developers and landowners who want to promote new development will need to engage with neighbourhood planning if they want to see their developments accepted.

Community right to build orders

These are a special type of NDO, again granting planning permission and again subject to a referendum. The main differences are that they can be made even where there is an NDO already; and the body seeking them will have been established for the express purpose of social, economic and environmental well-being. There will be special constitutional requirements. It looks as though the community organisations which have the right to obtain an order will have limits about to whom they can distribute profits, presumably to keep them community based.

Community Infrastructure Levy (CIL)

In November 2010, the Government finally confirmed that it would retain CIL but with reforms, now made by the Act.

CIL receipts no longer have to be spent entirely on infrastructure. Some of the money raised may be spent on other costs of supporting development of an area. The Act also allows for regulations to require local authorities to pass funds to other bodies. This is aimed at ensuring that a ‘meaningful proportion’ of receipts will be given to neighbourhoods where development happens, for them to decide on spending. This will have important implications and risks for developments with environmental impact assessment, if CIL is funding necessary infrastructure.

Secondly, the Act makes a number of changes to the charging schedule process and the role of the examiner. Local authorities now have a final say on whether to accept recommended modifications.

Public consultation requirements

The Act introduces a new requirement for public consultation by applicants before submitting their planning applications. The initial focus may be on major developments, but the precise details, including relevant thresholds, will be specified by secondary legislation following further consultation.

The aim is to give members of the public a genuine opportunity to influence the shape of development proposals before they are finalised. Developers will be required to take account of views expressed by the local community, and say how they have done that. This will front-load application costs. The anticipated pay-off is more widespread community acceptance, more high-quality development approvals, and fewer appeals. More cynical observers will recognise the potential for developers to design strategies to overcome community resistance without major compromises.

Local Finance considerations

The Act introduces what has been viewed by many as a deeply controversial provision, applying only to England, requiring that planning authorities to treat local finance considerations, so far as material to the application, as ‘material considerations’ when determining applications. In truth this merely re-states existing law with greater clarity.

In determining applications where the grant of approval would directly lead to the authority receiving grants, such as the New Homes Bonus, or other financial assistance, including CIL receipts, those matters will need to be factored into the overall balance of considerations.The change ought to be beneficial if it leads to greater transparency, including sharper evaluation of the likely benefits compared to the disadvantages of proposed development.

Enforcement provisions

The Government is getting tough on enforcement with two major new powers, among a number of detailed changes, following two recent cases which hit the headlines, including the house whose construction was concealed behind straw bales.

First, LPAs will be allowed to decline to determine a retrospective application if this would involve granting planning permission for development which is already the subject of an enforcement notice. There would be no right of appeal where the LPA has declined to determine a retrospective application under this section. There is a corresponding curtailment of the deemed appeal under ground (a) (that permission should be granted) if a planning application is already in.

But the real revolution comes with the change to limitation periods, previously four and ten years. In future, where a breach of planning control has been deliberately concealed, the LPA will be able to enforce outside those periods, within six months of becoming aware of the breach.

Among the many concerns here is that failure to report a breach to the LPA may constitute concealment. The original Bill clearly raised that, by stating that action included inaction. Although that statement has been removed, and enforcement must first be approved by the magistrates, the spectre remains. This is having an effect in practice already, as it makes it difficult to ignore old breaches of planning control when considering the lawful use of a property, or when purchasing property.

Careful due diligence and strict observance of planning control is going to be important while these provisions are on the statute book.

Abolition of the Infrastructure Planning Commission

The Infrastructure Planning Commission (“IPC”) is to be abolished and merged with the Planning Inspectorate, expected in April 2012. This allows the final decisions on national infrastructure projects to be taken by the Secretary of State rather than the (technocratic) IPC. In fact, the IPC will probably only have granted one development consent in its two year life. The amendments are detailed and we expect that only experience will show if this filigree work has been done comprehensively.

The original Act was very detailed (even restrictive) about who could participate in the process, whether making written representations or appearing at hearings.The relative openness of ordinary planning (where almost anybody could have their say) was replaced by more strict qualification requirements. There are amendments to this but they continue and even exacerbate the extent to which legal advice is needed just to tell if and how one has the right to participate.

Of particular note are changes to rules determining which neighbouring authorities have a right to participate (there have been difficulties on this) and changes to who is an “interested party. The simplest way to obtain participation rights is still to make a “relevant representation” at the outset. Inevitably, there are technical requirements for that. If one’s land is being compulsorily purchased, particular care is necessary to be able to exercise rights to object and be heard.

Assets of community value

Under the Act, ‘community groups’, meaning parish councils and voluntary/community bodies with a local connection, will be able to nominate important assets for protecting as ‘assets of community value’ by the local authority. Subject to certain exemptions, the asset must be one which furthers the social wellbeing or social interests of the local community and which can realistically continue to serve that purpose. The authority’s decision will be subject to internal review and appeal, and there are also compensation provisions.

An owner will not be able to sell, or grant certain types of lease, until a notice has been given to the local authority. This could limit property dealings for anything between 6 weeks and 6 months.

The specific legislative intention is to give community groups sufficient time to make a bid for buying the asset on the open market before it is disposed of, and listing will also be a ‘material consideration ‘for planning decisions.This is likely to be of direct relevance, for example, to local neighbourhoods wishing to prevent village shops and pubs from closure.

Further details are awaited in subsequent regulations which will define how this will work in practice.

Mayoral Development Corporations

The Mayor of London may designate any area of London as a Mayoral Development Corporation (“MDC”) subject to prescribed notification and publication procedures. The object of an MDC is to secure regeneration and it may do anything it considers “appropriate” for that purpose including land acquisition, compulsory purchase, and taking over a local authority’s planning functions. An MDC may also provide or facilitate the provision of infrastructure for an area.

The aim of the new legislation is to drive forward the regeneration of areas of strategic importance to London. Highest priority will be given to re-forming the Olympic Park Legacy Company as an MDC, to be named the “Olympic Park Legacy Corporation” (“OPLC”), in order to take over the regeneration of the Olympic Park and the surrounding land. The Mayor hopes to establish the new OPLC before 1 April 2012 and to transfer planning functions on 1 October 2012.

Other significant points

The duty to cooperate in drawing up development plans came into effect on Royal Assent. It is to “maximise the effectiveness” of development planning. It applies to other types of plans as well.

Local authorities are also given some flexibility, within limits, not to follow the report of the Independent Examination of the Local Development Framework.

Conclusion

The Localism Act 2011 fulfils the Conservative’s pre-election pledges to give power away from Whitehall. Planning has always been strongly driven by central government and there are obvious tensions and question marks over how localism is going to work out in this area. All involved in planning and development are going to have to grapple with the new law.

This is going to mean getting involved in the neighbourhood planning process, and in the setting-up of CIL, doing things like participating in the new independent examinations of these proposals. It will mean finding new evidence bases for development in the absence of regional strategies. It will mean greater public consultation, with the attendant risks of inconsistency.