Following the enactment of provisions in the Neighbourhood Planning Act 2017 which look to protect pubs, Planning and Licensing law specialist, Jamie Childs, looks at the latest changes in the planning laws relating to the development and change of use of pubs.
Permitted development rights
What has changed?
The Neighbourhood Planning Act 2017 was given Royal Assent on 27 April 2017 and, amongst other things, legislated for changes to permitted development rights (“PDR”) for pubs.
The relevant provisions of the Neighbourhood Planning Act 2017 led to the amendment of PDR as follows:
- Removing the right to demolish buildings in use (or last used) for a purpose within Class A4 (drinking establishments) including drinking establishments with expanded food provision (see further below).
- Removing drinking establishments from PDR under Schedule 2 Part 3 Class A of the Order which previously allowed the change of use of drinking establishments to Class A1 (shops) or Class A2 (financial and professional services) subject to certain limitations, conditions and restrictions.
- Establishing a new PDR under Schedule 2 Part 3 Class AA for the change of use of a building and land within its curtilage as follows:
- From Class A4 (drinking establishments) to a use as a drinking establishment with expanded food provision (within use Class A4 and Class A3 (restaurants and cafes); and
- From a use as a drinking establishment with expanded food provision back to a use solely under Class A4.
- Removing drinking establishments from PDR under Schedule 2 Part 3 Class B which previously allowed the change of use of drinking establishments to a use under Class A3 (restaurants and cafes).
- Amending the PDR for a change of use to a state-funded school for 2 academic years within Schedule 2 Part 4 Class C of the Order so that this no longer applies to buildings within Class A4 (drinking establishments) or drinking establishments with expanded food provision.
- Revising the PDR for a change of use to a temporary flexible use within Classes A1, A3 and B1 under Schedule 2 Part 4 Class D of the Order so that this no longer applies to buildings within Class A4 (drinking establishments) or drinking establishments with expanded food provision.
What do these changes mean in practice?
The Neighbourhood Planning Act 2017 was the subject of a great deal of debate prior to receiving Royal Assent which was also just before Parliament was dissolved on 3 May 2017. Frankly, it does not appear that the finer details and implications of the amendments set out above were thoroughly considered and any person considering a change of use or works to a pub, whether a landlord, publican, property investor or developer should carefully consider the effect of these changes and whether they really have the desired effect of protecting pubs at all. In summary, the PDR are much more limited and planning permission is likely to be required more frequently when changing the use or redeveloping pubs, so clear advice must always be sought.
In respect of the new rights allowing expanded food provisions, careful attention should also be given to whether a particular pub actually does come within Class A4 (drinking establishments) and what a “change of use” to a “drinking establishment with expanded food provision” within both Class A4 and Class A3 (restaurants and cafes) actually means given that Class A3 (since April 2005) covers “Use for the sale of food and drink for consumption on the premises”.
For instance, if it may be argued that a particular pub falls within Class A3 rather than Class A4 then the Order shall still allow (subject to limitations, conditions and restrictions) the change of use of such premises to Class A1 or Class A2 use. This is only one example of potential circumstances where these so called pub protection measures shall offer no such protection.
There are also detailed transitional provisions for those who have already begun the notification and prior approval procedures (as appropriate) applicable to those PDR which have been removed before 23 May 2017 and for those areas subject to an Article 4 direction, which has the effect of removing PDRs.
Assuming one has concluded that a pub in question does fall within Class A4 (including drinking establishments with expanded food provision), then the effect of the removal of the demolition PDR is clear cut. Planning permission shall be needed for demolition of such a pub and developers and owners of pubs should bear this in mind when proposing to re-develop a pub, particularly given the potential on-going liability for business rates whilst the pub in question remains in existence.
Pub owners and developers seeking to rely on PDR will also need to ensure that their Local Planning Authority (“LPA”) has not limited the application of such rights for the particular building or the area through an “Article 4” Direction, or there is an express planning consent that may restrict the proposed use.
Assets of community value (ACV)
What are ACVs and what does ACV status mean?
During the debate leading to the PDR changes discussed above it was stated in Parliament that there are thousands of pubs listed as assets of community value. ACVs are not a new concept, having been around since 2012. However, recently we have seen a significant increase in nominations to list land or buildings as an ACV, particularly given the Campaign for Real Ale’s drive to achieve the listing of 3,000 pubs as ACVs.
The ACV regime does not just affect pubs but can also lead to the listing of community centres, gyms, areas of open (and potentially developable) land and any other land or buildings meeting the relevant legal tests.
In summary, the ACV regime allows certain bodies (parish councils, community organisations etc.) to nominate land or buildings to be registered by a local authority as an ACV. If the local authority concerned decides to add the asset to their register of ACVs it shall remain on its list for five years (unless sold). If an ACV is put up for sale there is then a six week moratorium period where a community group may express an interest in bidding for the asset. If an interest is expressed a six month moratorium period shall then begin from when the asset is put up for sale to allow a community group to compile a bid.
It should be made clear that this does not mean a community group has a “right” to buy the ACV during the six month moratorium period but that it has the opportunity to bid, with no obligation on the vendor of the ACV to accept such a bid. However, this does mean that no sale to a bidder who is not a community group may be concluded during the six month period, although negotiations may be progressed.
Under the ACV regime an owner of an ACV may claim compensation from the local authority for losses and expenses which would not have been incurred if the premises had not been listed.
Listing of a pub used to have implications for the use of PDR but this has now been negated by the PDR changes discussed above.
However, the ACV regime remains a real thorn in the side of owners of ACVs seeking to dispose of them and developers looking to purchase land or buildings registered as an ACV as a result of the six month moratorium period delaying sales and affecting funding. In addition, in certain circumstances it shall be appropriate to treat an ACV listing as a material consideration in the determination of a planning application which could affect development proposals.
What can be done to avoid ACV status?
Following a nomination of land or buildings as an ACV the local authority has eight weeks to decide whether to nominate an asset if they consider it meets the definition set out in section 88 of the Localism Act 2011.
If the owners of the land or building in question wish to object to a listing of their asset as an ACV it is critical that they submit robust representations during this eight week period.
Whilst there are mechanisms for the owner to call for an internal review of a local authority’s decision to list an asset as an ACV after the listing decision and also to appeal to a Tribunal from this review, these routes are time consuming and costly, although necessary in certain circumstances.
Howes Percival’s Planning Team have an excellent record of successfully objecting to nominations for ACVs on behalf of landowners and developers so do not hesitate to contact us for assistance should you receive notification that your land or building has been nominated as an ACV.