The Levelling Up and Regeneration Bill proposes a number of changes to existing planning legislation including local government, planning, and compulsory purchase. It follows on from the Levelling up the United Kingdom White Paper, which earlier this year set out the Government’s objective to reverse geographical disparities between different parts of the United Kingdom by spreading opportunity across economic, social and environmental measures more equally.

In this insight, our planning law specialists explore some of the potential changes to the planning system (including Community Infrastructure Levy) and the impacts this could have on the delivery of new housing development schemes in the future.

What are the proposed changes?

The Bill contains eleven parts covering a variety of local government, planning and Compulsory Purchase changes. The relevant sections are as follows:

• Part 3 makes changes to planning in relation to data, development plans, heritage, decision-making and enforcement; and
• Part 4 details the non-negotiable Infrastructure Levy which enables local authorities to raise money from developments to regenerate their areas through infrastructure.

Some of the key changes affecting the housing sector

Increased certainty in the planning decisions and improvements to the application process

Once the Bill comes into force, planning decisions will need to be made in accordance with the development plan and national development management policies, unless material considerations strongly indicate otherwise.

The Bill will improve the planning application process for those regulating information requirements for planning applications (in particular in digital formats) to improve:

• consistency and accessibility and
• community engagement

as regulation-making powers to mandate consultation prior to planning applications being submitted will be permanent.

New provisions to allow minor variations in planning permission

The Bill proposes the introduction of a new section 73B in the Town and Country Planning Act, expanding the existing powers under sections 73 and 96A to vary or remove planning conditions attached to grants of planning permission and make non-material amendments to a planning permission, respectively.

Section 73B will offer a new route to vary an existing planning permission, allowing greater flexibility for making non-substantial changes to planning permissions (including to the descriptor of development and imposed conditions). Planning permission under this new power will only be permitted where the local planning authority is satisfied that its effect will not be substantially different from that of the existing permission.

In theory, this new application will enable changes to be made to planning permissions, which are not currently possible under the existing framework without the submission of multiple applications under different routes.

The introduction of a new Infrastructure Levy

This is the most widely anticipated change from a financial perspective, replacing the current system of securing developer contributions via the well-known section 106 agreement and the Community Infrastructure Levy (CIL) process.

The new mandatory Infrastructure Levy (IL) (note: Mayoral CIL will remain) sets out rates and thresholds in somewhat familiar ‘charging schedules' determined by local planning authorities; this is opposed to being set nationally as originally had been planned.

The levy will be charged based on the final gross development value of development, this is in contrast to CIL which is charged based on the floorspace of development when planning permission is granted.

This means rates will be tailored to local circumstances with the aim to deliver at least as much onsite affordable housing. With Government proposing a “Right to Require” affordable housing, albeit at this stage no further detail on what that actually entails.

Charging schedules must consider previous levels of affordable housing funded by developer contributions and either exceed or maintain those levels. Quite how this will work in practice is unclear as the detail will be set out in future regulations.

According to ministers, the regulation will consider how the levy should be applied to registered provider-led schemes and will outline a “retained role” for section 106 on some of the largest sites.

There is no mention of the all-important reliefs to IL that could be available and we await with interest to see if this will be applied in a similar way to CIL.

Other proposals to expect from the Infrastructure Levy:

• Developers will need to deliver some forms of infrastructure that are integral to the design and delivery of a site.
• The Bill places a new duty on local authorities to prepare infrastructure delivery strategies to outline how they intend to spend the levy.
• Homes England could be designated as a local planning authority and as a result will be able to operate as a Charging Authority for IL purposes.

Conclusion

The key changes which will affect the development of affordable housing going forward is of course the changes to s106 agreements and the new IL in place of CIL. Although it is yet to be seen  how affordable housing will be secured in practice, it is clear there is an intention for affordable housing to be secured and delivered - either  by maintaining or increasing the current amount. Additionally, the Government’s proposed ‘right to require’, will aim to “remove the role of negotiation in determining levels of on-site affordable housing”. We remain of the opinion the affordable housing will still need to be secured via some form of legal agreement (probably section 106), however at this stage it remains a wait and see process. We’ll keep you updated on any further changes as the Bill develops.

Capsticks’ view: Is this the end of section 106 agreements?

We have known for some time that the Government plans to overhaul the s106 and CIL process. While overtime the intentions have shifted, it seems clear that change is on the horizon, albeit slowly as the Bill passes through the Houses of Commons and Lords in order to obtain Royal Assent. Our planning team will stay by your side during this period of transition and continue to monitor the progress and changes to the Bill.

How Capsticks can help

Our housing and regeneration team, one of the largest in the country, advises on all types of development transactions from forward funded schemes, section 106 developments and stock rationalisations to plot sales and general asset management work. We are experts on all aspects of planning law including s106 agreements, CIL advice, planning appeals, Compulsory Purchase Orders and all general planning law matters.

If you have any queries around what's discussed in this article, and the impact on the affordable housing sector, please speak to Suzanne Smith or Jennifer Eng to find out more about how Capsticks can help.