The following question was asked by Councillor Page:

1) Will the Chair update the Committee with the most recent consolidated figures in respect of:

a)           the number of residential units that have been approved via the Prior Notification Procedure introduced in May 2013 which allows conversions from former offices to residential use?

b)           the loss in fee income to the Borough Council as a result of this change and the estimated loss to the authority in respect of Section 106 contributions in the form of (a) affordable housing, (b) financial contributions to affordable housing off-site, (c) financial contributions to education and (d) financial contributions to leisure and open spaces.

2) Would he summarise the impact of all these changes and the losses to RBC in affordable housing, education and transport and other essential contributions?

3) Would he also comment on the implications of the DCLG announcement on 28 November 2014 preventing this, and all other planning authorities, from seeking Section 106 contributions on proposed sites of ten homes or fewer?

4) Lastly, would he update the Committee on the results of recent relevant planning appeals in respect of securing affordable housing contributions from sites of up to 10 dwellings?

REPLY by the Chair of the Planning Applications Committee (Councillor Maskell):

(1a) Conversions of offices to flats

Background

Before May 2013 planning permission was required to convert a building from an office to residential use.  Since May 2013 developers have benefited from this change being “permitted development” by a process to seek “prior approval” from the Local Planning Authority. 

This was to be a temporary right and due to expire in May 2016.  However, the Government made this right permanent by amendments to the General Permitted Development Order as of April 2016. 

The fee payed to the Local Planning Authority for processing these applications for prior approval was just £80 when first introduced.  This was increased to £96 last spring 2018 when all planning fees increased.

Units approved

The total number of residential units that have been approved by this Prior Approval process, between its introduction in May 2013 and 31st March 2019, is 1,708.  This excludes alternative prior approvals on the same site.

Up to 31st March 2018, 750 homes had been completed as a result of the new permitted development right.  Conversions to provide a further 280 homes were also underway at that point.

(1b) (i) Loss of fee income

Had each prior approval application applied for since October 2013 been submitted as planning applications, the fee income received up to 1st March 2019 would have been £1,008,341. This takes into account the charge of £80 (and recently £96).

(ii) Loss in form of Affordable Housing & S106 contributions

Affordable Housing

Had the schemes that have received Prior Approval up to 31^st March 2019 been submitted as planning applications, and subject to full affordable housing policy compliant Section 106 agreements, they would have been expected to lead to the following levels of affordable housing contributions:

a)   £2,863,000 towards off-site affordable housing

b)   515 affordable housing units

However, it is accepted that in some cases the affordable housing offer might have been reduced following negotiation based on assessments of viability. 

Towards Transport, Education, Leisure and Open Space

Section 106 contributions towards Transport, Education and Leisure and Open Space have not often been sought since the introduction of the Community Infrastructure Levy (CIL) on 1^st April 2015. 

However, when office floorspace has not been in use in the 3 years before the Prior Approval application is made the development is not liable to pay CIL.  This means that many office to residential conversion schemes approved since CIL was introduced have not been required to contribute towards these sort of facilities. 

Had the schemes that received Prior Approval before April 2015 been submitted as planning applications, and been subject to full policy compliant Section 106 agreements, it is estimated that the following levels of contributions would have been achieved:

a)   £321,964 towards education;

b)   £1,850,400 towards leisure and open space.

Transport contributions were rarely justified based on residential traffic generation being less than typical office traffic generation data.

2) Summary of losses

To summarise, the total Section 106 contributions lost is £5,035,364, in addition to the 515 affordable housing units.

3) DCLG announcement on 28 November 2014 re Sites of up to 10 dwellings

As Committee is aware, Reading Borough Council and West Berkshire Council challenged the Ministerial statement made on 28 November 2014 and DCLG’s published alterations to National Planning Policy Guidance (“NPPG”). The intent of Statement and alterations was to exempt developments of 10 or less dwellings from planning obligations for affordable housing and social infrastructure contributions.  They also introduced a new provision, the Vacant Building Credit, which excluded existing floorspace from calculations on the provision of affordable housing and infrastructure payments. 

The case was heard in the High Court in April 2015 and the judgement found in favour of the challenge and quashed the amendments to the National Planning Practice Guidance.  The Secretary of State then successfully appealed that decision in the Court of Appeal in May 2016 and the Ministerial Statement and the changes to the National Planning Practice Guidance were reinstated.  

However, the Court of Appeal judgement accepted that local circumstances can be used to justify an exception to the WMS and NPPG.  At its meeting in July 2016, Strategic Environment, Planning and Transport Committee decided that the Council should continue to operate Policy DM6, which seeks affordable housing for schemes of 10 or less dwellings, and produce the evidence required to justify this approach.

4) Appeal record for defending Policy DM6

Since the SEPT decision there have been 33 appeals against the Council for refusing planning permission or for not determining a planning application where Policy DM6 was critical.  When responding to these appeals the Council has been able to provide a full case to explain why local housing need circumstances justify this adopted policy.  In all but four (these being among the earliest decisions) the Inspectors have given weight to the Council’s case.

Indeed, in the latest appeal decision received for 20 Chalgrove Way, while the Inspector allows the appeal there is strong support of the Council’s case for affordable housing; I quote:

There is an inconsistency between SDPD Policy DM6 and paragraph 63 of the Framework. However, there is robust evidence to indicate that in the Borough that there is a demonstrated need for a contribution towards affordable housing to be provided in connection with schemes that are not major developments. The Council also makes reference to a number of appeal decisions in the Borough which support this approach including decisions made after the 2018 version of the Framework was published. Furthermore, the appellant has not indicated that the financial contribution would prevent this small site from coming forward for development. Therefore, on the basis of the evidence before me, I consider that this demonstrated local need for small sites to make contributions to affordable housing outweighs the material considerations in this case.

Other news

The Council’s Submission Local Plan maintains this Council’s commitment to seeking more affordable housing from sites for 10 or less dwellings in the form of Policy H3.  The examination hearings into the Local Plan took place in the autumn of 2018 and this policy was discussed at the hearings. 

I can advise Planning Applications Committee that the Council has now received the Local Plan Inspectors’ post hearing advice note.  We have been asked to provide further information to justify affordable housing related policies.  Officers are confident that this justification and further evidence can be provided in time to still be on target to adopt a new Local Plan by the end of this year.