On 25th May, government published a paper inviting views on further action the government should take to speed up homes being built. It sees a 5 part strategy to achieve faster house building, including reforms to the planning system, supporting the growth of SME developers building small sites by tackling the key barriers they face – including ensuring timely planning decisions, and reducing regulatory burdens. But now there is a focus on the developer. There will be the requirement to submit a Build Out Statement with a planning application, notify LPAs before development is commenced through a Commencement Notice and report annually to LPAs on housing delivery through a Development Progress Report.
Perhaps very significant is the proposal to introduce a ‘financial sting’ for developers who are allegedly building too slowly. The government is exploring the possibility of introducing a new tool for local authorities: the “Delayed Homes Penalty”. This is supposed to be a ‘last resort measure’. It would be available to local authorities for development which falls materially behind pre-agreed build out schedules. Government is considering the following:
a) The Penalty would apply only to sites over a threshold size and only where there is evidence of a developer falling substantially behind a build out schedule, pre-agreed with the LPA.
b) Agreement and monitoring of build out rates which will require developers to pre-agree a build out schedule with the local planning authority before consent, provide a commencement notice before the development begins and then annual development progress reports.
c) If a site falls substantially behind the pre-agreed build out schedule in a given year (to 90% or less of the agreed delivery), then the developer would be required to justify the slower build out rate to the planning authority. If this cannot be shown to have been caused by an external factor – such as unusually severe weather, or an unexpected site issues – the developer could become liable for the Delayed Homes Penalty. (Relevant external factors would be nationally set out in guidance to be published later if this proposal is adopted).
Giles Moir, Director at Chapman Lily Planning, commented; this latest proposal seems to fly in the face of previous assurances to the industry that government is reducing the burden on developers and providing them with more certainty. This potentially adds more bureaucracy – the requirement to submit a Build Out Statement with the application, a Commencement Notice (which is already a requirement for CIL and Building Regulations) and then submit a Development Progress Report. So, during construction, should delays arise that the LPA are not convinced are genuine, LPAs will have the power to effectively ‘fine’ the developer for not sticking to the originally submitted Build Out Statement. Whilst issues such as unusually severe weather, or an unexpected site issues will be taken into account, it adds another level of risk and concern – certainly not encouragement and support.
