Project Nutcracker: The nightmarish paper-chase of DCO examinations is no way to consent infrastructure

This article is the third of our in-depth critiques of ideas for speeding up the consenting of UK infrastructure. See our introductory article [here] for the impetus behind this series, summed up in the famous Prayer for Serenity.

Our previous article [here] looked at the short-comings of the new DCO fast-track regime. The central idea behind the fast-track is that if applicants can show that they have agreed most issues with the key statutory consultees during the pre-application stage, they may be given a slightly shorter examination and decision period. Those key consultees will vary from application to application, but may include the local councils, Environmental Agency, Natural England, National Highways, the Marine Management Organisation, Network Rail, water companies, etc.

Even for non-fast-track, PINS expects most applicants to default to the new "standard" service which also entails more involvement by PINS in the pre-application stage (see our article [here] on the new Prospectus for tiers of service). The aim seems to be for PINS to "facilitate" the "resolution" of issues with key consultees before the application is submitted, in order that the examination is "smoother and potentially faster."

The concern I have with all of this is that it doubles down on what I see as one of the biggest problems with the DCO regime – its over-reliance on the key parties reaching agreement.

The reaching of agreement generally boils down to the applicant conceding to whatever statutory consultees want, regardless of how reasonable or necessary it is to mitigate the impacts of the project. Applicants fear that PINS will otherwise struggle to recommend approval of their application.

The DCO regime largely operates as if these statutory bodies are the experts on impacts, always impartial and always acting in good faith. The applicant and their expert advisers are, by contrast, viewed with a degree of suspicion when they push back, however much evidence they present.

The flaw with this approach from the perspective of delivering UK infrastructure is this: statutory consultees are not universally reasonable; they have their own agendas and naturally view issues through their particular lens. They face no repercussions if the positions they take lead to delays, refusal or unnecessary expense and difficulty in project delivery. There isn't even any way to quantify or monitor this negative impact.

The fact that the work of the key statutory consultees is now to be fully-funded by applicants is supposed to improve the operation of the DCO process. However, I can easily see this back-firing.

I can understand why PINS thinks more and earlier agreement over key issues is the answer. Their Inspectors are buckling under the weight of trying to get to grips with complex issues amidst a deluge of paper delivered at multiple deadlines in a 6 month examination period. Compared with a traditional public inquiry, the DCO process is a sprawling and unwieldy beast. For Inspectors to wade through the thousands of pages of contradictory submissions and come to the view that, say, the Environment Agency is being unreasonably conservative in its assessment of ecological impacts and its demands for mitigation measures, is going to be uncomfortable.

But I'm reminded of the saying: "If the only tool you have is a hammer, you tend to see every problem as a nail."

We need to find other tools to enhance the consenting process besides agreement.

1.    THE PAPER-CHASE SET UP BY DCO EXAMINATIONS

The push from PINS to agree all issues with the key consultees before or during DCO examinations is driven, it seems to me, by the fact that the format of the DCO examination process (primarily through exchange of "written representations") is ill-suited to the job of examining major infrastructure projects.

Outside of the DCO regime, Government guidance[1] recommends the use of a written representations procedure for only the simplest cases, where "the planning issues raised […] can be clearly understood from the appeal documents and a site inspection […]" and "the issues are not complex." For planning appeals of any complexity, Government guidance recognises that planning inquiries are the best way to efficiently interrogate evidence. In particular where: " the issues are complex (for example where large amounts of highly technical data are likely to be provided in evidence)" and there is therefore a "need for the evidence to be tested through formal questioning by an advocate [barrister]."

When the DCO regime was brought in, the assumption may have been that because the need for each class of infrastructure was set out in National Policy Statements, the DCO examination would only need to consider minor issues – the sort which might easily be addressed by exchange of written representations.

However, this is very far from how the system is working. It is incredibly helpful to have the need for classes of infrastructure set out in Government policy and therefore not a matter of debate. But this still leaves huge issues to be weighed up and debated: the fundamental question of whether the proposed development is in an appropriate location, and whether the mitigation of impacts proposed is adequate.

Trying to consider these things rigorously via exchange of written representations (with a scattering of hearings) is a huge challenge for all involved.

The rigor and efficiency of the traditional planning inquiry format

I know that the DCO regime was brought in partly because there were a few excessively long public inquiries, which lasted 2 or 3 years (eg Terminal 5 at Heathrow, and Sizewell B nuclear power station). But these were always the exception. Their length was driven largely by Government policy not being fixed. The safety of nuclear power and the UK's need for it instead of coal, for example, were the key issues debated during the Sizewell B inquiry in the 1980s – with representatives from the Coal Board fighting their corner fiercely. The DCO regime has helpfully fixed this by bringing in National Policy Statements.

Poor control by those running these mega inquiries (failing to limit the evidence) was also no doubt another factor. The 6 month statutory limit to DCO examinations now prevents such open-ended timetables.

Most inquiries, however, (for overhead electric lines, power stations, roads, airport expansions or fracking) have never taken more than a matter of weeks or couple of months, and still today take no longer than that for the infrastructure projects falling outside the DCO thresholds. They also do not involve the vast amount of pre-application consultation that DCOs do.That is why, given the choice, most of my clients opt not to use the DCO regime[2]. A public inquiry will almost always be faster, cheaper and more efficient than using the DCO process.

Why is this?

Where a public inquiry is held, a "statement of case" and witness "evidence" to support it (on the key issues only, such as traffic, noise, visual impact etc) is exchanged between the parties prior to opening of the inquiry. That evidence is then interrogated by barristers who cross-examine the witnesses on it in front of an Inspector. Weak and unjustified positions are thereby exposed. The Inspector takes notes, and writes up a report and decision, or sends the report and recommendation to the Secretary of State for a decision if directed to do so. This is very different from the sprawling format of a DCO examination.

The DCO regime's iterative and non-adversarial format makes the drawing of conclusions difficult

The DCO examination makes no attempt to limit evidence or arguments to those made in initial representations. In fact, the whole concept of "evidence" (given by an expert who stands behind it as an individual) is missing. 

Any individual or group can participate in a DCO examination, make written submissions online, appear in person at hearings via Teams, bring up any points they wish to at any of the multiple deadlines during the 6 months, and all without the prospect of being cross-examined on the veracity of their position by a barrister. PINS Inspectors can and do ask questions of those who appear at hearings, but there is (deliberately) no adversarial oral interrogation of objectors. Any difficult issues tend to be taken away, with the party agreeing to come back in writing. In practice this limits the ability of oral questioning to reveal the weaknesses of the points being made. All of this, of course, goes for statutory consultees as much as it does for the public.

Inspectors ask rounds of (literally) hundreds and sometimes thousands of written questions, probing issues of interest or concern to them or other parties based on the voluminous body of documentation submitted to date.

This turns the examination into an almighty paper-chase – with all parties giving written responses to each other's responses to the last round of questions, and then written responses to those responses. Such responses, and the questions asked by Inspectors, often end up lagging behind the latest submissions, which adds to the confusion and sense of chasing one's tail.

The rigor of the public inquiry format is absent. DCOs are more of a free-for-all, with periodic attempts on the part of the applicant (often at the request of the Panel of Inspectors) to present trackers of issues with links to the various submissions in order to try to keep on top of the positions of all of the parties.

Unlike inquiries, there is also a huge amount of time spent debating the wording of the DCO itself and the mitigation measures which are to be committed to within it. Extensive submissions are made by all parties on the precise wording of conditions and 'control documents' (construction environmental management plans, traffic management plans, design principles etc). There is usually much debate about how those measures relate to the extensive environmental assessment of impacts carried out by the applicant. The equivalent process in a planning inquiry would be a single roundtable session one afternoon.

At the end of the 6 months, the Inspector (or Panel of Inspectors) is left with tens of thousands of pages of submissions to wade through in order to come to make a recommendation to the Secretary of State to approve or refuse, and on what terms.

2.    NO WONDER PINS INSPECTORS PRESS THE PARTIES TO AGREE 

A very human reaction

On a human level I can see why PINS Inspectors have fallen into the habit of relying so heavily on agreement. They are not barristers, used to digesting vast amounts of written material, and forensically questioning both sides to reach a conclusion. Even if they were minded to do so, the unwieldy format of DCO examinations makes such rigorous analysis and focus very hard. It must be an incredibly stressful job, when one party is telling you black and the other white, based on pages of complex arguments and responses to responses to responses. It is human nature to push for a way out through agreement. Who wouldn't do the same?

The ever greater push for agreement in the pre-application phase is symptomatic of a misguided approach

What is clear is that this mindset, which PINS currently applies to DCO examinations, is now also being put forward as the right way to approach the pre-application phase – the solution to making DCO examinations "smoother and potentially faster" (a phrase used several times in the PINS Prospectus). The purpose of all of the new pre-application documents, meetings and procedures now required, seems to be for PINS to go on the journey with the applicant from the project's earliest days: to get an understanding of all of the issues and risks, and perform a role in the pre-application phase not unlike the one they perform in the examination – encouraging parties to go away and "resolve" issues. In practice this means the applicant conceding points if they possibly can, regardless of whether it is reasonable or necessary to do so, or will increase costs or difficulty of project delivery.

I assume the hope is that this will reduce the increasing number of cases where PINS recommends refusal due to unresolved objections.

Such recommendations often lead the Secretary of State (being naturally more motivated than PINS to get infrastructure built) then having to ask additional questions post-examination in order to get comfortable that those objections are not in fact sufficient reason to refuse. The Government has come in for a lot of criticism for delaying DCO decisions in recent years, but in most cases the Secretary of State is trying to get enough information to justify approval in the face of a recommendation to refuse despite strong National Policy Statement support.

3.    FULL FUNDING OF STATUTORY CONSULTEES IS NOT GOING TO HELP

It won't surprise you to hear that the new duty on applicants to fully fund the costs of the key statutory consultees throughout the DCO process will not, in my view, help in getting issues "resolved" and infrastructure consented.

It would only help if it were the case that statutory consultees (local planning authorities, local highway authorities, the Environment Agency, Natural England, the Highway Agency, the ambulance service etc) were infallible, entirely reasonable and unbiased arbiters of the impacts of a project on the aspect of the environment that they look after. They are not always so, I'm afraid. Albeit for reasons in one sense noble (the desire to maximise funding and in-kind benefits when other public funding is scarce), they may be motivated to exaggerate concerns and impacts. In other cases, consultees are simply being unnecessarily conservative - driven by good faith but unjustifiable desires to reduce risk of impacts to zero.

4.    THE PROBLEM FROM A UK PERSPECTIVE

The over-reliance of the DCO regime on agreement is a problem not just for individual applicants but for the UK if it wants to build more infrastructure. It is an approach which in practice forces applicants to bend to the demands of statutory consultees in order to get consents. Consultees will always want more – more money, more mitigation, more monitoring, more contingent mitigation, more certainty (which they will say can only be achieved with all of these in place). It isn't their job to worry about the net effect of this, but that net effect is more refusals or a bigger price-tag for UK infrastructure. We cannot afford this. We are in a global race to enhance our infrastructure. There will come a point where developers will simply go elsewhere – a point recently made in this FT article [here].

5.    WHAT IS MY SUGGESTED FIX FOR DCO EXAMINATIONS?

It's difficult. I can see that having a process which makes direct participation easy (without the formalities of an inquiry) may be seen as the most democratic way to examine proposals. Rowing back from that would be politically tricky…although of course we still accept it in the case of the many public inquiries that still occur for projects not meeting the DCO-thresholds[3].

But to cope with the DCO format and make it work better, PINS needs some help. They need more tools, besides pressing for agreement.

Two objectives: limiting issues and adding some cross-examination

I suggest that the over-arching objectives of any reform should be:

1. to limit the issues being examined to just the key issues which in PINS' reasonable view might otherwise lead them to recommend refusal. This would mirror one of the merits of planning inquiries, that it is not all issues but just the particular reasons for refusal by the local planning authority that are the subject of inquiries[4]; and
2. introduce an element of cross-examination of witnesses on fixed evidence in relation to the difficult issues, so that they can be properly and efficiently interrogated. Twin this with less deadlines and a focus on quality, not quantity.

Taking a few of the good practices of public inquiries in this way, PINS Inspectors might have more time and space to do the most important part of their job – to understand and weigh up the key issues in order to come to a view where parties disagree. This would avoid leaving this job to the Secretary of State post-examination.

Possible ways to implement these objectives

I am open to other suggestions, but ways to achieve these objectives could include:

1. Requiring PINS to write up and issue a report at the start of the examination, setting out in detail the matters which it considers necessary to examine. This would be based on PINS' review of the application and the representations received upon it. The issues that PINS wishes to examine should be limited to those which it considers might otherwise be grounds for a recommendation of refusal despite the strong policy support in National Policy Statements. All other matters raised by objectors in their representations should be expressly out of scope of the DCO examination, on the basis that PINS has all the information it needs in order to come to a view and write up a recommendation on those points. Something like this was always intended by those who originally devised the DCO regime, because PINS is required to issue a list of "Principal Issues" at the start of the examination. However, in practice the lists issued are so broad and high-level as to be pointless, and in any event PINS never then limits submissions or subsequent questions/responses to only those issues.
2. For examinations (certainly the more complex cases) I might appoint a lead Inspector who is an experienced senior barrister (ideally a planning barrister) or former judge. That person would take all representations into account, but have the confidence to limit questions to the issues that go to the heart of the case.
3. This senior Inspector might guide the work of the other Inspectors to ensure a more laser-like focus, while providing them with reassurance that this will not increase risk of judicial review (the fear of which may be a driver of the less focussed approach of today). Fewer Inspectors might in fact be needed if this more rationalised approach were adopted.
4. Encouraging PINS to require the submission of witness evidence on the most complex and contentious topics, and allow cross-examination on this evidence by barristers acting for the sides in disagreement, or acting for PINS itself.

The above would need little if any changes to the Planning Act 2008 and secondary legislation. Much of it could be achieved simply through Guidance issued from Government direct to PINS, with related tweaks to guidance and advice to applicants and other participants.

6.    Need for a cultural shift within PINS

Just as important as any of the above, if we want more infrastructure consented (and on reasonable terms which facilitate delivery), we need PINS to adopt a mindset more like that of the Secretary of State. PINS needs to look at unresolved objections from a more bullish, pro-development stance (justified by the National Policy Statements), with a healthy dose of scepticism directed towards objectors, not just applicants.

In the early days of the DCO regime, it felt like PINS had the balance right. They saw their job as facilitating the consenting of infrastructure (in line with the strong policy position in the National Policy Statements). They placed greater trust in the positions taken by applicants and what applicants told them about what was practical and deliverable (after all, that is the area in which applicants are the experts). Over time the balance seems to have tipped the other way. This isn't something we can fix by changing the law. It is a cultural issue requiring a cultural change.

Custom and precedent has led to a direction of travel away from a focus on key issues, towards the tracking of all issues raised by all parties, and their "resolution". Failure to reach resolution and get a timely consent is blamed on applicants.

Compare PINS' first round of questions in relation to the Hinkley Point C DCO [here] (3 pages, 17 questions), with the first round of questions for the Sizewell C DCO, running to hundreds of questions, set out in 6 Parts: Part 1 (62 pages) [here], Part 2  (72 pages) [here], Part 3 (60 pages) [here], Part 4 (94 pages) [here], Part 5 (32 pages) [here], and Part 6 (40 pages) [here].

If you start off with that many questions, the responses-to-responses-to-responses soon mushrooms to something unmanageable. Having led the consenting of both projects (ten years apart), I certainly do not feel that the way the Sizewell C proposals were examined was better, or led to a consent with better control of impacts, than Hinkley C. It was just vastly more onerous. We need a reset, but overcoming accumulated custom and practice is harder than any change in law.

None of this article is intended as a criticism of the huge efforts of PINS and its individual Inspectors, who do their best to make the DCO system work today. But the system is creaking. For simpler applications it just about works, but it still involves far more paperwork and hours than should be necessary.

As a nation we simply do not have enough qualified professionals to staff a system this hours-hungry if we want to consent the number of projects coming through. We need to design something that consents projects not just faster, but with fewer hours spent on the consenting process overall.