Planning permission up for sale?

This article was first published in Estates Gazette on 12 April 2023 - see here.

Emphasising local support secured by economic benefits may be in conflict with the long-standing principle that planning permissions should not be bought and sold.

The December 2022 government consultation on changes to the National Planning Policy Framework closed in March 2023. Supposedly, to encourage such development to come forward, it is proposed that new onshore wind development and the repowering of wind turbines should require “community support”. However, an existing community consent requirement for onshore wind development, introduced in 2015, has been the death knell for onshore wind. What has changed? 

When the government announced the proposed NPPF changes early in December 2022, it claimed that the new requirement would benefit communities “through lower energy bills”, implying that community support would flow from financial reward. However, a fundamental principle of the planning system has always been that planning permissions “cannot be bought or sold”. Is this a move towards just that? If so, should we be concerned?

Buying and selling planning permission

When granting planning permission, local planning authorities can only take into account “material” considerations. Newbury District Council v Secretary of State for the Environment [1991] 1 EGLR 175 determined that material considerations must “be for a planning purpose”, ie they must “relate to the character of the use of the land”. In R (on the application of Wright) v Resilient Energy Severndale Ltd and another [2019] UKSC 53; [2019] EGLR 3, the Supreme Court confirmed that benefits which are “not proposed as a means of pursuing a proper planning purpose but for the ulterior purpose of providing general benefits to the community” would be “a general inducement to the council to grant planning permission”, so not permitted.

Unless primary legislation changes this, the only way to get around the principle is to make sure that payments to communities are not required by law. Even if they are made voluntarily, local authorities must not take such payments into account when making decisions on planning applications. However, mostly in the context of infrastructure development but also now elsewhere in national planning policy, developers must increasingly demonstrate “local consent” through communities feeling direct benefits from or compensation for the proposed development. This is uncomfortably close to embracing the concept that planning permissions not just can but should be bought and sold.

Reasons not to buy local consent

Putting aside legal restrictions, would “buying” local consent ever be a good idea? There are at least six reasons why not:

• Development should be in the right place for the right reasons. National policy should identify developments that are needed in the public interest, and local planning authorities should weigh the public benefits against local impacts. If a development is in the public interest and its local impacts are acceptable in planning terms, it should be consented. If not, then it should not be consented. Payments to communities which don’t serve a planning purpose, whether in cash or in kind, distract from this planning judgment, at worst acting as a bribe.
• Why should some developments require local consent and not others? If the requirement for “local consent” becomes part of the planning system for some sorts of development, there will be pressure for it to be applied to other types. Where will it stop? Should residents living near to a new road be given cheap petrol? What payments should be offered to residents next door to big new housing schemes?
• Investors hate uncertainty. Adding another hurdle to the planning system will discourage investors, as will having to add the cost of making payments to local people over an undetermined area.
• There are practical problems of measuring local consent or support, and therefore an increased risk of judicial review with consequent delay, expense and uncertainty.
• There are practical problems of delivering monetary benefits to households. What is the appropriate geographical area to cover? Would payments be made to everyone within a radius of the site, or just those affected by, say, visual impact or by temporary but significant truck movements during construction? Would the payments be made to freeholders or to the people actually living in the properties, or both? Would everyone get the same amount or should people get a percentage based on the size of their landholding, or based on how badly affected they are? What if people move in part-way through a year? Who in the household gets the money if there are multiple occupants? How much will the scheme cost to administer? It is easy to see how the costs could eat up money otherwise available to distribute. And what if there is local anger as to who is and isn’t benefited, or delays to payments while eligibility is debated or evidenced.
• Last but not least, it is only a windfall for those already living in the area – annual payments attached to particular dwellings could simply be factored into future house prices, pushing up prices across the area.

Leadership through policy

The planning system is not perfect, but it is the best means through which to balance national and local interests to deliver fair outcomes. 

The recent drift towards requiring developers to evidence “local consent” or “local support”, and towards seeing planning permission as something to be bought and sold, adds an extra layer of uncertainty to an already onerous planning process which will deter rather than encourage investment. 

Politicians should reconsider the direction of travel and return to a system where the government has the courage of its convictions when it comes to setting out its policy support for development, and backing delivery where development is appropriate and in the national interest.

For Catherine Howard's related article "Nimbyism, Yimbyism and Localism – is there a difference?" see here.

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