High Street Pressure

It seems like every day we hear of another High Street Chain filing for administration or bankruptcy. In 2018 (more than ever) the high street is under threat.

Our shopping habits have changed so drastically in the past 10 years that the retailers are not able to maintain pace with the technology that seeks to usurp them.

Take Amazon for example, this company founded in 1994 has grown to be worth 4.1 Billion in 2017 from an online bookstore and support for their kindle e-book reader platform to an online store that sells…everything (well almost).

Granted there is still something about going to see the product you are buying in person however the transaction itself is often now online with better deals to be had. I am as guilty as the next person in doing this. For the last two years my Christmas Shopping was a breeze, I didn’t have to go out in the cold or fight with the queues. I just sat at my laptop with my wife in front of a Sunday afternoon movie and logged onto Very and did everything there. It all arrived and was wrapped (in the paper also bought online) and sent with cards (also bought online).

Planning Policy (at least locally) however has not moved on. It is still stuck in the misty eyed image of Britain in the 30’s where you went and did everything in the high street. If you look at any planning policy for any town centre in the UK and compare it to the last iteration of that policy, or the one before that. Nothing has changed! In fact in Portsmouth they decided to make the City Centre Bigger! this notwithstanding a City Centre with 15% vacancy and a major retail development site that has been stalled since at least 2002.

Para 23 of the 2012 NPPF states: Planning policies should be positive, promote competitive town centre environments and set out policies for the management and growth of centres over the plan period. In drawing up Local Plans, local planning authorities should:
1. recognise town centres as the heart of their communities and pursue policies to support their viability and vitality
2. define a network and hierarchy of centres that is resilient to anticipated future economic changes
3. define the extent of town centres and primary shopping areas, based on a clear definition of primary and secondary frontages in designated centres, and set policies that make clear which uses will be permitted in such locations
4. promote competitive town centres that provide customer choice and a diverse retail offer and which reflect the individuality of town centres
5. retain and enhance existing markets and, where appropriate, re-introduce or create new ones, ensuring that markets remain attractive and competitive
6. allocate a range of suitable sites to meet the scale and type of retail, leisure, commercial, office, tourism, cultural, community and residential development needed in town centres. It is important that needs for retail, leisure, office and other main town centre uses are met in full and are not compromised by limited site availability. Local planning authorities should therefore undertake an assessment of the need to expand town centres to ensure a sufficient supply of suitable sites
7. allocate appropriate edge of centre sites for main town centre uses that are well connected to the town centre where suitable and viable town centre sites are not available. If sufficient edge of centre sites cannot be identified, set policies for meeting the identified needs in other accessible locations that are well connected to the town centre
8. set policies for the consideration of proposals for main town centre uses which cannot be accommodated in or adjacent to town centres
recognise that residential development can play an important role in ensuring the vitality of centres and set out policies to encourage residential development on appropriate sites
9. where town centres are in decline, local planning authorities should plan positively for their future to encourage economic activity.

This is all well and good however it is often mis-interpreted at Local Plan Making Stage as a ‘maintain the status quo’ as it fails to identify how LPA’s should respond to a town centre in decline.
In academia the solution has been talked about for some time, compaction. This theory postulated by many more intelligent than I ( http://www.reading.ac.uk/PeBBu/state_of_art/urban_approaches/compact_city/compact_city.htm ) encourages the creation of more compact and therefore more efficient urban environments in order to foster regeneration. When applied to town centre’s this would seek the re-drawing of boundaries to make the retail part of the centre smaller. The effect of this would follow a logical chain:

The centre is expansive with vacancies throughout

The boundary of the retail centre is redrawn making the centre smaller

The areas excluded are re-allocated as housing revival areas

The building owners seek to redevelop their properties within the new HRA’s

The existing retailers within the HRA’s move to the vacancies within the compacted town centre. If encouragement is required then CIL or S106 could be used from the development in the HRA to give rent grants of guarantee’s for retailers needing to move.

All of the above would accord with Para 23 of the NPPF but would require a change in practice by the individual LPA.

The same compaction process however can be applied to individual shops without LPA involvement or a radical change in policy.

A large (former BHS or Poundworld) for example in a town centre in decline is typically arranged over two or more stories.

S55(1) and (2aii) of the Town and Country Planning Act allows us to sub-divide that larger unit into say three smaller units by internal alterations only. The ground and first floors are sub-divided accordingly and the units are compacted.

Smaller units are easier to rent in a town centre than larger units as they are more attractive to a wider range of users.

Class G of Part 3 of Schedule 2 of the General Permitted Development Order 2015 (As amended) allows us to then to convert the new upper floor spaces into up to 2 flats above each retail unit.

3 x 2 = 6

Para 23 of the 2012 NPPF recognises the importance of residential within a town centre and that’s why Class G exists.

Whenever I speak to developers and they ask ‘what is your favourite permitted development route’ I always give the same answer ‘Class G’. Hopefully you can see why!

I want our town centres to have a purpose however this will never happen if we do not grapple with the problems of today and plan properly for the future. Shopping has gone online, banking is going online ( https://news.sky.com/story/full-list-of-natwest-and-rbs-branches-which-will-close-11151127 ). At this stage the planning profession is waiting for the next big name to announce its departure. But for the property Investor that departure could be the next big opportunity.

The Starting Position

Understanding the Starting Position is vital whenever setting up a planning game. It is the placing of the chess pieces on the board right at the start of our chess game and the order in which they can be played.

When determining whether a material change of use of land or buildings has taken place, what is the most appropriate physical area against which to assess the materiality of the change or, in short, what is the “planning unit”?
On the face of it, this is quite a simple question and the Court will generally look at it as ‘a matter of common sense’ using the unit of occupation itself as a starting point. However, the answer is often far from black and white and necessitates specific consideration on a case by case basis as a material change of use of a planning unit will often require express planning permission from the local planning authority.

The three tests

While the Court never intended them to become exhaustive tests to cover every situation, three tests for determining the planning unit were laid out by Bridge J in Burdle v. Secretary of State for the Environment, as follows:

  1. First, whenever it is possible to recognise a single main purpose of the occupier’s use of his land to which secondary activities are incidental or ancillary, the whole unit of occupation should be considered.
  2. Secondly, it may equally be apt to consider the entire unit of occupation even though the occupier carries on a variety of activities and it is not possible to say that one is incidental or ancillary to another. This is well settled in the case of a composite use where the component activities fluctuate in their intensity from time to time but the different activities are not confined within separate and physically distinct areas of land.
  3. Thirdly, however, it may frequently occur that within a single unit of occupation two or more physically separate and distinct areas are occupied for substantially different and unrelated purposes. In such a case each area used for a different main purpose (together with its incidental and ancillary activities) ought to be considered as a separate planning unit.

The first test – Ancillary use

The first test is intended to cover ancillary uses of land. Take, for example, a large retail store with a small area of office space used to facilitate the processing of the retail store’s paperwork, with both areas (i.e. the store and the office space) being within the same occupation. Under this first test, the whole of the retail store, including the office space, will be considered the planning unit.

There are, however, exceptions to this principle. In 2002, for instance, on an appeal from the Secretary of State, the Court ruled against Harrods’ application for a lawful development certificate for the proposed use of the existing roof of the company’s store in Knightsbridge for a helicopter landing.
The helicopter landing was to be used solely by the owner of the store in connection with his role as chairman and his work in directing the day-to-day operations of the store. In making his decision, the Secretary of State regarded “ordinary and reasonable practice” or what was “normally done” at inner city department stores and decided that the use of the roof as a helicopter landing was not incidental or ancillary to the use of the department store. The Court refused to overturn the Secretary of State’s decision and considered that he was entitled to come to that conclusion meaning that the store and the roof were separate planning units.

The second test – Composite use

The second test is intended to cover ‘composite’ uses of land. Take, for example, use of land as a vehicle dealership including elements of retail use, storage, offices and staff facilities, all within the same occupation. Under the second test, the entire vehicle dealership will be considered the planning unit.
However, that is not to say that you can intensify, cease or add a use so that there is a material difference in the overall mix of uses operating within a composite use planning unit without planning permission. Taking the above example, the addition of a substantial car repair service at the vehicle dealership may constitute a material change of use of the planning unit necessitating planning permission.

The third test – Separate planning units

Finally, the third test is intended to cover separate planning units within the same building. Take for example individual flats within a residential block, under the third test each flat will be considered a separate planning unit. This approach was confirmed by the Court in a case concerning the Metro Centre in Gateshead where each individual shop was considered to be its own planning unit.

Physically separate and distinct areas, however, will not always be considered separate planning units, provided that they are used for similar and related purposes. For example, in 1997, the Court held that an Inspector was entitled to conclude that the co-ordinated pattern of the use of five parcels of land for markets overrode their physical separation and disunity of ownership such that they were in fact one planning unit. The parcels of land in question were owned by three separate parties and were, in places, split by a main road and a small slither of other land.

The examples given above can be difficult to reconcile. Accordingly, the answer to the question of what is the planning unit, as noted by Bridge J in Burdle, ‘must be a question of fact and degree’ to which the decision taker applies his or her mind on a case by case basis.

The Players in the Game

When talking to business leaders, which strangely I do…a lot, one of the questions I ask them is ‘do you know with certainty where you exist within your own business’. It is a point of fact that many Small and Medium Scale Business Owners don’t actually understand their own role. They are a Polymath, a Jack of all trades but master of none of them, and they spend their time diving between being a manager, accountant, marketeer and business development specialist.

Knowing where you exist within the Planning Game is equally important. Your role defines what you can do and what you can achieve within a system that is defined on role’s and responsibilities. The issue is both how the system has evolved and how the different players on the pitch get to interact within some tightly defined boundaries.

The evolution of the planning system as it is has happened in stages with different parts of the system being bolted into the game as time has gone on (much like the way the rule’s for Formula 1 are altered every year). In the next section of the book, a Brief History of Planning, I will do a deeper delve into the formation of Town Planning in the UK and why the playing field is stacked in the way that it is. For right now lets understand the players in the game and where they sit on the metaphorical pitch.

Drawing an analogy between the Planning System and a game of football is a useful tool to understand the protagonists in the game and how they interact with each other. Kensy Cooperrider, Dedre Gentner & Susan Goldin-Meadow in their article Spatial analogies pervade complex relational reasoning: Evidence from spontaneous gestures, noticed that over the course of their explanations, participants’ gestures often cohered into larger analogical models of relational structure. Analogy’s are useful to allow us to understand complex processes and through storey telling we can rationalise the illogical relationships between people and process.

With this in mind:

Picture a game of Association Football. There are two teams on the pitch both trying to score a goal. There are fans within the stadium cheering for the home team and for the away team. There is a referee keeping track of the clock and making sure the game is fair and of course a football (taking a beating from all sides). Now lets put some labels on our protagonists and draw comparisons.

The Home Team

Our Home Team are the planning officers and councillors at the Local Planning Authority. Its their ground and they want to be in charge. They are here to win the game (they are at home after all) and their strategy is geared to secure this.

Strategically the Home side is easy to predict as you have the ability to watch other games before you get to play them. You can see where their defensive weaknesses are before you step onto the pitch and you can (to a certain degree) predict their reactions based on this however the home side are big and strong and can boot the ball out of the park if they feel the need.

To understand the home team advantage you can do some scouting of your own. Planning Authorities have to publish planning applications and their results so you can see what they like and what they don’t like. You can also see how they play the game. Do most of the applications go out of time or do they stick to the clock? Do they viscerally hate a particular type of development (in Portsmouth that is Dormer Windows and Hip-To-Gable Conversions) or alternatively do they love to approve a certain form of development? In Croydon right now the game is stacked in favour of large houses being converted to flats whereas Hammersmith and Fulham hate the idea of losing HMO bedrooms as they are an important part of the housing stock.

Understanding how the home team play dramatically changes your ability to win the game effectively. If you are essentially playing with the Home Team instead of against it then you will both be playing for the same outcome and, in effect if the Planners and the Council think they have won and you get what you want out of the arrangement then fundamentally everyone wins the game!

In terms of the behaviour of the Councillor’s when they are ‘on the pitch’ you can also do some scouting there as well. Planning Councillor’s play the game in a planning committee often making multi-million pound decisions in 45 minutes or less. These planning committee’s are open sessions of the council that anyone can go and watch. In the main most applicants consider them dreary and tedious however the astute developer will be watching the players in action and identifying who they need to mitigate against within the unfolding game. For example there are particular Councillors who, for their own reasons, will never approve an HMO. They are allowed to have these particular views as long as they approach every application with an open mind – that is they can be persuaded for the right scheme. If an applicant knows this they can either isolate that player from the rest of the committee by making sure they never really have a case to answer or attack that player directly with a superior scheme that is highly compelling. Either way the scouting identifies which councillor they need to target in order to influence the result.

The Away Team

The Away Team are the applicants, their consultants and specialists. The away team are intruders on home turf, they want to win as it will give the home team a bloody nose however they are more agile and flexible in terms of strategy.

Strategically the away side has a bigger range of substitutes in its arsenal they can go to their bench and get any number of specialist players to counter the home teams strategy. The away side is smaller and more agile and is essentially read as the underdog in any encounter (even the bigger teams like Barrets and Taylor Wimpy). It is more difficult to predict the reactions of the away team and they are quick enough to react to changes in circumstances.

As an applicant your ability to quickly react to the home team is key to success. Later in this book we will talk about the development ecosystem and the team you should be seeking to build in order that you can react to changes in the circumstances you may face through an application life-cycle. Like with any football team it is difficult to buy in a new player mid way through the game, or even through a season, and so setting up your team right at the start is critical.

The Referee

On the Pitch the ref makes sure fair play is done. The referee in the planning game is the Planning Inspectorate. Their word is law and the players (unlike a real game of football) don’t tend to argue with the ref unless absolutely necessary. That’s when the video ref (the High Court) gets involved.

The Referee follows the rules, to the letter of the law, they are there to make sure that the rules are followed. Sometimes we disagree with a ref’s decision but in reality we have to abide by what they say. They are the higher power.

Within the real planning game the Inspectorate is wholly independent. The Planning Inspectorate for England and Wales is an executive agency of the Ministry of Housing, Communities and Local Government of the United Kingdom Government with responsibility to make decisions and provide recommendations and advice on a range of land use planning-related issues across England and Wales. They are not attached to either the planning authority or the applicant and are in fact there to reassess the judgement and determine if that judgement was correct by either allowing the appeal (and granting planning permission) or dismissing the appeal by upholding the original decision. They can also add to or remove reasons for the decision so an appeal to the ref should be carefully considered.

The Ball

In simple terms the ball is the development site in question. To be frank this will take a kicking from all sides until a clear winner establishes itself. Either that or it will get booted out of the park in an refusal or find itself buried in the back of a net in an approval.

The Spectators, Home and Away.

On the outside of the pitch and watching the game unfold are the spectators. Like with any game of football they have power and influence over the progression of the game on the pitch. Think about every time you have put an application in and the home fans (the objectors) have rallied and issued 100’s of objections. Those shouts from the crowd have a real effect at a football game because it bolsters the will and spirit of the players. In exactly the same way objections en-mass within the planning game weakens the applicants argument and strengthens the LPA’s resolve.

The louder the shout the more likely it is that the matter will go before the committee by being ‘called in’ thus bringing the Council’s reserve team – the Councillors – onto the field for a bit of extra time planning decision making.

There are a few different way’s in dealing with, or using, the crowd during the application life-cycle and I will discuss this further later in this book but for right now consider the question ‘is it better to be one voice shouting against the noise or shouting with it’.

The Managers!

The Home Manager is the Head of Service at the Planning Authority
The Away Manager is the Applicant.

The Managers direct the play on the pitch calling out tactical changes and rallying their players to score a goal. Much in the same way our managers within the planning game give direction to the field of play and focus the players attention. Managers can sway a game dramatically just as a Head of Service can turn a decision on its head or an applicant can suddenly decide on a new direction.

The immortal quote from Kenneth Wolstenholme’s BBC TV commentary in the closing moments of the 1966 FIFA World Cup Final sum’s up the effect of the managers best in my view.

“And here comes Hurst! He’s got…
Some people are on the pitch! They think it’s all over!
It is now, it’s four!”

A Manager at an LPA can literally end the game in an instant if they take a dislike to an application or if it’s in line with their own strategy for winning the game. Manager’s at council’s think long term and are there to win the season. They are assessed on a peer review basis and by the Planning Advisory Service and can be sent off by the Ref (The Inspectorate) if things are going wrong.

Knowing where and who you are in the planning game is an important step in your journey through the development system. Stay tuned to more insights on the site.