What we know and what we don’t, The Levelling-up & Regeneration Act

The Situation: The Levelling-up and Regeneration Act (“the Act”) was passed by Parliament and became law on 26 October 2023.

The Development: The UK government states that the Act will “speed up the planning system, hold developers to account, cut bureaucracy, and encourage more councils to put in place plans to enable the building of new homes.”

Looking Ahead: Many of the measures set out in the Act are not fully detailed (further regulations are required before they can take effect) and, while the changes are intended to simplify the planning regime, developers should closely follow the progress of implementing legislation over the coming months.

The Act, which was passed by Parliament and became law on 26 October 2023, largely provides a framework for a raft of future changes to the planning system. Many of these intended changes will first require the introduction of secondary legislation and new planning policy before they can take effect. At the moment, there is little guidance as to when the secondary legislation will be forthcoming, and with the prospect of a general election later this year, it is unclear when the substantive changes will come into effect.

We summarise below a few of the key changes to the planning system under the Act. These are yet to come into force.

Commencement Notices for Planning Permissions

Before commencing development pursuant to a planning permission, a developer will be required to submit a commencement notice to the local planning authority specifying the date on which the development is expected to begin. Failure to serve a notice will be a criminal offence liable on summary conviction to a fine of up to £1,000.

Developers will need to comply with this new requirement. The mandatory commencement notices will provide a formal record of when development commenced, which may be helpful in transactional due diligence.

Changes to the Roles of the Development Plan and National Policy in Determining a Planning Application

Section 94 of the Act introduces the concept of National Development Management Policies (“NDMP”), which will be national development and land use policies covering issues of general application across most areas (for example, heritage protection). These policies will be subject to consultation and are to be determined by the secretary of state.

Section 93 of the Act changes the roles of the local development plan and national planning policy in determining a planning application. If regard is to be had to the local development plan and any NDMP, the determination must be in accordance with the development plan and the NDMP, taken together, unless material considerations strongly indicate otherwise. However, if there is any conflict between a development plan and a NDMP, then the conflict must be resolved in favour of the NDMP. The long-established statutory primacy of the development plan is therefore eroded.

New Section 73B for “Permission Not Substantially Different for Existing Permission”

The Act inserts a new section 73B into the Town and Country Planning Act 1990 (“TCPA”) for “Applications for permission not substantially different from existing permission.” This is intended to help plug the gap between applying for wholly new planning permissions and the sometimes necessary practice of using two applications, one for “non-material amendments” under section 96A of the TCPA 1990 and one for “minor material amendments” under section 73 of the TCPA 1990, in order to secure amendments to proposed development schemes. The practice of submitting parallel applications arose following the Finney judgment, which ruled that the description of development cannot be amended by a section 73 application, thereby limiting its application.

Section 73B will come with certain limitations. For example, it cannot be used in respect of a planning permission granted under section 73 or 73A, and it cannot be used to alter the time limits for beginning work or for submitting reserved matters applications.

10-Year Time Limit for All Enforcement Action in England

The Act amends section 171B of the TCPA 1990 to extend the enforcement time limits for a breach of planning control comprising building without planning permission and change of use to a single dwellinghouse from four to 10 years. The abolition of the four-year rule for these breaches of planning control applies to England only (the four-year rule still applies in Wales).

This will be a significant change and will have an impact on transactional due diligence. Developers intending to submit an application for a certificate of lawfulness of existing use or development based on a four-year period should consider making the application as soon as possible before these changes come into effect.

New Infrastructure Levy Set to Replace CIL

The Act introduces a new charge on development called the Infrastructure Levy (“IL”).

All local planning authorities in England will be mandated to issue an IL charging schedule, rather than having discretion to do so as is currently the case with the Community Infrastructure Levy (“CIL”). The IL would be based on the gross development value rather than the development’s floorspace. The IL liability would be paid as and when the relevant development commences and in accordance with procedures to be set out in the IL regulations.

IL is intended to fund affordable housing as well as other local infrastructure and should reduce the circumstances in which a section 106 agreement is required. IL is also intended to replace CIL in due course (save for Mayoral CIL in Greater London and CIL in Wales, which will remain).

Until further regulations are issued by the secretary of state, there is some uncertainty as to how IL will interact with the existing CIL regimes and section 106 obligations.

Two Key Takeaways

1. The Act became law on 26 October 2023, but many of the measures will not come into effect until secondary legislation and guidance is issued, and there is some uncertainty as to when this will happen.
2. Although not all measures are in force yet, the Act includes significant changes which developers and their advisors should be aware of, in particular: (i) the requirement for commencement notices; (ii) changes to the relationship between development plans and national policy; (iii) a new section 73B of the TCPA 1990 for “permission not substantially different from an existing permission”; (iv) the 10-year time limit for all planning enforcement action in England; and (v) the introduction of a new IL, which is set to replace CIL.

Source: JD Supra