Localism rules

With the Localism Act now in place, Ben Cook looks at the key new legal responsibilities and challenges the act presents to local authorities and developers.

Neighbourhood planning. Simon Ridgeway/UNP photo.
Neighbourhood planning. Simon Ridgeway/UNP photo.

In theory, the Localism Act ushers in a system that will give local people in England a lot more influence over what gets built in their neighbourhoods. But it would be wrong to think that means the role of local planning authorities has disappeared. Indeed, the act confers several new responsibilities on councils, the effective exercising of which will be critical if the act's ambitions are to be realised.

For example, town halls have been given a major role in neighbourhood planning, even though they will not themselves draw up the plans. Councils will have to decide if the community groups that apply to become neighbourhood forums, the official plan-making bodies, are sufficiently representative to merit the status. They will also be required to approve the plan's boundary, support the forum in its plan's preparation and organise both its examination and, if appropriate, a public vote on whether to take it forward. If the vote is positive, the local planning authority has a duty to adopt the plan. It will also, of course, continue to be responsible for producing the development plan that sets the strategic context for the neighbourhood plans

Similarly, the act imposes new duties on planning applicants. For example, developers face new requirements to consult local people prior to submitting large application.

In the following four pages, we have asked various legal experts to help us identify the key legal responsibilities and challenges the act presents to planning authorities and developers. Some believe it provides new openings for the different parties within the sector. Beverley Firth, head of planning at law firm Mills & Reeve, reports that some councils, although concerned by the manpower requirements of the new policies, see them as "an opportunity to set the agenda". Others see serious hurdles. The planning chief at one London law firm believes that "the whole concept of the act is not based on harsh reality". He argues that many parts of the act could open councils up to legal challenge. Either way, we hope these pages help readers prepare for the changes.

1. Facilitate neighbourhood planning

Councils' responsibility

Local authorities are now responsible for approving the neighbourhood forums that, in areas that don't have parish councils, will have the role of creating neighbourhood development plans, which set an area's planning policy, and neighbourhood development orders, which detail what types of development will be allowed in such an area without a need for planning permission.

Councils will receive applications from groups that want to become the neighbourhood forum for their area and must consider which, if any, to designate, keeping in mind that the act states that each forum's membership must represent "different sections of the community".

Local authorities will also have to ensure that each forum's plans do not conflict with other planning policies. In addition, they will have to make sure that the neighbourhood plans comply with the council's own core strategy, or, where that is not in place, national planning policy.

This will place a significant pressure on local authorities to develop core strategies, according to Michael Gallimore, partner at law firm Hogan Lovells, to avoid neighbourhood development plans and orders from becoming the main planning policy in an area. He says: "If there is no core strategy, what does a neighbourhood plan have to be compliant with? If there is no core strategy in place, local authorities will need to bring one forward quickly and efficiently."

What opportunities does this present for councils?

Neighbourhood planning could reduce instances of costly planning disputes by facilitating the kind of development that communities would accept, says Angus Walker, a partner at law firm Bircham Dyson Bell. This would benefit councils financially and could also assist them in delivering development they think is desirable, he says. After all, he says, if local residents have agreed to a neighbourhood plan through a referendum, there should be less political risk in approving any planning application that conforms with it, he says. "The thinking is that there will be fewer challenges because the plan will have come from the bottom up," he says.

What legal considerations should be taken into account when carrying out this responsibility

Any group of at least 21 people can apply to become a neighbourhood forum, but, ultimately, there can only be one forum for any given area. There is therefore plenty of scope for conflict. Simon Ricketts, a partner at law firm SJ Berwin, warns that councils' decisions on which group to endorse as a neighbourhood forum could be subject to legal challenges from rival groups that miss out.

Councils also need to ensure that neighbourhood plans and orders comply with European Union law on matters such as environmental protection. They must also ensure that plans do not contravene the Human Rights Act by, for instance, discriminating against any particular group.

How can councils best address these considerations?

Clare Fielding, a partner at law firm Herbert Smith, says that councils may have the power to approve neighbourhood forums, but they must "exercise it rationally" and be able to demonstrate why they have reached any decision.

2. Make a list of assets of community value

Councils' responsibility

Under the act, councils must maintain a list of land and property within their areas that is of "community value". They must also consider proposals from the local community regarding which assets should be included on the list. "Local authorities have an administrative role," says Walker.

What opportunities does this present for councils?

Compiling the list may be a useful exercise in "flagging the importance of property with community value" and will give councils a bigger say in the future of land and buildings that have community value, according to Ricketts. But he argues that the provisions "do not have sharp teeth" in that, while the act gives the local community the opportunity to acquire or maintain the land included on the list if it is put up for sale, "the owner does not have to accept the proposals of the community group".

What legal considerations should be taken into account when carrying out this responsibility?

Councils will have to ensure that the list is "lawful", in other words that it is unbiased and does not take into account "immaterial considerations", according to Ricketts. For example, the act states that to be lawfully included on the list, an asset must have been nominated by the community or by a voluntary or community body as defined by the council.

Meanwhile, councils must be wary of groups applying for land to be included on the list as a means of trying to prevent unwanted development, says Gallimore. "As developments come forward, applications to register a site as being of community value could be used as a spoiling tactic," he says.

In addition, the list may stop landowners allowing communities to use their land on a charitable basis, Walker argues. He cites concerns raised by lobby group the Country Land and Business Association, which has argued that the list could discourage a landowner from continuing to allow people to play cricket on his land for fear of the land in question being included on the list.

How can councils best address these considerations?

Councils face a particularly serious risk of legal action over community assets because they could be caught in legal crossfire between different interest groups, and possibly developers, and so must ensure that their decisions are watertight. Ricketts says that a key step in doing this is to ensure that decisions about what is included on the list are made by the "relevant committee or officers with the appropriate delegated power". Meanwhile, Walker advises councils to develop, and consult on, a definition of community value and believes that the government will issue advice on this.

3. The abolition of regional strategies and the duty to cooperate

Councils' responsibility

It will be up to local authorities to establish their own housing targets rather have them imposed from above, as they were by the soon-to-be-abolished regional strategies. However, councils' targets will have to be in line with the forthcoming National Planning Policy Framework, the current draft of which states that councils must plan for growth. Under the act's "duty to cooperate", local authorities must work together with other public bodies on relevant planning issues.

What opportunities does this present for councils?

Many councils have already taken the opportunity to reject housing targets that they felt were unfairly imposed by the former regional strategies. In June, research by property adviser BNP Paribas Real Estate and public affairs consultancy Tristan Fitzgerald Associates found that - among councils that altered their housing targets - there was an average 21 per cent fall in proposed housing numbers compared with the old targets. This suggests that 31,000 fewer homes a year are likely be built across England, the study found.

What legal considerations should be taken into account when carrying out this responsibility?

Fielding argues that councils could face legal challenges from communities that have had housing allocated to their area and want to argue that their council failed to fulfil its "duty to cooperate" with other authorities in considering alternative options. She anticipates that developers will use the same argument to bring challenges if their planning applications are refused.

How can councils best address these considerations?

Oliver Martin, a partner at law firm Irwin Mitchell, says that local authorities should take particular care to see both that they have appropriate structures in place to collaborate with their neighbouring councils and other public bodies, and that they can demonstrate through evidence that these exist and are used.

"They must be able to show that they are cooperating to do strategic planning. However, the nature of that work will require fairly frequent dialogue from which one would expect the evidence to arise," he says. Walker agrees that councils should establish a dialogue early on, but adds that effective collaboration is resource intensive and that given the current public spending cuts, they may struggle to find the necessary resources.

4. Duty to take into account local financial considerations when handling applications

Councils' responsibility

Local authorities have a duty to consider how planning applications could benefit their area financially when making planning decisions. For example, authorities must consider whether a new housing development would bring government grants from programmes such as the New Homes Bonus, which rewards local authorities for every net additional home that is built or brought back into use in their areas.

What opportunities does this present for councils?

Martin says the act makes the financial aspect of the planning process transparent and brings it out into the open, which could serve to enhance a local authority's reputation for probity among its electorate. "It spells out the material considerations in the determination of planning applications. It's putting things on the straight and narrow," he says. This is in contrast to the perception that hitherto planning decisions have been made in a clandestine way in "smoke-filled rooms", Martin adds.

What legal considerations should be taken into account when carrying out this responsibility?

Local financial considerations that are taken into account must be "material to the application", the act states. It also states that the term "local financial consideration" means a "grant or other financial assistance" that will, or could be, provided by the government, or a sum of money that would be received as a developer contribution. The latter could include funds received via the Community Infrastructure Levy, a new developer levy intended to raise cash for local infrastructure. Similarly, payments made under section 106 planning gain agreements must be considered.

However, Martin says that it as yet unclear whether the fact that financial considerations are explicitly referred to in the act means that they should carry more weight in local authorities' decisions than any other factors. He says that, given the wording of the duty in the act, he can fully understand why some might worry that it places financial considerations above all others, but that this is only likely to become clear once the wording has been tested in court.

How can councils best address these considerations?

Fielding says that councils must apply the "right weight" to local financial considerations or they may face legal challenges from local communities or developers that believe they have not done so. Local authorities must exercise their discretion in a "rational way" that enables them to set out the logical argument they used to come to their decision, she says.

5. Greater enforcement powers for councils

Councils' responsibility

Local authorities can now apply to a magistrates' court for a planning enforcement order if it is discovered that a landowner has concealed an illegal structure, regardless of how long ago the structure was completed (see Legal Viewpoint, p35). Prior to the introduction of the Localism Act, there was a four-year limit within which councils had to apply for an order. But what constitutes concealment is currently unclear and local authorities will have to clarify how they define it.

What opportunities does this present for councils?

The act will give local authorities an unlimited amount of time in which to take action. Ricketts says this means that local authorities will be able to address the problem that arises when an illegal building only comes to light late because it has been concealed, for instance behind hay bales. "It is an opportunity to act against all those who break the rules, and there can also be concealed changes of use in urban areas," he says. He adds that some members of the public were angered by councils being unable to take enforcement action because of the time limit rule, and the change is a chance for councils to avoid such reputational damage.

What legal considerations should be taken into account when carrying out this responsibility?

Councils may find it difficult to prove that landowners have deliberately concealed illegal structures, according to Ricketts. "Councils will have to be clear about how they define concealment," he says. "Is it deliberate concealment if the landowner has remained silent? The landowner may say: 'If you had stood on a hill, you would have seen it.'"

According to Walker, councils will also have to consider what they do in a situation where part of a property has been illegally constructed and the building sold on. "If you buy a property and the previous owner had concealed the development, you might be liable," he says. Walker adds that, in such cases, councils will have to choose between taking a more relaxed stance on unauthorised development or pursuing essentially innocent parties.

How can councils best address these considerations?

"Local authorities will have to ensure they are not too creative in their interpretation of deliberate concealment," says Ricketts. He adds that detailed guidance of how to define deliberate concealment would help councils, although this is not expected to come from government. "Local authorities will also need to watch case law," Ricketts says.

 

HOW THE LOCALISM ACT INTENSIFIES DEVELOPERS DUTY TO CONSULT

The act has many planning implications for developers. Law firm Pinsent Masons warns them that they need to "carefully monitor the neighbourhood plan process in areas in which they have an interest, so they can take action if necessary to ensure their proposed developments can be brought forward". The act relaxes the predetermination rules governing the kinds of conversations that councillors can have about proposed schemes prior to the planning committee meeting. And new rules giving local groups time to bid to buy assets of community value when they come up for sale concern some landowners. But perhaps the most important change is the act's onus on developers to consult residents on large developments at the pre-application stage. Here we explain the implications:

1. The act compels developers to consult local people before submitting large planning applications

"The statutory duty to consult will be a key factor in determining applications," says Hogan Lovells partner Michael Gallimore. Colin Boyd, head of planning at law firm Dundas & Wilson, says developers will have to work with communities in developing applications. "Developers will have to approach this with a view to engaging with the community rather than just saying: 'This is the application'," he says. There could also be legal challenges if key groups feel that the consultation is inadequate, says Gallimore. "This is a big opportunity for third parties and pressure groups to challenge whether the statutory duty is being carried out properly," he says. Local authorities will have a responsibility to check consultations have been carried out to the required standard. Gallimore says this could slow down the development process.

2. Developers must prove they have done a pre-application consultation

As well as conducting a pre-application consultation with the community, developers must ensure that they document all consultant activity and build up a body of evidence to prove who they have consulted, when and to what extent. Beverley Firth, a partner at law firm Mills & Reeve, says: "There is a lot of scope for challenge if developers don't deliver." Firth adds that, because the government is promoting the idea of localism, everyone expects to have a say and to get what they want. But it will be hard for developers to both ensure that the entire community has been consulted on a proposed application and be able to prove that is the case, according to Firth. Boyd says that, if developers want to avoid legal challenges related to their pre-application consultations, they will have to take heed of clauses in the act relating to publicising consultations and ensuring people have "good time" to respond.

3. Developers must show that their application has been adapted in response to the consultation

The act stipulates that applicants should "have regard to any responses to the consultation" when they subsequently submit applications. "Developers must show what they've done to take the comments from the consultation on board," says Firth. "They must demonstrate how the scheme has been changed." If developers do not do this, there will be plenty of opportunities for legal challenges, she adds.


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