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RTPI response to the Autumn Statement

05 December 2013

In what was in essence a budget in all but name, the Chancellor announced a swathe of announcements covering job creation, taxes, growth, infrastructure, business rates, fuel duty, local government, and housing. Both yesterday’s National Infrastructure Plan and today’s Autumn Statement contain pro-growth measures; Ministers regard them as attempts to make the current planning system faster and more efficient in certain areas.

Cath Ranson, Vice President of the RTPI, said: “We welcome the emphasis on the importance of local plan-making in the National Infrastructure Plan and on ensuring that planning makes a maximum contribution to growth, infrastructure, and housing supply, including affordable housing. We also welcome the UK Government’s announcements on the renewal of high streets through supporting small businesses.

There is a level of detail that has not yet been announced on a range of the proposals which members in local government will be keen to know about, such as how the apparent link between no new cuts to local authority budgets and the freeze in council tax will work and the business rate cap.

We continue to be concerned about the pressures facing local authority planning departments, and hence their ability to maximise the benefits of planning in relation to these issues.”

What planners need to know about the Autumn Statement:

Planning

  • Local Plans – The government will consult on measures to improve plan making, including a statutory requirement to put a Local Plan in place.
  • Permitted development – The government will consult on liberalising change of use from retail to restaurant or assembly and leisure uses, and liberalising planning restrictions on mezzanine floors in retail premises, where this will support town centres.
  • Planning conditions – The government will legislate to treat planning conditions as approved where a planning authority has failed to discharge a planning condition on time. The government will consult on legislative measures to strengthen the requirement for planning authorities to justify any conditions that must be discharged before building can start.
  • Statutory consultees – The government will consult on proposals to reduce the number of applications where unnecessary statutory consultations occur and pilot a single point of contact for cases where conflicting advice is provided by key statutory consultees.
  • Planning authority performance – The government will consult on increasing the threshold for designation under the Growth and Infrastructure Act from 30% to 40% of decisions made on time.
  • Section 106 contributions – The government will consult on a new 10 unit threshold for section 106 affordable housing contributions to reduce costs for smaller builders.
  • New Homes Bonus – The government will consult on measures to improve further the incentive of the New Homes Bonus, in particular withholding payments where local authorities have objected to development, and planning approvals are granted on appeal.
  • Development Benefits – The government wants to ensure that households benefit from development in their local area. Building on the measures we have already put in place at the local authority and community level (including the neighbourhood funding element of the Community Infrastructure Levy and the New Homes Bonus), the government will work with industry, local authorities and other interested parties to develop a pilot for passing a share of the benefits of development directly to individual households.
  • Allowing developers to apply directly to the Department for Communities and Local Government (DCLG) where a planning authority makes fewer than 40% of its decisions on time.
  • Consulting on proposals to reduce the number of applications where unnecessary statutory consultations occur and piloting a single point of contact for cases where conflicting advice is provided.
  • The government will also launch a review into the role local authorities can play in supporting overall housing supply.
  • The government will increase the funding available for new affordable homes, by increasing local authority Housing Revenue Account borrowing limits by £150 million in 2015-16 and £150 million in 2016-17, allocated on a competitive basis, and from the sale of vacant high-value social housing.

Pertaining to the section 106 agreements, the RTPI will look at the detail of this measure once more information is made available, and the effect on the delivery of small sites and lower cost homes.

On planning conditions, while there is no direct data to suggest that lengthy requirements or delays in approval is a widespread problem, the RTPI would expect all its Members to exercise good practice in using conditions in a proportionate way.  Even small issues should be ironed out during the application process so that a condition requiring additional work is unnecessary, although this will not always be possible with some technical matters.  More could be done however and we would be willing to work with government on ways to improve practice, and ensure local authorities are properly resourced to enforce instances where development conditions are not met.

Regarding designation of underperformance, the Autumn Statement also contains a proposal to raise the current 30% threshold for councils to be designated to 40%.  It is early days given the first authority has just been designated.  We hope government continues to fund support organisations to work with authorities that may be in the danger zone, so that performance levels become more consistent allowing to continue local communities to continue to have a say on important development in their areas.

Local government

  • [In the context of reducing total departmental budgets by £3 billion] The Chancellor said: “The Barnett formula means that over the next two years, the budgets for Scotland, Northern Ireland and Wales will see a net increase.”
  • “We will not apply these additional savings to local government, because we expect them to freeze council tax next year.”

There is no detail in the Treasury documents, but we would presume this is unchanged from the 2013 Spending Round announcement, i.e. local authority core funding from Department of Communities and Local Government will decrease by £2.1 billion in 2015-16, a 10 per cent reduction in real terms, in addition to the 33 per cent reduction in real terms since 2010.

Housing

  • The Chancellor said: “And we are going to increase the Housing Revenue Account borrowing limit by £300 million.”
  • Local authority borrowing for housing (p.41 of the Autumn Statement).

Housing stock-owning local authorities operate within a housing revenue account (HRA) which places a nominal cash cap on their borrowing. This measure increases the cash cap by a total of £300 million (assuming that the full additional headroom of £150 million in 2015-16 and £150 million in 2016-17)  is taken up and is spent on new affordable housing in these years. There will be a competitive process for stock holding authorities to “bid” for part of the total £300 million increase, to fund new affordable rent housing.

The costing assumes that the full £300 million of additional headroom is taken up. The government will allocate this on the basis of value for money. It is expected that the best bids will include partnership working with housing associations or through joint ventures, a contribution of local authority land for new housing and use of receipts from sales of vacant high value stock. However, depending on the outcome of the bidding round, bids may not need to contain all of these elements to always be successful.

The RTPI welcomes the announcement of a £1billion fund to provide infrastructure to unlock large-scale housing sites, which goes some way to meeting one of the recommendations in our recent housing policy paper. It will next be crucial that the choosing of the sites is based on long-term strategic planning priorities, such as regional housing-need and connectivity.

Local Growth

The Autumn Statement announced a number of important local initiatives including:

  • The government is working with Glasgow City Council to support delivery of Glasgow’s vision for a City Deal which will help make Glasgow one of the fastest growing City Regions in the UK.
  • The government is committed to delivering with Greater Cambridge their proposals on Gain Share.
  • The government will explore options for kick starting the regeneration of some of the worst housing estates through repayable loans.
  • The government will therefore consult on options for a right to move for local authority tenants who want to move home for reasons related to employment.
  • The Local Growth Fund will be at least £2 billion every year of the next Parliament.

Infrastructure

  • The Chancellor reiterated the importance of infrastructure as a driver for the economy, highlighting the more important aspects of the National Infrastructure Plan, committed to pushing through new roads and railways; restated his commitment to fracking and new nuclear power stations.
  • Nationally Significant Infrastructure Project planning review – Alongside the National Infrastructure Plan (NIP 2013) the government has launched an overarching review of the Nationally Significant Infrastructure Planning Regime focusing on shortening the lengthy pre-application phase and further streamlining of the consenting process.
  • Nationally Significant Infrastructure Project planning fees – The government will freeze planning application fees for the Nationally Significant Infrastructure Planning (NSIP) regime for the remainder of this Parliament.
  • ‘Top 40’ planning applications – To support the delivery of ‘the Top 40’ infrastructure investments, the government will ensure, where possible, that these projects have the option to use the NSIP regime by having regard to the ‘Top 40’ designation when making considerations under section 35 of the Planning Act 2008.
  • National Networks National Policy Statement – Alongside NIP 2013 the government has published the National Networks National Policy Statement for consultation and parliamentary scrutiny.

See our response to the publication of the National Infrastructure Review. 

Fracking

  • Corporation tax: new pad allowance for shale gas (p.46 of the Autumn Statement).

This measure will incentivise the early development of the shale gas industry and other onshore oil and gas projects. It will introduce a new onshore allowance to reduce the amount of ring fence profits subject to the Supplementary Charge. The measure will be effective from 5 December 2013.

Business rates and High Streets

  • Support businesses to expand and create jobs by capping the Retail Prices Index increase in business rates to 2% in 2014-15 and extending the doubling of Small Business Rate Relief to April 2015.
  • Provide additional support to the retail sector through a business rates discount of up to £1,000 in 2014-15 and 2015-16 for retail properties (including pubs, cafes, restaurants and charity shops) with a rateable value of up to £50,000, and a 50% discount from business rates for new occupants of previously empty retail premises for 18 months.

We welcome government measures to support high streets including discounts for small shops and caps to business rates over the next two years.  New occupants of long term vacant premises will get a 50% discount.   In our view high streets are the backbone of successful local communities and planners continue to play an important role in promoting change and a diverse range of premises. Town centres should be the ‘one stop shop’  for the delivery of public services e.g. education, health, civic, or community facilities, alongside private business.

Other measures which may be of interest to members, particularly those running their own business:

  • a cap of a 2% increase in business rates in England in 2014-15.
  • doubling the Small Business Rate Relief for 12 months from 1 April 2014.
  • abolishing National Insurance contributions for under-21s earning below £813 per week.
  • Petrol taxes will stay frozen next year.

Planning as an export

UK Export Finance (UKEF) – the government will:

  • double UKEF’s maximum commitment limit to £50 billion
  • increase to $15 billion the limit on UKEF-guaranteed bond issuances to ensure that a broad range of competitive finance sources are available for UKEF backed exports
  • broaden the scope of the direct lending scheme and seek to expand the working capital scheme by making it available to more companies.
  • double the number of regionally based Export Finance Advisers to support more SME exporters.
  • adapt its guarantees so they are suitable for a wider range of potential investors in export credits.

The RTPI continues to work with UKTI on supporting planning as an export.

Judicial Review

  • Judicial Review reform – In early 2014 the government will establish a specialist planning court with set deadlines to accelerate the handling of cases, and take forward work to ensure that minor procedural claims are dealt with proportionally and allow appeals to ‘leapfrog’ directly to the Supreme Court in a wider range of circumstances.

The RTPI urged this earlier this year.