UK Cities: Levelling the playing field

COMMENT Of several major government policies, levelling up continues to receive the strongest public backing, with a poll of voters showing a higher level of support for levelling up compared with changing corporation tax, immigration and leaving the European Union. While at the time of writing both Liz Truss and Rishi Sunak are vying to become prime minister, it is clear that whoever takes on the role must realise the importance of levelling up. That’s not in the political sense, but in real terms of addressing regional disparities and driving economic growth – improving lives and communities across the UK. The Levelling Up and Regeneration Bill is continuing to make its way through parliament, with proposals currently being examined at the committee stage. The Bill has been heralded by the government as a legislative tool, “to make provision for the setting of levelling-up missions and reporting on progress in delivering them”. It includes measures encompassing devolution, regeneration and planning. Some of the Bill’s proposals have the potential to drive real change when it comes to levelling up. Others, however, can be seen as in conflict with it – potentially diverting more power nationally, rather than towards a local level.   Localism vs national policy One of the changes put forward in the Bill is the creation of a “neighbourhood priorities statement” – intended to provide communities with a simpler and more accessible way to set out priorities and preferences for their local areas. These statements will need to be considered by local authorities in local plan preparation. There are also provisions to introduce a “street votes” system – allowing residents to propose developments on their street and vote on whether they should be given permission. On the surface, these proposals can be seen as ways to promote localism, providing communities with more of a say over development and design. However, other parts of the Bill can be read in opposition to this – reducing the influence of local democracy in key aspects of planning decision-making and giving primacy to national policy. If enacted, new clauses in the Bill would introduce a requirement that determinations must be made in accordance with the development plan, together with national development management policies, unless material considerations strongly indicate otherwise. In the event of conflict, the latter will have primacy; national policy will trump local policy. There is a risk that by pulling in two ways, the development process and planning decision-making could become more complex, while derailing one of the key aims of levelling up: giving regions and local government the ability to manage their own destinies. Rather than seeing this as a barrier to levelling up, establishing a set of well-articulated national development management policies and giving those policies primacy could be an opportunity to deliver a more explicit and clear message to local authorities, developers and land promoters. The consistency gained as a result of this could aid levelling up, with the government simplifying local plan-making and establishing a blueprint for developments. Infrastructure at the heart of levelling up The Bill also proposes a new Infrastructure Levy (IL) to replace the Community Infrastructure Levy (CIL) in England, with the exception of mayoral CIL in Greater London. Having the means to deliver large-scale infrastructure is crucial to any levelling up agenda, with local authorities able to use the funds generated for a wide range of projects, including transport infrastructure and healthcare services. Having the funds to make these improvements could bring social, health and economic benefits to communities, while also unlocking troublesome development sites where infrastructure may cross authority boundaries – on roads or rail links, for example. While there was uncertainty over the future of Section 106 when the Bill was first proposed, it is now clear that it will play a continuing role. Section 106 obligations will be a means of securing site-specific, “integral” infrastructure, as well as continuing to support the delivery of the largest sites where flexibility around in-kind infrastructure provision is essential. There is no reason that the new IL and Section 106 cannot work together in harmony. If combined effectively, the two systems could enable local authorities to bring forward the on-site and off-site infrastructure that is key to levelling up. The new IL will be mandatory, unlike CIL, where there has been sporadic take-up, especially outside major urban areas.  However, it won’t apply to the whole of England from the outset. Rather, a “test and learn” approach is going to be adopted through which the new IL will be rolled out nationally over several years. In a positive move, it will be possible for affordable housing to be funded through the IL – allowing for greater flexibility in its delivery, which is likely to give rise to market differentiation between different local authority areas. The IL will be charged by reference to land value – another difference from CIL, which has been met with broad support. However, the Bill sets out a framework only, with the detail to be worked through via secondary legislation. Development viability will remain a key consideration, and how the levy is to be calculated and paid needs careful thought – especially on schemes such as build-to-rent, where working out the gross development value can be more complex and there may be no asset sale owing to the long-term investment that is characteristic of such schemes. More than legislation We have already seen amendments to the Bill, including plans to combat nutrient pollution. Political uncertainty has given way, however, to a period of stasis, with the next committee sitting due on 6 September 2022 – the same day a new prime minister is likely to take office. It is unclear when the Bill may land on the statute books. Even then, it will only be an overarching legal framework, with the process of bringing forward secondary legislation and policies likely to span months – even years. Whoever becomes prime minister has the opportunity to ensure the Bill’s proposals achieve the aim of levelling up, by listening and understanding the evolving needs of different regions, and providing the public and private sectors with the tools they need to deliver it. The long-term success of levelling up hinges on more than just introducing legislation. It requires a collective effort, from the government, local authorities and businesses alike, with the fundamental aim of improving not only the physical landscape, but also people’s lives across the UK. Sam Grange is legal director at Shoosmiths