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26/07/2021

Vulnerability, risk and value: How town centre permitted development rights will put councils to the test

Words: James Singer

The decision to allow conversion of commercial units to homes may affect the vitality of England’s high streets. Councils can use article 4 directions to limit development, but these will have to meet strict tests, says James Singer

6 minute read

One of the most impactful planning reforms of the last year has been the consolidation of a number of separate Use Classes under a single ‘Commercial, Business and Service’ Class E. This update to the Town and Country Planning (Use Classes) Order 1987 (the ‘UCO’) in July 2020 came into effect in September 2020 and combined shops, restaurants, offices, gyms and nurseries (amongst others) that no longer require planning permission to switch uses.

Then, in March 2021, an update was made to the General Permitted Development) (England) Order 2015 (the ‘GPDO’) to allow for the change of use of these Class E properties to residential from August 2021 (extending a right that had previously been restricted to office uses). 

This permitted development right is subject to maximum size requirements, the property having been in use as Class E for two years and vacant for three months, as well as an application to the council for ‘prior approval’ for limited consideration of impacts related to transport, contamination, flood risk, noise, the provision of natural light and the potential effect of providing residential accommodation within an industrial area. Further limitations apply in conservation areas and for nurseries, as well as in areas covered by article 4 directions where the rights do not apply. 

“This is the government’s first acknowledgement of the potential for the permitted development rights to undermine the health of centres in the NPPF”

Article 4 directions are issued under article 4 of the GPDO and allow for councils to withdraw permitted development rights from defined areas. However, after notifying the secretary of state of their intention to make an article 4 direction, the minister can intervene and modify or cancel an article 4 if they do not feel it is justified – as they have done on a few notable occasions in the past. They can be immediate (taking effect within a year of being issued, but liable for compensation to landowners) or non-immediate (taking effect at least a year after issue, but not liable for compensation).

This takes us to 20th July 2021, where the latest update to the National Planning Policy Framework (‘NPPF’) introduced new limitations on the use of article 4 directions (paragraph 53). The limitations are replicated below, but serve to significantly narrow the areas in which it is justified to introduce article 4 directions, limiting councils’ abilities to control development within their boundaries. 

These updates to paragraph 53 were first put forward in the January 2021 consultation for draft revisions to the NPPF; however the final updates differ from the initial consultation in a couple of key areas. The text now recognises that the loss of the “essential core of a primary shopping area” could result in wholly unacceptable adverse impacts on an area’s vitality and viability. This is the government’s first acknowledgement of the potential for the permitted development rights to undermine the health of centres in the NPPF. The updated text also introduces a requirement for “robust evidence”. 

On the one hand, this can be seen as good news for councils looking to protect vulnerable centres. Protection of the vitality and viability of a high street or town centre against the adverse impacts of change of use is now listed as justification for issuing an article 4 direction.


Extract of the updated Paragraph 53

53. The use of Article 4 directions to remove national permitted development rights should:

  • where they relate to change from non-residential use to residential use, be limited to situations where an Article 4 direction is necessary to avoid wholly unacceptable adverse impacts (this could include the loss of the essential core of a primary shopping area which would seriously undermine its vitality and viability, but would be very unlikely to extend to the whole of a town centre)
  • in other cases, be limited to situations where an Article 4 direction is necessary to protect local amenity or the well-being of the area (this could include the use of Article 4 directions to require planning permission for the demolition of local facilities) in all cases, be based on robust evidence, and apply to the smallest geographical area possible.

However, the updated text introduces two key questions: 

  • How can a council define an essential core?
  • What constitutes “robust evidence”?

This limitation that article 4 directions should “apply to the smallest geographical area possible” presents a challenge for councils, as essential cores of primary shopping areas become difficult to define when class E allows for shops to switch to offices, gym, and so on, at will, which can result in a somewhat fluid “essential core” of a primary shopping area. 

This sets a risk that the essential core may have already changed from retail and leisure uses to a gym, nursery or office by the time an article 4 direction takes effect, providing a very different contribution to the centre and local community than when it was initially defined. As such, councils should look to undertake this process as early as possible.

Three tests for article 4 directions

Robust evidence for adopting article 4 directions would need to meet three key tests, demonstrating the vulnerability of the core, the risks to the core, and the value of the core.

1. The vulnerability of a core can be identified through mapping the distribution of town centre uses spatially and over time, highlighting trends in vacancy rates and the overall provision of commercial, business and service uses. Demonstrating a history of changes away from main town centre uses, alongside a lack of supply and falling demand will underscore the vulnerability of a core, particularly when accompanied by data on the difference in values between residential accommodation and commercial, business and service uses.

“The essential core may have already changed from retail and leisure uses to a gym, nursery or office by the time an article 4 direction takes effect”

2. Once it has been demonstrated that a core is vulnerable to the impacts of permitted development rights under class MA, evidence would be required to evaluate the risk that the impacts could be significant enough to seriously undermine its vitality and viability. Whilst this can be demonstrated directly through the loss of turnover, jobs and attraction of uses within the core, it is important to remember the wider contribution that high streets and town centres make to local communities. Local residents depend on access to shops, services, and medical facilities, and consideration should be given to the impacts of having to travel further to access these crucial services. Use class E was introduced to provide flexibility and reduce risk for town centre occupiers, which will be even more important as town centres emerge from lockdown restrictions. While the permitted development right will add additional risks for commercial, business and service occupiers, it may also be relevant to assess how the loss of such uses could stifle recovery from the impacts of the pandemic.

3. Finally, any evidence would need to demonstrate the value the core area provides to a centre. This could be through turnover modelling, footfall counts and on-street visitor surveys, as well as an analysis of the wider importance of the core as social infrastructure, providing key services and employment opportunities. Equally, as recently suggested by ministers, this could include future value where there are plans for the comprehensive mixed-use development of an area that could be prejudiced by the unplanned introduction of new housing. Councils will need to demonstrate that an area has functioned as an essential core of town centre uses, contributing to the overall vitality and viability of centre for an extended period of time, in order to suitably demonstrate the value that an area provides and justify protection. 

The revised policy on issuing article 4 directions is another in a series of incremental updates to the planning system over the past year. Whilst wholesale planning reform through a new Planning Bill continues to dominate headlines, a new approach to planning with less intervention and oversight is being rolled out in town centres across the country and it will be fascinating to see how they respond.

James Singer is a High Streets Task Force expert and associate director at Nexus Planning

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