Life comes at you fast sometimes. Covid-19 has, in an incredibly short space of time, had far reaching implications for the way we work and how we live our lives. The emergency has meant that the planning system has had to adapt to meet the demands of the "new normal".
Over the longer term, the implications of the crisis for the development industry could be far reaching. The crisis will require a creative approach to the use of planning regulatory tools to ensure the long-term delivery of the government's housing and infrastructure targets and to secure wider economic growth.
Immediate Implications for the Planning Systems
So how has the planning system adapted to the immediacy of the crisis?
Two key ramifications have been well trailed in the news to assist the food and beverage industry and food retailers. Necessary changes have also been made quickly to how the courts and appeals systems deal with planning matters.
Changes to Permitted Development Rights
The government has moved expeditiously to help food and drink establishments closed by the new social distancing requirements. Pubs and restaurants can now operate takeaway operations serving hot food and drinks without the need to secure the express grant of planning permission for any change of use. This relaxation of the planning restriction is lifted for a limited time period of up to 12 months beginning on 24 March 2020. The business in question will be required to inform the local authority when the new use begins and ends. However, the sale of alcoholic beverage will still be subject to licencing laws.
Securing the Supply Chain
In response to recent panic buying, the Housing and Communities Secretary has issued a Written Ministerial Statement urging local authorities to use greater discretion in the enforcement of planning conditions to allow more frequent deliveries of food and other essential items. With the operation of many supermarkets and distribution centres being restricted by onerous planning conditions, which regulate the time at which deliveries may be made, and the frequency of deliveries, local authorities are urged to take a lenient approach to breaches of normal controls to ensure the nation is fed. The Ministerial Statement, which can be viewed here, emphasises that enforcement action against businesses for the breach of such conditions should take into account the urgency of the current situation we face.
Keeping the system moving – Committees, Planning Appeals and the Courts
Local planning authorities first – put simply, no new consents will be granted unless local authority administration continues to operate effectively. With that in mind, we are awaiting new regulations to enable local council committee meetings to be held virtually for a limited period.
Second, the appeal system. The Planning Inspectorate moved quickly to issue new guidance (see guidance) to inform the users of the appeal system that all examinations, hearing, inquiries and any associated site visits are suspended until further notice to alleviate any public health issues for participants. The Inspectorate has, however, stressed that it is actively looking at how to use technological solutions, such as videoconferencing, to enable proceedings to continue and this will clearly be essential if trust in the system is to continue during what may prove to be a prolonged period of social distancing.
Some cases may also be determined by written submissions, in response to questions provided by the Inspectorate, although this will only apply where this has been agreed by all parties.
For those who are in the process of submitting an appeal or application for a Development Consent Order, the guidance is currently unclear and will be updated as the situation evolves. However, it may be the case that alternative arrangements will put in place so as to avoid a backlog of cases. We will keep providing updates as soon any further guidance is issued.
That brings us to the Courts. The Court Service has also acted quickly to adopt a new pilot Practice Direction in response to Covid-19 which will last for an initial period of 6 months. A summary of the measures being adopted by the Courts comprises more hearings being heard by a single judge, oral hearings being conducted remotely via video link or phone conference, and much wider use of paper determinations.
Changes over the longer term
Over the longer term, we are currently awaiting the Government's Planning White Paper for which the content was trailed at the time of the Rushi Sunak's budget (that rather historically irrelevant speech which was quickly superseded by the fiscal measures announced by him on 20 March in Downing Street). We can assume the White Paper may now be delayed but, in the interim, it seems highly likely that planning regulations will quickly need to respond to the economic headwinds generated by the Covid-19 Crisis, which could have a far-reaching impact on the development industry. In response to the 2008-10 financial crisis, the government made some innovative, temporary, changes to planning law and policy to ensure the development industry did not grind to a complete halt. While this crisis is in its early stages, a similar set of interventions is likely to be deployed, and in our view the Government is likely to consider the following.
Extensions to planning consents
In the current climate, the level of uncertainty and disruptions to cash flow mean that development projects may struggle to remain viable and may have to be delayed or suspended. However, that is not to say that developers may not be able to rebound from this crisis and be in a position to resume such projects when the outlook is clearer.
In 2008-9, planning permissions granted on or before 1 October 2009 were allowed to be temporarily extended. Additionally, section 96A Town and Country Planning Act 1990 was introduced. This allows non-material changes to existing planning permissions. Such changes do not fundamentally change the scheme, but can more easily enable a planning permission to be optimised to suit the change in economic circumstances.
A measure to enable the life of permission to be extended could be put in place in response to Covid-19 and section 96A remains available (alongside section 73) to amend permissions.
There are two key points here.
Firstly, many planning obligations contain a force majeure clause. If certain works or matters need to be completed within set timescales under planning obligations, but compliance is not possible during a period of lock-down, it may be that developers can rely on force majeure clauses to protect their position. Check your agreements carefully!
Secondly, when the 2008-9 financial crisis hit, section 106A of the Town and Country Planning Act 1990 allowed for a temporary re-negotiation of existing planning agreements where they were no longer viable in their current form. We foresee the government looking at the introduction of a similar measure in response to Covid-19 and, in the interim, we anticipate local planning authorities are likely to become more amenable to variations to planning agreements so as to ensure the delivery of development and the delivery of government targets in their areas. Amendments to early stage viability review mechanisms may be particularly important in circumstances where consents simply cannot be implemented within the timescales required to avoid triggering such a review.
Another consequence of the Convid-19 crisis has been the delay of the Environment Bill 2019-21 which has been suspended until further notice. Any delay could impact the timescale for the creation of the Office for Environmental Protection (OEP) which had a target date of 1 January 2021. The OEP is designed to be independent and have far-reaching powers to hold the government to account on environmental policy after Brexit.
It is very early days in what remains a fast moving situation. The Planning & Infrastructure Consenting Team will keep you up to date throughout the crisis on changes to the planning system arising from it. Throughout, and beyond, we will be able to advise on how best to use planning tools to protect your commercial position in what is likely to be a testing development market.