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I. Background and objective of this report本报告的背景和目的
本报告旨在从规划的角度为无损检测控股公司建立住宅开发部门的计划提供咨询。无损检测控股公司意识到该国住房短缺，希望认真考虑这一扩张和发展的机会。在现有资源的基础上，考虑了参与住宅开发领域的可行性，讨论了三项相关政策对本次住宅开发方案的影响。
This report aims to provide consultancy to NDT Holdings on its plan to establish a residential development arm from a planning perspective. NDT Holdings is aware of the housing shortage in this country and would like to carefully consider this opportunity for expansion and development. With its resources at hand, it considers whether it’s feasible to participate into the residential development field.The implications of three relevant policies on this residential development proposal are discussed.
第二节讨论了《2016年住房和规划法》中引入的原则许可（PIP），包括对PIP的简要介绍、PIP的优势和关注点以及对无损检测控股发展计划的影响。第三节讨论了《2011年地方主义法》下规划过程中公众参与的增加，包括公众参与的背景和措施，以及对无损检测发展建议的影响。第四节讨论了社区基础设施的影响，其中包括CIL的产生和假设的含义。最后一部分给出了结论，并提出了进一步研究的建议。研究结果主要是通过文献回顾的政策和学术论文。
The Permission in Principle (PiP) introduced in the Housing and Planning Act 2016is discussed in Section II, including a brief introduction of PiP, the advantages and concerns of PiP, and the implications on NDT Holdings development plan. Theincreased public participation in the planning process under the Localism Act 2011 is discussed in Section III, covering the background and measures of increasing public participation and the implications on NDT’s development proposal.And the implications of the Community Infrastructure Levyare discussed in Section IV, which contains the introduction of CIL and the implications assumed. The conclusions are presented in the last section with suggestions for further research. The findings are researched mainly through literature review of the policies and academic papers.
II. Implications of Permission in Principle (PiP) 原则上许可的含义（PIP）
Introduction to Permission in Principle (PiP) 原则许可介绍（PIP）
The current planning application is time consuming and costly for developers before they can get any certainty of development in principle. This is because developers have to prepare substantial amounts of materials in the very early stage. The PiPintroduced in Housing and Planning Act 2016 established a new route to gain planning permission. It aims to separate the decision making processes on “in principle” issues from technical matters in housing-led developments (DCLG, 2017). The “in principle” issues are (i) location with a red line plan; (ii) the use of the land, which must be residential; and (iii) the amount of residential development detailing the minimum and maximum number of units or equivalent factors (Pinsent Masons, 2016). The “in principle” issues need to be granted once and cannot be re-opened. The government aims to promote efficiency through this mechanism that developers can get up-front certainty before investing time and cost substantively into technical matters (HM Government, 2017).
Followed by PiP, the technical details of the development should be submitted by the applicants to get the final permission to develop the residential site. The legislations on this matter will be further detailed to provide more guidance. There are two types of PiP that could be granted, which are (i) designated by local forums such as neighborhood communities or planning authorities that can last for five years; and (ii) applied by developers that can last for three years (Shaw, 2006).
Advantages and Concerns of PiP
The PiP policy has certain advantages for the government, the local authorities and communities and potential developers, which can be generally summarized as below:
• To satisfy Government’s requirements, the PiP mechanism can speed up the planning processes by providing up-front certainties, thus promote efficiency and finally enable to supply more residential development projects to address the housing crisis. On the other hand, the up-front certainties and efficiencies PiP created would also benefit the developers by saving their time and cost compared to the outline planning mechanism.
• PiP allows local authorities and neighborhood communities to make decisions on the allocation of sites for residential development, thus strengthening their roles. The local communities are the most familiar with local conditions and their needs and requirements must be considered when developing new residential projects. On the other hand, they can provide valuable insight on which sites are suitable to develop.
• Among the two ways of granting PiP, the applicants can directly apply to the local authorities for the permission to development, which could not be achieved through existing laws and regulations (DCLG, 2017).
To summarize, PiP promotes certainty and efficiency for both the government and the potential developers. It helps to save time and money for applicants and it enables the applicants to directly apply to local authorities. It also promotes local authorities and neighborhood communities to be more committed and contribute their valuable opinions. According to Pinsent Manson’s report (2016) and the Policy Fact Sheet issued by Department for Commhnities& Local Government (DCLG) (2017), different stakeholders, including public planning sector, local government, developers, communities and other groups comment positively onPiP.
Even with these advantages, there are uncertainties and concerns regarding PiP, which are presented as below:
• There are concerns about how PiPis to be interacted with environmental impact assessments (EIA). EIA is excluded from the “in principle” elements. How it works requires clarification.
• To make PiP work well, a pre-condition is the local authority and neighborhood communities are proactive, equipped with resources and well-developed (Shaw 2016). Thus, one of the concerns is what if they are not. In addition, the requirement of local authorities and neighborhood communities’ decision making raises the concern of increased administrative burden on them.
• Regarding the potential developers, to provide technical details entirely after PiP may impose larger workload compared to outline permission. In addition, the limitation of 10 homes on application will dissuade developers with more ambitious plans.
Implicationsof PiPon NDT’s development
Some of the advantages and concerns of PiP are shared by NDT’s residential development plan.
On the one hand, NDT will enjoy the up-front certainty by PiP without the fear of principle issues being revisited. This will save time and money for NDT at the beginning stage. NDT can also apply directly to the local authorities for the development, which enables direct communications, feedbacks and mutual understanding between these two parties.
On the other hand, although PiP is filled with good intent, there are uncertainties and risks to be considered. Firstly, how the mechanism proceeds when entering the stage of technical details submission and the following procedures are to be addressed in further legislation. How PiP is interacted with EIA is unknown. A progressive planning or an unwilling public sector will cause the same problems to developers of current policies (Shaw 2016). The cost of preparing the entire technical details after PiP is also to be taken into account.
The recommendation is to adopt a conservative strategy. The risks can only be accurately measured upon further legislations and clarifications being issued.
III. Implications of the increased public participation of Localism Act 2011
Background and measures to increase public participation
The benefits and merits of public participation in decision making have been discussed extensively for thirty years (Twitchen& Adams 2011).It is widely recognized that local communities’ involvement will greatly contribute to the well-being of the development of the particular area. Yet legislations and mechanisms are needed to let people voice out their ideas. The Localism Act 2011 granted rights directly to communities and people to shape the place they live.
The Localism Act 2011 granted several ways to increase the participation of voluntary and community groups. The rights granted by this Act are summarized by the Department for Communities and Local Government(2011). Firstly, these groups can express their interests by taking over the role to run local authority services. This is achieved through a procurement and bidding exercise, thus enabling local groups to improve local public services (DCLG, 2011). Secondly, they can maintain a list of valuable public assets and are granted time to prepare the bid and raise money. Thirdly, believing that council tax should be supported by local people, the Act granted local voters the right to approve or veto the rise of council tax under certain circumstances. Fourthly, more transparency is required to disclose senior council member’s income to make the tax payers aware of how their tax is spent. Lastly, the fines imposed on rubbish collection are cancelled. Instead, other measures are proposed to raise people’s awareness of rubbish recycle. #p#分页标题#e#
Implications on NDT’s development
In general, increased public participation introduced in the Localism Act 2011 will bring lots of benefits to local communities and the whole society in respect of housing development. It enables local social enterprises, community organizations and local people to make decisions on their own behalf of what housing development should be made and in what places. This empowerment ensures that local communities’ needs are met and their voices and brilliant ideas are heard and applied in real life development.
For developers, this policy also changes their strategies and procedures. Instead of following procedures of central and local government previously, when NDT Holdings proposes to develop new housing development, it must consult the local communities and groups for their opinions. NDT has to hear feedbacks and comments from local communities before submitting their development plans. Local communities are complex groups that are made up of different people with different needs and interests. Therefore, NDT has to make comprehensive research on different local people’s needs and to develop a plan that can satisfy as many people’s needs’ as possible. This new requirement will certainly impose more time and cost on NDT.
Although with the good intention, local communities’ participation in decision making will make the decision making process more complex and time consuming, because different ideas must be heard and discussed to reach an agreement. Therefore, the decision making process will also likely to take longer time. And this has a negative impact on NDT.
The implications of increased public participation are generally beneficial to the society and long term development of housing development. However, to NDT, this policy will make the preparation of development plan more time consuming and costly. The entire decision making process will also be longer.
IV. Implications of the Community Infrastructure Levy (CIL)
Introductions of CIL in the Planning Act 2008
The CIL is a new charge introduced in the Planning Act 2008.This new charge will be imposed on new developments. The amount of the charge depends on the scale, location and usage of the development and applies to per square meter. The purpose of CIL is to let this payment contributed by developers to help improve and develop local facilities (DBC 2015). The levy is payable when the gross internal area of the new development is larger than 100 square meters (DCLG 2014). There are some exceptions for which CIL can be exempted.
To investigate the implications of CIL on DNT holdings development plan, it is important to make sure who is liable for this new charge and who can be exempted from this charge. According to DCLG (2014), the landowners are the ones who are liable. However, the developers involved in the development may have to pay. The liability is assumed when development commences. The exceptions are (i) the development is less than 100 square meters; (ii) the development is built by self-builders; (iii) the development is categorized as social housing or charitable; (iv) the development arebuildings people do not normally go or only go intermittently; and (v) other exceptions specified in the regulations (DCLG 2014). The definitions of the terms used above should also be consulted in the regulations.
The rate of CIL is set as per square meter. The charging authorities have the authority to set the rate. The principle is the rate can’t threaten the economic viability of the development.At the same time, it should help provide funding for local development. This means a balance of attracting developers to invest for development and collecting fee to fund local infrastructure and facilities must be achieved (DCLG 2014). The charging authorities prepare charging schedules to set the rate of CIL. The following factors are considered when setting the charging schedule: (i) the total cost of the planned infrastructure development; (ii) local developers and relevant parties should be consulted; (iii) the evidence base of the levy should be prepared; (iv) due process should be followed to consult and test the rate. The rate can be set flexibly to adjust to different situations, such as different rates for different scale and types of development. VAT is not required for CIL (DBC 2015).
Implications on DNT’s development
To evaluate the implications of CIL on DNT Holdings, the following questions must be answered,
• Is DNT Holdings liable for CIL?
• If liable, how much is the charge?
• How this charge influence the total development cost? How substantial is this influence?
Firstly, DNT Holdings is liable for CIL if it establishes a residential development arm and develops new housing projects. The new development must exceed 100 square meters because it is developed for commercial sale and consists of a number of units. It does not satisfy any exceptions of CIL. So DNT Holdings proposed new development will be liable for CIL.
Secondly, according to the Dacorum Borough Council (2015), the rates of CIL for residential development are (i) 250 pounds for Zone 1 – Berkhansted and surrounding; (ii) 150 pounds for Zone 2 – elsewhere; (iii) 100 pounds for Zone 3 – Hemel Hempstead and Markyate; (iv) 0 pound for Zone 4 – identified sites. Retirement housing and convenience based supermarkets, superstores and retail warehousing are set at a different rate, which will not be taken into account here. NDT Holdings development area is not specified. Let’s assume using the 150 pounds rate for evaluation. The target market of NDT is high-quality and small-size. The average size of each unit is assumed at 80 square meters. Then each unit will be charged of 12,000 pounds of CIL. The target sales prices of each unit are between 400,000 pounds and 750,000 pounds, with the average price as 575,000 pounds. We also assume the profit rate of the development is 10% and the cost of each unit would be around 520,000 pounds. Then the percentage of CIL is calculated as 12,000/520,000=2.3%.
What should be noted is that several assumptions are made and the exact percentage of CIL can vary. But a general idea can be obtained from this calculation. Although the calculated CIL is not an amount that is big enough to substantively increase the development cost, it is an amount that can’t be neglected. Residential development requires intensive financial input, a 2%-5% increase is a large amount that a developer will take into account. When developing residential development, variations can’t beavoided. Developers usually consider variations within 5% acceptable. This indicates that 5% is the upper limit of increase in cost some developers could bear. So the introduction of CIL imposes financial burdens on developers that can’t be neglected. The exact amount of CIL and the percentage it takes on the total cost can only be calculated with more detailed information being provided.What can be sure is the implications of CIL are negative.
V. Conclusion
In this report, the implications of three policies on NDT Holdings development plan are researched and discussed. The first policy is PiP and the conclusion of its implications on NDT is uncertain. With all the uncertainties and potential risks, we suggest NDT to adopt a conservative approach regarding this policy. The second policy is increased public participation in decision making of local development. The conclusion is this policy change affects NDT in negative ways, because it will increase the cost and time NDT will take to develop new projects. The third policy is CIL. The implications of CIL are also negative. Although the exact amount of CIL is unknown, a rough range is calculated based on a few reasonable assumptions. The CIL is an amount that can’t be neglected and must be considered carefully.
In summary, since two of three policies have negative impacts on NDT and the other policy’s implications are uncertain with potential risks, we suggest NDT being careful about establishing the residential development arm. In future research, we suggest NDT to investigate into the uncertainties of PiP to determine whether potential risks will have negative impacts on its development plan. We also suggest NDT to evaluate the increased time and cost of consulting the local communities and groups to determine whether the time and the cost is substantial or neglectable. In addition, we suggest NDT to calculate the exact amount of CIL according to its development plan and targeted profit rate and compare it to its own budget to determine whether this cost will have an impact on their decision of new development. At this stage, as the report suggests, the three policies in general have negative impacts on NDT’s residential development plan.
References
Dacorum Borough Council (DBC) (2015) Frequently Asked Questions – Community Infrastructure Levy.
Department for Communities and Local Government(DCLG) (2011) A plain English guide to the Localism .
Department for Communities and Local Government(DCLG) (2014) Guidance Community Infrastructure Levy.
Department for Communities & Local Government (DCLG) (2017)Policy Fact Sheet: Permission in Principle.
HM Government (2017) Explanatory Memorandum to The Housing and Planning Act 2016 (Permission in Principle etc) (Miscellaneous Amendments) (England) Regulations 2017.#p#分页标题#e#
Pinsent Masons (2016)Housing and Planning Act 2016.
Shaw, J. (2016) Permission in Principle – a mild salve for an acute housing shortage.
Twitchen, C. &Adams, D. (2011)Increasing levels of public participation in planning using web 2.0 technology.Published by Birmingham City University.
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