Brexit: “planning” for the future
Although the uncertainty surrounding Brexit will continue to be felt across all segments of the UK economy (whether positively or negatively), the general outlook within the developer and housebuilding community is still, in the main, broadly positive.
Focusing less on the market and more on the legislative framework, what are the likely implications of Brexit?
When a developer puts in a planning application, rules and regulations spanning different disciplines scramble into motion. Suddenly, the developer has to contend with not just planning laws, but many environmental laws too (among others).
Although our planning laws won’t suffer any major overhauls as a direct result of Brexit, the entrenched relationship between UK and EU law regimes concerning environmental issues means that the environmental aspect of the planning system may change.
The importance of thinking ahead, therefore, and of futureproofing deals, cannot be overstated.
Many aspects of our economy have been profoundly affected by the ever-growing body of EU influenced environmental laws. In fact, the pressures exerted on the real estate industry to take more account of environmental considerations (mostly via the transposition of EU based policy into UK law) has had an overwhelming influence over urban development in the UK over the last few decades.
One quickly realises, therefore, that when it comes to the field of environmental law, political and legal instability over the medium and long term may end up having a profound effect on not only the environmental field itself, but on our planning system more generally.
A practical example: Environmental Impact Assessment (EIA)
The aim of EIA is to improve the quality of decision making, and to increase public participation in decisions to permit certain categories of development, the construction and use of which are likely to affect the environment to a significant degree. Effectively, an environmental statement should be produced for any project that’s likely to have a significant effect on the environment.
Whether an EIA will be required or not will depend on whether the Town and Country (Environmental Impact Assessment) Regulations require an EIA.
If the answer is yes, an EIA will be mandatory or, at the very least, a screening process will need to be carried out.
Though one can’t argue with the idea of safeguarding our natural environment, it would be true to say that EIA has been the cause of too many bureaucracy-related headaches for developers, especially over the last decade.
And the impact of ECJ decisions such as in R. v Bromley LBC, where the court decided that the Town and Country Planning (Assessment of Environmental Effects) Regulations 1988 failed to fully and properly implement the EIA Directive, haven’t helped matters either. In fact, the Bromley LBC case is still seen as of particular concern for speculative developments, where the exact details of the development might not be known at the outline planning stage.
So is there room, and scope, for improvement?
After a comprehensive review and consultation process conducted by the European Commission, Directive 2014/52/EU is set to extensively amend almost every Article of the pre-existing legislation, and to introduce important new additions, including (but not limited to):
- A substantially amended screening process;
- Enhanced explanations of screening decisions by the competent authorities;
- Clearer requirements for the assessment of the impact of development projects on areas such as biodiversity, climate change and landscape (among others);
- EIA reports (which will replace EIA statements);
- New monitoring obligations (though existing arrangements may be relied on); and
- A new minimum public consultation period of 30 days (to remove inconsistencies between Member States).
George Osborne recently highlighted his concerns that the EIA regime was too slow and bureaucratic. The changes that the 2014 Directive would impose would only have made the situation partially worse. It is likely that the Directive may not now be transposed into UK legislation and, indeed, the relaxation in UK requirements that George Osborne was seeking would be much easier to deliver under a post Brexit situation, whatever that is.
Any real change post Brexit?
Bearing in mind that the principal regulations concerning our planning and environmental systems were made under domestic legislation (albeit to satisfy EU requirements) it would be unrealistic to assume that EU legislation ceasing to apply to the UK will mean a bonfire of UK environmental legislation. Most of that UK legislation is seen as serving a worthwhile purpose. Arguably, the UK regulation goes further and is more restrictive than EU law requires anyway.
Although we can’t yet predict what the ultimate deal with Europe will look like, the appointment of Brexit spokeswoman, Andrea Leadsom, as the new Secretary of State for Environment, Food and Rural Affairs suggests we should, perhaps, expect a bigger overhaul of our environmental laws than previously anticipated.
However, it is early days still and any change is likely to be gradual.
Thinking and answering questions about the impact of Brexit does, inevitably, unravel even more questions.
While it is unlikely that our planning laws will change much as a direct result of Brexit, the environmental aspects of our planning system might, so thinking about these issues now allows us as practitioners to guide our clients through the challenges ahead and, wherever possible, future-proof their deals.