The best laid plans
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14 October 2013
Greater political interference and the emergence of a clear North/South divide in government planning policy is causing major headaches for lawyers and their clients. Julia Cahill reports.
If Bill Gates decided to relocate Microsoft to London and had his heart set on building new headquarters on Ludgate Hill, SJ Berwin partner Patricia Thomas suggests that the City might consider moving St Paul's Cathedral for him. Call in Lords Foster or Rogers to produce a ground-breaking design and he'd be laughing.
She may be exaggerating, but after more than 20 years in the planning business Thomas knows it has a cunning knack of surprising.
Compare her experiences in London with those of her northern counterparts and not only is there evidence of conflicting but clearly demarcated policies for the North and the South, but greater political interference is making planning policy highly unpredictable.
Thomas' experience of acting for the City's Baltic Exchange - a financial market for shipping and cargo - is a prime example. After the latest twist in this curious tale, her client's former home - the 1903 Grade II* listed Baltic Exchange building, bombed by the IRA eight years ago - is almost certain to be eaten up by Lord Foster's "erotic gherkin".
On 20 July, the Corporation of London's Court of Common Council agreed planning permission for the 600ft tower. The decision merely rubber-stamped the earlier recommendation by the corporation's planning and transportation committee, but sits uneasily with government policy - Planning Policy Guidance Note 15 (PPG15) aims to protect Unesco-designated world heritage sites such as the Tower of London, which gherkin protestors say will be adversely affected by the development. Prepared by the Government after public consultation, PPGs are not binding or intended to have legislative force, but they do explain statutory provisions and are statements of national policy.
The exchange was also protected under the strict controls of the Planning (Listed Building and Conservation Areas) Act 1990, until English Heritage agreed that consent could be given for its loss.
And new owner Kvaerner's application to knock it down and start from scratch has hit on a winning formula - the Foster tower's would-be tenant is expanding reinsurance giant Swiss Re.
"The Corporation of London is so keen to see international companies stay in the City that that factor is outweighing listed building legislation," says Thomas.
Fearful of losing big companies to the Docklands, the City is changing its planning policy to allow the first tall building to be built in the Square Mile since the 1970s.
But the Corporation of London claims that the Baltic Exchange has misunderstood its position. A spokesperson says that the extent of repair necessary to restore the building means that it would not retain its former glory. "This case has no impact upon the Corporation's approach to the protection of the City's listed buildings which is in accordance with Government guidance and the complimentary policies of our Unitary Development Plan," the spokesperson says.
English Heritage has also been seduced, this time by Foster's design. After the bombing it demanded that the exchange be restored and its surviving historic features put in storage. Unable to meet the restoration costs, the exchange was forced to sell the site. Michael Cunliffe, head of planning at Ashurst Morris Crisp, is advising Kvaerner. To his client's delight, English Heritage reversed its ruling on the restoration after Kvaerner proposed first a 1,000ft tower, then the more modest 600ft structure.
The decision leaves the Baltic Exchange with a major axe to grind as it could have profited from the building's redevelopment.
If Foster's design is realised, Thomas believes that it will set an important precedent. "When the next developer comes through my door armed with plans to replace a listed building with a brand new tower, I will tell him that with a famous architect and a major tenant on board, he will be able to pull the listed building down," she says.
Thomas and the Baltic Exchange are now waiting to see whether John Prescott, in his capacity as Secretary of State for the Environment, Transport and the Regions, calls in the application for a public inquiry.
"I hope that he will do so because of the precedent this sets, the implications for policy and the impact on a world heritage site," Thomas says.
But intervention could bring the Secretary of State into further conflict with London's Mayor. Stephen Ashworth, a planning partner at Denton Wilde Sapte, says: "Ken Livingstone is going to have considerable control over major developments in the capital."
Indeed, Westminster Council received a host of tall building proposals ahead of a deadline earlier this month in an effort to avoid getting caught up in an extra swathe of red tape. Applications for buildings 30 metres high or 20,000sq ft in letable space now have to be submitted to the Mayor's office.
Planning lawyers and their clients remain uncertain about the impact of an enterprise-friendly Labour government committed to social inclusion and sustainable development.
"The Secretary of State is more interested in design issues and quality than in the past and making sure town centres work properly. It is policy to make sure houses are incorporated into office schemes. Development is not just for people with big cheque books any longer. It's also about creating a sense of community," says Ashworth.
There certainly appears to be more political interference in the whole process, as developers learn the new lie of the land.
Prescott's most likely targets are applications which raise issues close to his heart: transport, town centres and retail and leisure policies
In theory, the system is plan-led, but as the erotic gherkin shows, the current climate is somewhat unpredictable. What is emerging is a clear North/South divide in the exercise of government planning policy.
"You can propose things in Tyneside which in Tunbridge Wells would make people role over and die laughing. On Tyneside, jobs matter. Tunbridge Wells is more like a residents' society," says Ashworth.
The case of the Newcastle Great Park scheme is proof of this but has still raised a few eyebrows among planning lawyers given its apparent conflict with the Government's new PPG3 on housing issued in March. PPG3 introduced a sequential approach requiring previously developed sites to be used before greenfield land. "Brownfield first, greenfield last," Prescott told Parliament.
Yet three months later he announced that he would not call in the controversial application for the 1,185 acre (480 hectare) Newcastle Great Park scheme, which will see 2,500 new homes and 2.5 million sq ft of office and industrial buildings built on greenfield land outside the city.
"By contrast we have seen comparatively small retail and leisure proposals in the South, including some located in town centres, being called in," says Berwin Leighton partner Tim Hellier.
Indeed, two competing leisure proposals in Camberley town went to public inquiry last year. And in April this year, property group Hammerson's plans to develop its north London shopping centre were rejected by Prescott after he called in the application in 1998.
But for Eversheds partner Rod Bull in Birmingham, Prescott's decision on the Newcastle Great Park scheme comes as less of a shock. His clients - Bryant Homes and Leech Homes - lodged the application last year after Prescott called in and rejected their first proposal for the site. Eversheds, working closely with Newcastle City Council and the developers, hammered out a ground-breaking legal agreement to change Prescott's mind - the new homes would be built in six phases which could be stopped by the local council if the number of homes developed on brownfield land in Newcastle in the same period was not twice as high.
No doubt similar settlements linking greenfield development with city centre regeneration will now appear elsewhere. "We've had numerous enquiries from developers and local authorities about the document's contents," says Bull. "We've almost been a test bed for PPG3 policy. The Government was keen to have a large development on a greenfield site which it felt complied with PPG3."
To those who express surprise over the Secretary of State's latest decision, Bull stresses that the application had to be greatly modified before it won approval.
Furthermore, Prescott will maintain a close watch on the development. Rather than allowing the local planning authority to consider reserve matters such as housing design for the site, Prescott has taken the unusual step of requesting that such matters are referred to him.
"This procedure may become more common. It is an indication of the increased control over housing design which the Government wishes to exert," says Bull.
Hellier is also frustrated by the system's current unpredictability. After 14 years in planning, what concerns him most is the absence of transparency in the decision making process, which he believes the Newcastle Great Park scheme and the Camberley town examples reveal.
"The Secretary of State is entitled to balance conflicting factors and apply whatever weight he deems appropriate, provided he is not irrational. Decision making must not be arbitrary, but balanced, impartial, transparent and objective," he says.
"Inconsistencies and lack of transparency in the exercise of call-in powers do not generate confidence in the planning system."
What's more, the Government seems to be adding to the system's unpredictability by "moving the goal posts" of the planning process.
"Government ministers appear to be more ready to use ministerial statements to elucidate and arguably change policy. Interested parties have a legitimate expectation to be consulted on emerging policy but in some cases this simply is not happening," says Hellier.
He cites the recent example of a retail proposal in north London which, after being supported by the Planning Inspectorate (which rep-orted within one month of the public inquiry closing in December 1998), was refused by the Secretary of State 14 months later after retail policy had been "clarified". Long delays like this are another frustration for lawyers, developers and local authorities.
Navigating clients through this complex and evolving system requires constant education for planning lawyers. Given the lengthy nature of the planning process, they must also have an eye on future policy developments. "Those who react to what is in the headlines now are too late. They should have anticipated it," says Ashworth.
But for all their expertise and tactics, in the current climate some outcomes just cannot be predicted. The Newcastle Great Park scheme and Foster's erotic gherkin will certainly not be the last surprises the planning system comes up with.
"Planning is an area of law, but planning decisions by the Secretary of State are all about politics. The Newcastle Great Park has made me realise that more than anything else," says Bull.