NSIPs and housing: implications of the Government's recent "Fixing the Foundations" announcement

The Government’s productivity plan

As part of the Government’s ‘Productivity Plan‘, on Friday 10 July 2015 HM Treasury published a ninety page document entitled, ‘Fixing the foundations: Creating a more prosperous nation‘. The publication has been introduced in an effort to boost UK productivity growth and it contains a range of reforms targeted at injecting greater flexibility into the existing planning regime.

Within the reforms, a significant proposal is the creation of a right for major infrastructure projects with an element of housing to apply for planning through the existing Nationally Significant Infrastructure Projects (NSIPs) regime. This article examines the commentary that has already been generated on incorporating housing into NSIP applications and the key issues that would require resolution for the proposal to be implemented as planned.

Current NSIPs regime

At present, there are specific categories of development within the Planning Act 2008 that qualify as NSIPs. Currently the construction and extension of dwellings are not permitted as part of these.

“Element of housing”

Despite being arguably the most significant aspect of the reforms, there remains a large degree of uncertainty as to what the concept of an ‘element of housing‘ will mean in practice. The use of the term ‘element‘ implies a part of rather than the whole of a scheme, and so we read this as allowing mixed use schemes, and developments that require housing associated with the main development but not schemes wholly comprised of residential development. However, we may be surprised, as lobbying has proposed that all developments above a threshold of around 2,000 or 3,000 dwellings should be included, so an element of housing could mean housing, with any other development, such as a new school, link road or open space, which defines any major housing development.

As to the types of the project that might utilise this new regime, if it is confined to schemes with an element of housing, it is likely that the proposal would be of the greatest popularity with commercial and business mixed use schemes. Very few projects of this nature have currently been developed as NSIP’s, with London Paramount (a North Kent theme park) being the only presently reported scheme. On reviewing the matters falling within this category, including leisure, tourism, conferences and sport, it is clearly conceivable that such schemes could incorporate housing as part of their wider development.

In addition to commercial and business industries, projects in sectors such as transport and energy could similarly benefit from the inclusion of housing. The recent case of Hinkley Point C is an excellent example of this, as concerns were raised as to whether temporary accommodation for workers could be included as part of the NSIP application. Under the new regime this is unlikely to be an issue.

Housing benefits and drawbacks

It is clear that there has been strong industry backing for housing to be incorporated into NSIPs. Speaking at a recent BPF event, Philip Barnes (Barratt) stated that this would ensure “a major and certain supply of housing projects to invest into” Similarly at Osborne Clarke’s Planning Seminar in June, Martin Kingston QC declared that “NSIP regimes could be the answer for delivery” of large scale housing developments.

Compulsory purchase

The most important benefit that could be derived from the regime is the use of compulsory purchase provisions. Once the consent order has been approved (provided reasonable attempts to negotiate with landowners have failed) the provisions can be utilised to unlock land that would previously have been unavailable for development. The CPO rights could be employed through a General Vesting Declaration (GVD) which would enable the acquisition of all interests in the affected land (including unknown interests) through a single process rather than fragmented transfers of individual parcels.

Pre-application consultation

In addition to the above, other suggested benefits include the structured consultation process. Whilst it is noted below that NSIPs are often rebuked for their lack of localism as compared with local authority applications, the strict consultation requirements arguably assist in securing appropriate community engagement. Equally with the bulk of the measures announced in the ‘Fixing Foundations’ publication focusing on the speed and ease of the planning process, it appears that local input is becoming increasingly diluted even within the conventional planning regime.

Frontloaded procedure

To turn to the counter side, there are various drawbacks associated with the NSIP process. Despite a strict timetable helping to ensure speedier decisions, the procedure still remains considerably frontloaded. As noted above, significant stakeholder engagement is required at the pre application stages. This often results in a large amount of time, work and costs being invested prior to the actual submission of the application. In our experience, rigorous consultation is required from the very outset. PINS specifically emphasise this as a core requirement of the validation checklist; this being a key document that aids their decision of whether to accept an application for examination.

Community engagement

Objectors have similarly voiced concerns that even with the extensive consultation regime, the NSIP process does not provide a commensurate replacement to the level of community input achieved under the conventional planning process.

Given the mixed views, it is hardly surprising that the Government has opted for the middle ground rather than opening up the process to all large scale housing developments. The current proposal may signal a ‘testing of the waters’ before a future introduction of a full scale housing category of NSIPs.

Summary

• The proposal is likely to be largely welcomed by the housing industry, given the previous calls for a fully-fledged category of housing NSIPs.
• The NSIP process boasts a variety of benefits for housing developments including the CPO powers and extensive community involvement. 
• The central issue for Government resolution will be to determine what an ‘element of housing’ actually comprises.

This represents our initial observations on the Government’s proposal. Should you wish to develop these issues as the reforms progress, we would be more than happy to assist.