No-deal Brexit impact planning: What to prepare for

Prime minister Boris Johnson is committed to leaving the EU on 31 October. How would a no-deal Brexit impact planning?

Boris Johnson: Prime Minister refuses to rule out no-deal scenario
Boris Johnson: Prime Minister refuses to rule out no-deal scenario

Last week’s Act of Parliament aimed at blocking a no-deal Brexit has reduced the chances of the UK crashing out of the EU without a deal. However, given the twists and turns in the Brexit saga, it would be foolish to believe the prospect has passed entirely. Prime minister Boris Johnson says he wants a deal, but some commentators argue that he has made little progress towards one. They say his priority, should a deal on his terms not be forthcoming, is to get out on 31 October in order to avoid the risk of a mauling at the hands of the Brexit Party in a general election. So, what would a no-deal scenario mean for planning?

NATIONAL GOVERNMENT 

From a national legislative and regulatory perspective, the 2018 Withdrawal Act transposes all EU legislation into domestic law. "It’s about ensuring continuity," says David Elvin QC of Landmark Chambers. "If you take environmental law, the vast majority of it comes from EU legislation". Exiting without such transposition of EU rules would produce "a huge vacuum in the legal system," he says.

As a result, once the Withdrawal Act comes into force, courts will still need to apply EU law enacted prior to Brexit day, as well as decisions made by the Court of Justice of the European Union, although the Supreme Court will be able to depart from them. The act also allows courts to have regard to post-Brexit developments in EU law, but there is no duty to follow them. "The intention is to allow UK law to develop from Brexit and the regulations preserved can then be changed," says Elvin.

However, the government will still have some urgent tasks related to planning on its hands should the UK crash out without a deal. The absence of a deal would negate the two-year transition period contained in former prime minister Theresa May’s withdrawal agreement and there simply is not time to set up replacement institutions by 31 October.

For instance, EU-derived environmental law, which affects planning through environmental impact and strategic environmental assessments, is enforced through the European Commission and European courts. A new watchdog, the Office for Environmental Protection, is proposed but "neither England nor the devolved nations will have full replacements ready", warns Richard Cowell, professor of environmental planning at Cardiff University.

Should a no-deal exit lead to the widely predicted economic downturn, the government would pull every possible lever to stimulate growth. With the base interest rate currently at 0.75 per cent, the Bank of England has little wriggle room, ministers could well look to further deregulate the planning system, according to Cowell. "Look out for the government once again blaming planning and looking for yet more ways to weaken it in the belief that this will stimulate development," he warns.

Piers Riley-Smith, barrister at Kings Chambers, adds: "The removal of the ‘oversight’ of European law and directives will make the planning regime, especially relating to environmental matters, more susceptible to be tinkered with for political gain."

LOCAL PLANNING AUTHORITIES

The immediate impact of no-deal on many local planning authorities (LPAs) would relate to problems regarding the movement of goods and waste in and out of the country. Should there be severe hold-ups at ports, planning departments would be called on to find sites to mitigate the impact. "The tasks urgently facing LPAs would be at the sharp end of the wider problems raised by a no-deal Brexit, such as having to find space for temporary truck parks," says Cowell.

Less immediately, LPAs would have to contend with changes to demographic projections prompted by no-deal. The Office for National Statistics (ONS) is due to publish its next set of household projections between May and September next year. That is significant for any LPA in the midst of drawing up a local plan because ONS household projection figures are fed into the standard formula for assessing local housing need.

Not only is it difficult to predict how the ONS will take on board the impact of a no-deal Brexit, it is also uncertain how the government will react to the consequent local housing need figures. After all, last time the household projections were updated, the government decided the figures produced were too low, and promptly tweaked the formula. "So, when the government sees the next lot of projections, they may not like the numbers and change the formula again," says Cristina Howick, director, planning policy and evidence, at consultancy PBA.

As a result, LPAs will have to be prepared to update their local plans very quickly to take account of new local housing need numbers, which are difficult to predict at the best of times but would be made all the more unpredictable in the event of a no-deal Brexit. "The answer is to always overshoot; to have additional sites and provision," says Howick.

LPAs that do not have an up-to-date plan also risk losing control of planning in their area. To prevent development on sites that are not in their plans, LPAs have to demonstrate both that they have a five-year housing land supply in place and that they met their housing delivery target in the previous year. Should the economy fall into recession, housing delivery will take a hit and there will not be much that LPAs will be able to do about it. "So, you need to grab the bull by the horns and get a plan as soon as possible," says Howick.

In the event of a no-deal, LPAs will also have to consider the immigration status of any EU nationals they employ. At the time of writing, there had been no agreement on the rights of EU nationals. "Anybody who is employed in planning who comes from an EU country will need a work permit," says Janice Morphet, visiting professor at the Bartlett School of Planning, University College London.

DEVELOPERS

For developers, the biggest impact would be the forecast recession, meaning they would be less able to sell homes – or lease or sell commercial space. While experts would envisage them building out schemes already started, they would then expect developers to hunker down.

That would lead to a dip in applications received by LPAs and therefore in fee income, and affect housing delivery performance. However, British Property Federation director of policy, real estate, Ian Fletcher says housebuilders are not licking their lips in anticipation of the housing delivery test enabling them to force through applications at appeal.

"From the first year’s figures on the housing delivery test, there were quite a few authorities that weren’t hitting their numbers and there will be fallout from that," he says. "[No-deal] might accelerate it, but I don’t think there are developers out there waiting to pick off authorities that they think will have bad figures." 


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