‘LURB’ your enthusiasm – true impact of the Levelling-Up and Regeneration Bill

‘LURB’ your enthusiasm – we will need to wait for secondary legislation to get a true picture of the impact of the Levelling-Up and Regeneration Bill

As announced in this year’s Queens Speech, the Levelling-up and Regeneration Bill (the “Bill”) was published on 11th May (with an accompanying policy paper) with the stated aims, to:

• create a legal duty for the Government to set and report against the levelling up missions;
• devolve powers to all areas in England that want them, providing more control over budgets, transport, and skills;
• empower local leaders to regenerate towns and cities and restore local pride in places; and
• improve the planning process.

Part 7 of the Bill is focused on Compulsory Purchase and includes proposed legislation in respect of powers, procedure, and compensation. We summarise the key provisions below and set out some ‘Watch this Space’ thoughts.

Minor changes to current legislation

The Bill makes the following minor drafting amendments in sections 140 and 149, respectively.

• Wording is inserted into section 226 of the Town and Country Planning Act 1990 to clarify that the ‘improvement’ requirement for local authorities to be granted compulsory acquisition powers include ‘regeneration’.
• Sections 6D and 6E of the Land Compensation Act 1961 are amended to tighten up the definition of the scheme to be disregarded under the ‘no-scheme world’ principle so that the term “development” is defined as “re-development, regeneration, and improvement”.  

 

Online publicity (s141 of the Bill) and common standards for compulsory purchase data (s148 of the Bill)

There has been much talk about modernising the CPO process through digitalisation, allowing for greater transparency through ease of access to documents and decisions. The Bill does not go far enough to address these issues and takes baby steps only toward technological progress. However, it is fair to say that data poverty does mean that there are significant constraints to moving to a fully digital CPO world.

The Bill includes provisions that:

• the notice of the making of a CPO must be published on an “appropriate website” which members of the public could reasonably be expected to find on searching the internet for information about the scheme;
• the notice of the confirmation of a CPO must also be published on an “appropriate website” for a period of 6 weeks; and
• data standards may be introduced in the future for acquiring authorities to guide the preparation, holding, or providing of relevant compulsory purchase data (meaning information contained in compulsory purchase documentation). It is unclear how burdensome this requirement will be at this stage but the aim seems to be to impose data standards across the CPO process in order to pave the way for a future modernised system that better utilises digital technologies to drive efficiencies in applications, decision-making, and public engagement.

 

Confirmation proceedings (s142 of the Bill)

Other than in specified cases, the Bill allows for the confirming authority to choose between either: the current confirmation procedure, being a public local inquiry; or a new “representations procedure”. Detail on this representations procedure will be forthcoming in secondary legislation but the Bill details that the confirming authority must:

• have regard to the scale and complexity of what is proposed by the order when deciding on the option to follow; and
• allow for objectors and acquiring authorities to make representations either in writing or, on request, orally at a hearing.

The success of this provision will depend on the detail around the representations procedure and the proposed hearings. It is possible that this could create an option for smaller-scale or less complex CPOs to be promoted and confirmed in a less formal, more streamlined procedure with reduced costs. However, the same burdens will remain on the acquiring authority to justify the CPO and prove a compelling case – it might therefore be the case that the same preparation will be required as for a public inquiry.

For this proposal to evolve into a genuinely useful alternate form of proceedings, it is important that significant thought is put into the form, format, and requirements of representations procedure and hearings to ensure that these are, in practice, actually more efficient and less burdensome than an inquiry. If not, they will be of little use.

It should also be noted that the Bill criteria for the choice of proceedings route is based on the scale and complexity of the Order, not of the impact of the Order on landowners. This could be a future point of challenge.

Conditional confirmation (s143 of the Bill)

The current confirmation avenues for a confirming authority are to: confirm; confirm in part; or to reject a CPO application. The Bill provides for a new fourth option; conditional confirmation. As the name suggests, the effect of a conditional confirmation is that the Order is confirmed with conditions that must be discharged prior to implementation. The conditions will be discharged if the confirming authority decides, on application by the promoting authority, that the conditions have been met.

however, the conditional Order will expire if the confirming authority has not received a discharge application by a certain time or decides that the conditions have not been met. The time limit will be set by the relevant authority when confirming the Order.

The intention of this proposal is to create certainty of land assembly at an earlier stage of a scheme and to give confidence to promoting authorities. This could be useful as the risk of a CPO being rejected can discourage local authorities from utilising CPO as a tool as it can be too expensive in terms of cost and resources to re-start the process following a rejection.

It would seem that the aim is to somewhat mirror the DCO or TWAO process where the land and rights assembly process works in parallel with other key elements such as the application for planning permission. Conditional Orders might then mean that the CPO process is more readily engaged with by local authorities as a development tool and is commenced at an earlier stage of projects.

There are some clear positives in this proposal, specifically in terms of funding and planning. It allows for a promoting authority to confidently commence the CPO process to ensure land assembly for a scheme without being delayed by the planning process or lack of a formal funding agreement. It also provides comfort to (and potentially attracts additional) funders who can enter into an agreement with reduced risk. As usual the devil will be in the detail of the secondary legislation, but particular points to watch for are:

• The detail around the application procedure in terms of the discharge of conditions. We can see in the planning application conditions procedure that it is now the de facto position for conditions to be imposed and that this procedure can often become burdensome for applicants and delay schemes.
• The Bill requires a provision for relevant objectors to be given notice of the discharge application and to be given the opportunity to make related written representations. Will this give stakeholders a second chance to object, and will this process actually further delay CPOs?
• Will reliance on conditional confirmation encourage underprepared and unjustified CPOs? More detail is needed on the scope and threshold of what conditions might be imposed. We must also ensure to remember that CPO is a method of last resort so early and genuine engagement on a voluntary basis is still vital.
• What are the proposed length of condition time limits? There is a risk that if these are too lengthy that land will be blighted for a longer period of time leading to increased uncertainty as to whether conditions can be met and a scheme deliverable; potentially causing increased distress to landowners.

 

Time limits for implementation (s146 of the Bill)

The Bill includes the power for a confirming authority to specify a period of longer than the current three years for the implementation of compulsory acquisition powers. However, it is also detailed that the acquiring authority cannot include this extended time limit within the Order submitted for confirmation.

It is not clear how or when an acquiring authority will be able to request that an extended time limit for powers is considered by the confirming authority and the tests that will need to be met for this to be granted – this clarity will be needed in due course. However, in general there are many potential positives in the proposal of longer implementation periods, specifically in respect of multi-phase regeneration schemes where currently multiple Orders may be required for delivery – resulting in high costs and significant uncertainty for landowners, acquiring authorities and funders alike.

However, confirming authorities will need to ensure that this is not used as a method to delay schemes unnecessarily. Again, this could create increased distress for communities if abused.

 

Agreement to vary vesting date (s147 of the Bill)

This provision allows an acquiring authority and landowner, after service of a general vesting declaration, to mutually agree a later vesting date. This will, of course, also change the valuation date and it will be interesting to see how other issues arise and are resolved – for instance, will an acquiring authority require an agreement to be signed clarifying that losses must still be mitigated if incurred after the original vesting date etc?

 

Other relevant provisions

Outside of Part 7 of the Bill, there are a number of other provisions relevant to regeneration and these are set out briefly below:

• The policy paper sets out that reform of sections 14-17 of the Land Compensation Act 1961 will be undertaken to ensure fair compensation is paid in respect of “hope value”. This will include making the relevant statutory planning assumptions more realistic and streamline the process of applying for a Certificate of Appropriate Alternative Development. We understand there is more to come on this later in the year.
• This Bill allows for a new type of locally-led Urban Development Corporation, the aim of which is to empower locally-led transformation with accountability to local authorities, rather than the Secretary of State. The proposals include the ability for development corporations to take on some local authority powers, such as plan-making, neighbourhood planning and development management, as well as changes to the imposition of aggregate borrowing caps.
• Where a Local Plan is up-to-date, the requirement on a local authority to maintain a rolling five-year supply of deliverable land for housing will be removed. This will have a significant impact on developers and remove a relied upon justification for proposed schemes on appeal.
• A new power is included for local authorities within the Bill to force high street rental auctions of selected vacant commercial properties in town centres and on high streets which have been vacant for more than one year. This measure requires careful analysis and guidance from lawmakers before it is implemented as it has the potential to lead to landlords, in order to avoid a forced auction, looking to convert units to different uses or bringing in undesirable tenants from a placemaking perspective.

 

Watch this space

There is a lot of interesting reform included within the Levelling-Up and Regeneration Bill that will have significant impacts upon the promotion of CPOs and the levelling-up agenda. However, we will curb our enthusiasm until we see the detail that comes through secondary legislation; it is the detail that will make or break the impact of the proposed reforms.

In concept, conditional confirmations and longer implementation periods could provide major improvements for multi-phase regeneration schemes by negating the risks of a funding gaps or delays in planning and reducing the occasions where multiple Orders need to be sought in order to deliver an holistic scheme. The proposals could therefore result in a more effective process that delivers an increasing number of successful schemes, with lower costs and utilising public sector resources. However, it is also the case that a laborious process to discharge conditions, a more confused system and the submission of poorly prepared CPOs aiming for conditional consent could lead to delays, uncertainty and distress for the local community.

It is therefore vital that the government consults and works in tandem with the industry in respect of secondary legislation to ensure that reform leads to improvement and a more effective and efficient system. If not, there is significant risk of moving in the opposite direction

 

To discuss these issues or how we can support you in respect of a regeneration or development scheme you are promoting (or are impacted by), please contact Rob Quaile on 07760 330298 or robquaile@ardent-management.com or Colin Cottage on 07768 070255 or colincottage@ardent-management.com