Phasing is one of the key factors to consider and get right in planning for large scale, strategic development.
A well-phased scheme divides the site into distinct parcels of land allowing reserved matters to be submitted and conditions discharged in relation to each parcel, individually, as it comes to be developed.
It also allows planning obligations in section 106 Agreements to be apportioned between parcels and (in some cases) to be attached and limited to particular parcels.
In addition, where Community Infrastructure Levy (CIL) is relevant, each phase is treated as a separate “chargeable development” meaning that the CIL attributable to each phase is calculated separately on approval of reserved matters and falls due only on commencement of development of the phase.
In this way, phasing can be used to not only reduce the burden and cost of what needs to be done before development can start, it can aid cash flow throughout the development and allow for particular costs to be apportioned and administrative tasks to be neatly transferred to third parties on a sale of part.
So far so good. However, there are a surprising number of common pitfalls that can trip-up an otherwise well-planned scheme. Examples include:
- Not amending the standard condition to allow for reserved matters to be submitted on a phased basis. The condition should require reserved matters to be submitted and approved for each phase prior to commencement of development of each phase
- Not providing enough time for reserved matters to be approved for each phase in succession. Ideally, the standard time limit of 3 years should apply only to the first phase of the development with a longer period (perhaps 10 years) for the submission of reserved matters on all subsequent phases
- Allowing for reserved matters to be submitted on a phased basis, but not making the same provision in other pre-commencement or pre-occupation conditions. Some conditions may not be appropriate for phasing, but most should be capable of being discharged on a phase by phase basis. Ensure that all such conditions are consistent and clear to avoid ambiguity
- Inconsistency between the planning permission and the S106 agreement. This can easily occur where a phasing plan is appended to the section 106 agreement which is either not the same as one referred to in the planning permission or which is subsequently replaced or revised under either the agreement or the planning permission but not both. This can result in obligations overlapping phases or applying to the wrong phase in a manner that was never intended. Planning obligations, like planning conditions, must also be worded clearly and consistently throughout the S106 agreement.
The Community Infrastructure Levy can be a difficult beast to manage at the best of times. The rules for calculating the chargeable amount are highly technical and the procedures are rigid and unsympathetic to error. Therefore, it is all the more important, where CIL is relevant, that any planning permission allowing for phased development is clear and consistent.
This was highlighted in the case of R (on the application of Oval Estates (St Peters) Ltd) v Bath and North East Somerset Council  EWHC 456 (Admin), which considered the question of what constitutes a “phased planning permission” for the purposes of CIL.
In the CIL regulations, phased planning permission is defined simply as “a planning permission which expressly provides for development to be carried out in phases”. However, no formula is prescribed for how the provision for carrying out the development in phases should be expressed on the face of the decision notice.
In Oval Estates, outline planning permission was granted in 2016. The development was required by condition to be carried out in accordance with a specified list of approved plans, but none of the plans indicated that the development would be carried out in phases. There was a section 106 Agreement that used the term “phase” to mean “a phase in the construction of the Development as submitted and agreed by the Council as part of the Affordable Housing Scheme”, but the Agreement did not itself set out or define the phases of the development.
Reserved matters were subsequently approved (in April 2017) with a phasing plan indicating that the development would be carried out in three phases and, in 2018, a non-material amendment was made to the outline planning permission to add the phasing plan to the list of approved drawings. The Developer sought to rely on the approved phasing plan as evidence that the planning permission was a phased planning permission and that the CIL liability should be calculated and paid accordingly. The local authority disagreed and sought to recover the full liability for CIL on commencement of development.
The Court found in favour of the local authority. Importantly, it was determined that the outline planning permission did not expressly provide for development to be carried out in phases and that neither the section 106 agreement nor the reserved matters approval nor even the minor non-material amendment altered that fact.
This case serves as a reminder of how unforgiving the CIL Regulations can be, but also more generally of the need to ensure that planning permission for phased development is clear and unambiguous on its face and to avoid the many pitfalls that can arise.