1034: New National Policy Statement for National Networks, NSIP reforms and community benefits for wind

Today’s entry looks at the updated National Networks NPS, further detail on NSIP reforms, and provides some musings on community benefits in the context of wind projects.

Boosting roads, rail and rail freight

The revised National Networks National Policy Statement has now been published by the government. We covered the main changes, most of which are fundamentally unchanged, in our previous blog post on the draft which was published for consultation, but there are a couple of further points to note. The key takeaway is that we have a refreshed policy boldly supporting new road, rail, and rail freight projects coming forward, and providing a refreshed policy basis for decisions.

On carbon, there is a useful confirmation that ‘the Secretary of State accepts that there are likely to be some residual emissions from the construction of national network infrastructure’ and that it is only ‘where the increase in carbon emissions resulting from the proposed scheme are so significant that it would have a material impact on the ability of government to achieve its statutory carbon budgets, the Secretary of State should refuse consent’. The reference to ‘regional’ carbon budgets has helpfully been removed – carbon is a global impact, people! There’s also a useful confirmation that carbon assessments should be ‘conducted according to the guidance, standards, and methodologies set out in Transport Analysis Guidance Unit A3.’

On operational emissions, government finally confirms what courts have now consistently said, namely that government ‘assesses whether the UK has sufficient policies and proposals overall to meet the UK carbon budgets, with a view to meeting the net zero target’ and that ‘It would not be feasible or sensible for such an assessment to be done at the time of taking individual development decisions.’ Amen, I’m sure that will put a stop to all the repeatedly failing carbon-related challenges.

There had been a suggestion in some corners that for all road and rail projects, the so-called wider network impacts of a specific project on the rest of the transport network should be mitigated as part of a DCO project. Much was made of the following paragraph of the revised NPS published for consultation in this context:

‘Where a development negatively impacts surrounding transport infrastructure, including connecting transport networks, the Secretary of State should ensure that the applicant has taken reasonable steps to mitigate these impacts. This could include the applicant increasing the project’s scope to avoid impacts on surrounding transport infrastructure and providing resilience to the wider network.’

The revised draft NPS, to be laid in Parliament before the designation fully kicks in, makes clear (unlike the draft for consultation) this paragraph is for ‘Strategic Rail Freight Interchange’ projects, and so the suggestion that road and rail projects should be subject to this requirement should now be dead in the water. This makes sense to me – for road and rail projects, there is a wider statutory framework for addressing national priorities for road and rail investments. That framework identifies specific interventions to address specific problems.

Indeed, such a conclusion is directly related to the fact that ‘The government’s wider policy is to bring forward improvements and enhancements to the existing SRN where necessary’ – ie, it is not for promoters, but for the government to determine what is necessary as part of the Road Investment Strategy and Integrated Rail Plans. The argument that a specific road or rail project should be on the hook for somehow circumventing the wider policies is also consistent with the point made – again in the context of SFRIs – that ‘government cannot guarantee in advance that funding will be available for any given uncommitted scheme at any specified time’ and that ‘Any decisions on co-funded transport infrastructure will need to be taken in the context of the government’s wider policy of transport improvements’.

The revised draft confirms the misplaced reliance on business cases is exactly that, misplaced: ‘the purpose of the business case is not to ascribe a monetary value to every factor in the planning balance.’ Interestingly, the government has re-inserted (from the extant NPS, but not in the draft NPS) the provision endorsing road user charging for estuarial crossings (see paragraph 4.79).

Reform, reform, reform

The government also published its response to the consultation on ‘Operational reforms to the Nationally Significant Infrastructure Projects consenting process’. Here are some highlights.

First, there is a confirmation that the fast track route will sit in the framework of the tiered-approach to pre-application advice, with the publication confirming that ‘enhanced pre-application service will be necessary to ensure that all potential participants in the DCO process can engage meaningfully and effectively to facilitate a shorter examination time for fast-track projects.’ The detail of the quality standards will be determinative of exactly how many promoters will see the 2 month reduction in the examination period as a worthwhile prize. Promoters are unlikely to be interested in merely swapping two months in examination for two months in pre-application.

Second, ‘new pre-application guidance will be published in April 2024, followed shortly after by a new pre-application prospectus, to provide greater clarity over expectations for all those involved in the pre-application process.’ Much of the success of this will depend on the detail: its clear that pre-application consultation is being utilised to delay projects, and consultations are becoming increasingly disproportionate to the scale of projects. There is a programme for updating all guidance across the board.

Third, there is a proposal to allow ExAs to request more detailed relevant representations, rather than receiving detailed information at the later written representations stage, to enable the Examining Authority to understand the key issues of the application and optimise preparation for the examination earlier on and thus create a robust examination timetable earlier in the process. That is to be supported, and many examinations are now delaying Written Questions later into the process to enable a more proportionate examination.

Fourth, the government ‘is removing the restriction on a person who has been involved in giving advice during pre-application (under s.51) from then being appointed as the single appointed person or to a Panel responsible for examining that application.’ I can see why this would be beneficial: inspectors with the background of a scheme will have a better idea of the project. On the other hand, you may sometimes want the baggage of the pre-application process to have fresh eyes. Nonetheless, the change allows for flexibility to address the most suitable route on a project-by-project basis.

There are also some bureaucratic – but welcome – changes to remove notice requirements (namely, the requirement for 21 days notice for hearings, as well as the requirement that notices be published in local newspapers where they are also published on the applicant’s website). The bodies that will be able to charge for DCO-related services as third parties has also been confirmed (The Environment Agency, Natural England, Natural Resources Wales, The Coal Authority, The Health and Safety Executive, National Highways, Marine Management Organisation and Historic England).

An Englishman, an Israeli and a Russian walk into a bar

What does the abolition of serfdom in Tsarist Russia, an ingenious Israeli planning policy, and English planning policy for wind infrastructure have in common? Perhaps quite a lot, as it turns out. This is related to major infrastructure, stay with me!

Serfdom in 19^th century Russia held back development, in short, because collective ownership gave rise to entirely the wrong incentives. Regular re-divisions and repartitions of communal land meant that individual farmers were not keen to make capital investments in the land, and increasingly small sub-divisions given to each serf meant that the land itself was not adequately large enough to split in a way that incentivised using new technologies or creating above-sustenance levels of grain. Following the abolition of serfdom, there was an ability to obtain property rights in your own land. The fundamental problem was that abolition created an incentive for non-productive members of the same commune to resist attempts by productive landowners to separate their holdings out.

Enter Pyotr Stolypin (let’s call him Pete) – he re-hauled the system so that when a commune was presented with a request to separate a landholding (usually by a productive landholding), it could also agree to separation on the condition that they controlled the consolidation process by having everyone else opt in. As Sam Watling notes, Pete’s reforms meant ‘this would mean that the negotiations between commune members and separating peasants would switch from an adversarial fight over land to one in which the best possible deal for both sides was negotiated’ (less ‘community benefits’ and more ‘communal’ benefits, eh?).

Meanwhile, some 200 years later, in Israel, an interesting planning policy is the ‘TAMA 38’ regime in Israel. In effect, residents of an existing housing block can collectively opt in to demolish and rebuild (a bigger, better) housing block. This short-cut to the planning regime can only be utilised where two-thirds of the block’s residents approve. The benefit of these schemes is shared across the block (with all existing landowners getting the windfall of a more valuable asset), rather than just an individual flat or housing owner who unilaterally decides to apply for their own individual planning permission, potentially leading to adjoining objectors objecting. The scheme has been a huge success: TAMA38 and similar schemes are responsible for 37% of Israel’s new homes.

The planning system in England is seen by many as adversarial: where an individual or an organisation makes a planning application, there is a risk that because there are insufficient ‘win-win’ or ‘community benefits’, that development will be resisted (even where the benefits very clearly and significantly outweigh the adverse impacts). It is trite law that you cannot buy a planning permission (as His Lordship Lord Hodge held in Tesco Stores Ltd v Secretary of State for the Environment, ‘it is a fundamental principle that planning permission cannot be bought or sold’) so you can’t simply pay off your opposition, but the law has been extrapolated in some contexts to energy projects, particularly wind.

In 2019, the Supreme Court considered precisely this issue in R (Wright) v Resilient Energy Severndale Ltd. and Forest of Dean Council. In that case, the promoter committed to make an annual payment of 4% of the income generated by the turbine to a local community fund and sought to secure that benefit by the imposition of a condition attached to the permission. Was this a permissible ‘material consideration’ weighing in favour of the grant of planning permission? How dare you, their Lordships held. The Supreme Court found the proposed community benefit payments did not pursue ‘any proper planning purpose’, but were made ‘for the ulterior purpose of providing general benefits to the community.. they were proffered as a general inducement to the Council to grant planning permission and constituted a method of seeking to buy the permission sought’.

‘Community benefits’ (eg, a contribution of utility bills for locals) were mentioned in the Skidmore Net Zero Review as being necessary for the development of electricity infrastructure. Is it actually possible to do this under our current planning rules? Section 106 agreements might seem an obvious mechanism for dispersing benefits more widely, but there are restrictions in place which would generally prevent direct payments. The PPG itself provides that ‘No payment of money or other consideration can be positively required when granting planning permission’ which seems a fairly stark hurdle for pecuniary community benefits.

Aligning incentives is critically important if you did want to implement an effective community benefits regime. Which is what makes the Government’s ‘Developing Local Partnerships for Onshore Wind in England‘ somewhat disappointing. Whilst extolling the virtues of community benefits, the document goes on to state that ‘proposals on community benefits will remain separate to the planning process, will not be a material consideration in planning decisions, and not secured through those decisions.’ It’s clear nobody should want to induce bribery, but what I think the reforms in Russia and Israel tells us is that one of the ways of dealing with objections is to provide win-win solutions. The purpose of planning is not just to regulate development, but to enable and encourage it (including by seeking to assuage objections which may arise).

I’m left slightly despondent at discussions around reform because they focus on seeking to introduce overly idealistic proposals by fiat, without trying to come up with win-win solutions, aligning incentives and effectively changing the rules of the game so that objectors have a less adversarial (and more negotiable) way to address their interests. There is a time and place for top-down edicts (perhaps after a Government has just won an election, or perhaps in specific areas which are electorally lost in any event) – but in the absence of a clear mandate (and coalitions of MPs on the same ideological page), proposing reforms which wind people up is likely to lead to failure as those with vested interests don’t have any avenue to negotiate their objection away. Politicians are less likely to progress such electorally costly measures too (see Jenrick’s failed planning reform).

If we really care about encouraging development, want to implement community benefits as a useful mechanism, I think we in the planning sphere need to think harder for Pete’s sake. We need practical and win-win responses, which is why coalition building may be the solution to vetocracy. Or maybe I’m just tying a few disparate policies together for the purposes of a blog, you decide.