New fruit in the planning basket for commercial developers

Government initiatives for nudging investment development and housing towards delivery have thrown up a menu of interesting new options for councils and developers to get their heads (or their mouths) around.

Can you stick with me for 1400 words while I chew these over and ponder a more local solution?

Last week’s Waterfront seminar on the development consents order (DCO) regime for large business and commercial development was helpful for analysing the pros and cons of using the new option from the point of view of the applicant.

But what what about  from the perspective of the local authority and the community?  Can we use this knowledge to ” incentivise” commercial developers to stay within the local authority decision making world?  I am thinking local development orders – but on a bigger more ambitious scale than  those tepid examples created to meet the  rules for Enterprise zone. Something more like what might be needed to deliver the new initiative for housing delivery on brownfield sites?

For those who, like me (until last week), have been aware of the NCO option but hadn’t given much thought to the detail,  I will start with a  bit (very summarised because this is a blog not a briefing) of background about the NCO process.

What developments are affected?

Large business and commercial development in this case do have some restrictions – no dwellings, no retail led schemes, no working of peat, coal oil or gas.  So think offices, tourism, sport,  leisure, conference centres, research and development, warehousing and logistics,  and working of aggregates and minerals.  There are tests as to size (and the thresholds are surprisingly low) but the development has to be shown to have national significance – which may include economic impact, straddling more that one administrative boundary or being connected with an infrastructure project that comes within the NSIP regime.  And if it’s in London – the Mayor has to agree.

What is the regime?

If  accepted for the DCO process (application to the Secretary of State), then a proposal will follow a similar process to the NSIP regime.  The applicant will side step the application to the local authority for planning permission and instead have his/her proposal examined by an “examining authority” set up by the Planning Inspectorate; the final decision by the SoS. The applicant drafts their own Development Consent Order  instead of awaiting a decision letter from the LPA, and also picks up compulsory purchase order rights rather than having to rely on the Local Authority to aid them in the site acquisition (albeit still subject to the tests).  There is also an opportunity to roll up other (but not all) regulatory consents in the same process.

But there is a fixed process, with the accelerated project management plan applying equal pressure to  the applicant, the decision makers and the other stakeholders.

The main stages in the process are: apply to the Secretary of State to come within the scheme, acceptance, pre-application, submission,  pre-examination (including a representation period), examination, recommendation to the Secretary of State, decision.

Worth noting that whilst for the NSIP process the policy context is largely given by the national infrastructure policy statements, for business and commercial developments, the policy context is the NPPF and the Development plan – just as it is for planning applications.

The advantages from the Developer’s perspective?

  • The chance to draft your own development consent order  – meaning that you have the flexibility to compile all aspects in a single view and enough powers to set out a process to, for example, deal with discharging conditions or delivering infrastructure esp transport.
  • The single consent regime (mostly) allows for all interests to be considered /engaged at once.
  • The fixed timetable  – once you are in the system you know you will have a consent in 12 months.
  • Unravelling issues caused by x boundary issues.
  • A regime that is deliberately positive (e.g. alternatives can be applied for and  considered  and some very positive comments about the helpfulness and solution building attitude of the PINS pre-application team).

The disadvantages:

  • It’s relatively expensive – examination fees could be up to £300K if a large team is required ( max planning application fee £250K).
  • Once you’ve applied to enter the DCO system, it looks as if it will be difficult to change to the application process.
  • You don’t get to build relationships with the local authority and you don’t get to test out acceptability with the decision makers in the way that members’ involvement in the planning process can give.
  • The processes at pre-app especially are inflexible – problems if you have overlooked a requirement.
  • Some flexibility is lost by not being able to substitute plans during the consideration.
  • The timetable is fixed – but in some instances getting planning permission  could still be quicker – especially if the site is allocated.

This analysis makes a subtle change to the conventional wisdom of ‘certainty’ and ‘speed’ as the  key to the developers’ wish list.

Looking at the lists of pros and cons, it seems to me that  “time” cuts both ways and that what is desired is simply  to not have the process go on longer than it needs to – transparency in relation to the project management.

Certainty about having most of the relevant consents considered at once  is an understandable advantage.  But there is a expensive potential  trade-off  in not having the chance to get into the mind of the decision makers, meaning that a developer will have to spend an awful lot before he/she gain much sense of certainty.

But what seems to be the biggest attraction for the DCO option is empowerment – being able to influence the form of the consent to develop in such a way that the practical needs of implementation are taken properly into account.  gaining active CPO powers for site assembly.

What are the pros and cons  from the perspective of the local authority and the community?

The cynics will say that the pros of the DCO process include the opportunity to blame someone else for an locally unpopular decision.

But the disadvantage is much costlier for both the disenfranchised council and the community. Its much harder to get the needs of the community threaded into a development if you are simply one of a number of stakeholders.

Then, what can we learn from the NSIP regime to retain that local ability to guide and influence development?

Getting an up to date local plan in place has to be the first stop  (no surprise there).  If one of the attractions of NSIP is that the policy background is clearer by virtue of the national infrastructure policy statements, then having clear up to date policies that conform to the NPPF is a huge step towards greater certainty.

Having council members involved in pre-application discussions gives insight into the decision makers mind.

The LPA taking the role of facilitator to bring other stakeholders into pre-application discussions advances the single discussion if not providing a single consent.

But what about this empowerment of the developer?

A local development order (LDO) could be created through a collaborative approach  involving the applicant; the statutory consultees, the upper and lower tier councils  and the community.

  • All parties would have a contribution to creating a consent framework that would provide reassurance for the community and certainty for the developer.
  • Good project management of the LDO creation would secure timeliness and input appropriate levels of resource to get the job done (probably provided the developer contributes to this).
  • A planning performance agreement (PPA) could provide the mechanisms for discharging conditions or granting subsequent consents as part of a seamless process.

There are now a few strong examples of councils preparing ambitious LDOs.  Look at Thurrock or Vale of White Horse as two of these examples.  Those councils have been prepared to take a much more proactive approach to encourage developments by providing certainty.  The developer is released from the burden of the council wanting to consider every application on its merits from scratch.  The developer is trusted to meet the requirements and get on with delivery. With appropriate liaison, the community can be involved from LDO preparation to scheme implementation.

This is not going to be the cheap option.  But  if developers are prepared to pay for the privilege of wrapping up certainty and the flexibility in a single package this could certainly be a worthwhile addition to the planning basket, along with the DCO option.